House conservatives prepare fight against bipartisan China bill, as Senate marches toward passage

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EXCLUSIVE: As the Senate appears set to move forward with a bipartisan bill aimed at funding U.S. semiconductor chip manufacturing and competition with China, House conservatives argue the bill may actually "help China." 

The Republican Study Committee, led by Rep. Jim Banks, R-Ind., is releasing a memo Monday calling the legislation "the latest iteration of Schumer’s fake so-called ‘China’ bill," in reference to Senate Majority Leader Chuck Schumer, D-N.Y. The memo lays out what it says are "troubling provisions," including "over $250 billion in inflationary spending."

"[I]nstead of or securing our own intellectual property or doubling down on the free enterprise system which has made the United States one of the most innovative countries in the world, the bill seeks to copy China’s failed model of centralized government spending," the RSC memo says.

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It's unlikely the RSC will be able to stop the legislation from passing. It got 16 Senate Republican votes on an initial procedural vote last week, and it's expected there will be a similar number on another procedural vote at 5:30 p.m. ET Monday. 

Further, Democrats in control of the House are unlikely to need much, if any, Republican help to pass the legislation, and there are outside Republicans, like Texas Gov. Greg Abbott, who support it. 

"Congress has an opportunity to unlock even greater economic potential for Texas and the United States by passing the CHIPS Act of 2022," Abbott said last week. "This legislation will assist cementing a secure semiconductor supply chain, which is vital to our nation's economy and national security."

Rep. Jim Banks is leading opposition to the bipartisan CHIPS bill among House Republicans, but it appears likely the bill will pass after 16 Senate Republicans voted to advance it last week. (Saul Loeb/AFP via Getty Images)

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But the RSC memo points to several issues in the bill it says will defeat the legislation's purpose, and likely foreshadows an effort by House conservatives to limit GOP yeas on the bill in that chamber. 

One issue the memo cites is allegedly weak protections for intellectual property. It notes that the most recent version of the bill no longer includes a provision to give "the State Department new grounds to deny visas to those who previously worked or cooperated with organizations or entities affiliated with adversarial nations."

"It also removes provisions in the Senate-passed USICA… which would have imposed sanctions on entities in China for theft of U.S. intellectual property and cyber-attacks on American companies," the memo adds. 

The RSC document also rails against environmental investments and "Woke Diversity Priorities" in the bill it says have nothing to do with fighting China. One of those is a "chief diversity officer at the National Science Foundation."

The memo further highlights that the bill's ban on U.S. funding to universities that harbor Chinese Communist Party-associated Confucius Institutes includes a waiver provision. And it raises concerns that the bill ditched legislation related to Taiwan and sanctions for the Uyghur genocide.

This comes after some Republicans, including Banks, attacked the bill's keystone semiconductor funding as amounting to corporate welfare last week.

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Nevertheless, supporters of the bill say the moment of U.S. strategic competition with China is too big to let the perfect be the enemy of the good. 

 "We’re looking to strengthen the bill so that it will help us win the race against China and in turn reinforce our national and economic security in a time when America needs to reassert itself on the world stage," a GOP aide whose senator voted to advance the package last week told Fox News Digital.

"This is bringing back production to America," Rep. Ro Khanna, D-Calif., one of the bill's biggest boosters, also told Fox News Digital. "The ‘make America great’ folks should be all for this. I mean, do we want to make these semiconductor chips in America, or do we want China to lead?"

Fox News' Chad Pergram contributed to this report.