The bill which must pass the House of Representatives before being signed into law is a rare point of agreement between Republicans and Democrats.
In a vote in the upper chamber of the US Congress, 68 of the 100-member Senate supported the measure with 32 against it. The Senate is evenly divided between Republicans and Democrats and experts say the vote shows how the two political parties are united on the need to counter Beijing’s economic and military ambitions.
Supporters noted that the package is one of the largest industrial bills in US history and the biggest investment in scientific research that the country has seen in decades.
“I believe that this legislation will enable the United States to out-innovate, out-produce, and out-compete the world in the industries of the future,” Senate majority leader and co-sponsor of the bill Chuck Schumer said on the Senate floor.
The bill authorizes roughly $250bn (£176bn) in funding for technology research, semiconductor development and manufacturing as well as subsidies for robot makers and chipmakers amid a shortage of computer chips worldwide.
The computer chip shortage has hit automobile production at a time of rebounding global demand.
The purchase of drones manufactured and sold by Chinese state enterprises would also be blocked under the legislation.
Chinese organizations engaged in US cyber-attacks or theft of US intellectual property from US firms would face sanctions too once the bill is passed.
The legislation was passed amid some signs of a thaw in relations between Beijing and Washington. In May, China and the US held virtual talks between trade negotiators in the first such meeting of the Biden presidency.
China’s Commerce Ministry in early June said China and the US had agreed to pragmatically solve bilateral issues and restart normal communications.
However, on Wednesday, Chinese foreign ministry spokesman Wang Wenbin suggested the bill could harm these efforts saying it was “full of Cold War and zero-sum thinking and runs counter to the public aspiration in both countries to strengthen exchanges and cooperation”.
“The China-related content of the bill passed by the US Senate distorts facts and slanders Chinas development path and its domestic and foreign policies,” he said. “It exaggerates the ‘China threat’, advocates traditional competition with China and seriously interferes with China’s internal affairs on Taiwan.”
A version of the legislation must still pass the US House of Representatives and then be reconciled with the Senate version before being signed by President Joe Biden to become law.
However, President Biden praised the bill’s passage saying “It is long past time that we invest in American workers and American innovation,” President Biden said in a statement.
“We are in a competition to win the 21st century, and the starting gun has gone off. As other countries continue to invest in their own research and development, we cannot risk falling behind.” President Biden said in a statement.