By David Shepardson

WASHINGTON, (Reuters) – U.S. Commerce Secretary Gina Raimondo stated Wednesday that the Chinese government opposed a bill in Congress that would increase U.S. semiconductor production because it would give the United States a stronger competitive advantage.

U.S. lawmakers are expected to open negotiations this Thursday over a compromise bill that would provide $52 billion for subsidies in the semiconductor industry and improve U.S. technology competitiveness. A final agreement could take several months.

At a Senate Appropriations hearing, Republican Senator Shelley Moore Capito questioned Raimondo about a Reuters report and other reports that China was pushing U.S. business executives and companies to oppose China-related legislation in Congress.

It doesn’t surprise my at all. China is against this bill. They are aware that we will be able to compete with them,” Raimondo explained, adding that China had already invested $160 billion into domestic semiconductor production. “The last thing that they want is us to invest $52billion.”

Raimondo stated that she heard reports suggesting China was lobbying U.S. companies, and said they were “deeply worrying… It is important for them to know that China opposes it.

China Embassy has not yet commented.

Reuters reports that in November, the Chinese embassy in Washington sent letters to executives urging them to ask Congressmen to change or withdraw specific bills designed to increase U.S. competition. The sources as well as the text of a letter from the embassy’s economic and business office were seen by Reuters.

According to the content of the letter, Chinese officials advised companies that they could lose market share and revenue in China if legislation is passed.

China said that it opposed such legislation. It argued it incites anti-China sentiment, and is based on Cold War-era thinking.

The electronics and automotive industries have been disrupted by a persistent shortage of chips, leading some firms to reduce their production. Raimondo has called for a boost in chips production as a national security concern.