Confronting Chinese Innovation Mercantilism

America’s trade relationship with China has entered into a perilous stage in the last five years. With China’s shift to an “indigenous innovation” strategy based on forced IP transfer, standards manipulation, discriminatory regulatory and tax policies, and favoritism towards state owned enterprises, China is unabashedly seeking to favor Chinese-owned firms in order to dominate practically all sectors, especially the higher value-added, innovation-based sectors. Yet, the Washington consensus response can be summed up in one word: patience.

In an upcoming report, “Enough is Enough: Confronting Chinese Innovation Mercantilism,” ITIF’s Rob Atkinson documents this phenomenon and warns of the dangers facing the United States and the global economic system if China continues down this path. Atkinson draws on his experience co-chairing an informal White House-initiated U.S.-China innovation experts group and uses compelling data to make the case for awakening Washington from its complacency.

“Enough is Enough,” transcends the free-trade versus protectionist dichotomy and critiques both those who would curtail our trade with China and those who would continue to ignore Chinese mercantilism under the belief that it can never be successful. Instead, the report argues for a new approach to get tough on Chinese innovation mercantilism and to support the expansion of rules-based trade.