National Economic Power Industry Series

How China’s systematic campaign to dominate strategically important industries threatens America’s technological leadership, economic strength, and national security—and what U.S. policymakers should do about it.

The most important techno-economic policy issue America faces is how its economic system should operate and be governed. The answer is neither market capitalism nor societal capitalism nor socialism. Only national economic power capitalism can provide the framework necessary to avoid losing the techno-economic war to China.

The U.S. government lacks adequate capabilities to conduct the kind of techno-economic industrial analysis that is necessary to avoid losing to China, nor is it organized to formulate and manage industrial and competitiveness strategies, policies, and programs in an enterprise-wide way. Policymakers must address these gaps to mobilize America’s economic power industries.

The U.S. regulatory state has become a major headwind for national economic power industries competing against China, and incremental reforms will not be enough for America to avoid techno-economic defeat. U.S. policymakers need to adopt a national developmentalist model.

Heavy dependence on Chinese APIs creates risks to the drug supply and national security. To reduce dependence, U.S. policy should support domestic and allied production through the advanced manufacturing innovation, tax incentives, import limits, regulatory reforms, improved analysis, and targeted procurement, including strategic stockpiling.

The era of free trade globalization is over. To replace it, the United States should lead a new class of binding deals with allies, with a dual objective of strengthening allied national economic power industries and weakening China’s.

Manufacturing start-ups, particularly in critical national economic power industries, are essential to the nation’s economic and security strength. Yet, U.S. manufacturing start-ups have declined over the last three decades.

Increased federal funding for STEM research is necessary but not sufficient for America to avoid losing to China. It’s also time for a new model for federal research funding that focuses on the technology needs of national power industries and directly benefits firms in the United States.

Chinese industrial policy is reshaping global manufacturing and impacting every U.S. state. The result is growing risk to American industry, jobs, and national security.

The U.S. education and workforce development system is ill-suited to winning the economic power industry war with China. It’s time for systemic reforms to produce students and workers with skills and capabilities that national power industries need.