China will likely be the biggest business disruptor of the 2020s because of its unique position as the world’s largest market for many products, the leading supplier of many more, the toughest competitor, and the West’s chief geopolitical rival. Indeed, China has already exceeded the economic impact of earlier rivals the West has faced, and going forward it will be much more difficult to counter.
The study finds that for technologies that China has identified as strategic, a patent application’s risk of rejection rises from 16.6 to 25.6 percent if it is foreign, an increase of 54 percent.
“The cloud market is growing quickly in China in part because individual and business broadband adoption is still growing at a robust pace,” said Rob Atkinson, president of the Information Technology and Innovation Foundation, a Washington-based think tank for technology policy. The group’s board includes officials from Amazon. com Inc., Microsoft Corp. and other U.S. cloud providers.
China is striving to become the global leader in biopharmaceuticals, but many of its policy steps are “innovation mercantilist” in nature. This not only is expected to threaten U.S. leadership, but also slow global life sciences innovation, with negative consequences for cures and treatments.
In a response for the European Commission’s public consultation on its “white paper on levelling the playing field as regards foreign subsidies,” ITIF agreed there is a need for new legal instruments to address distortions of the internal market arising from subsidies granted by non-EU authorities.
China will likely be the biggest business disruptor of the 2020s, but the discussion about how to respond has yet to take shape. A strategic framework should rebalance the global supply chains, bolster competitiveness, adjust to China’s market size, and solidify the West’s appeal.
What happened? How did America go from the world’s leader to not even an also-ran in the span of just two decades? Equally troubling, why did no one sound the alarm bell when there was still time for action?
The possible prohibition on U.S. companies selling to Tencent, owner of WeChat, or using its services to sell their own products in China does nothing to protect the security or privacy of Americans. It only harms U.S. companies and jobs.
A major study from 2016 that found that Chinese imports increased European patent growth up to 30 percent between 1996-2005 had major coding flaws. The correct data show negative & insignificant changes due to Chinese competition.
The Unites States needs to develop a better response to counter China’s use of censorship as a non-tariff barrier to trade, and to deter other countries that may seek to replicate the practice.
There is a vibrant debate underway in Washington about how to respond to China, particularly its “innovation mercantilist” policies. Most ideological camps favor tougher action than the U.S. government has taken in the past, but there is little consensus on what that action should look like.
China’s state-backing of Huawei and ZTE allowed these companies to seize global market share from more innovative international competitors, reducing their growth in sales and investments in R&D. This, in turn, hurt global innovation in the industry.
COVID-19 has prompted calls for reshoring of medical goods, including strict “Buy American” prescriptions. While reshoring is important, “Buy American” fails to recognize the value of the global supply chain and avoids addressing the real problem, China.
Rob Atkinson and Clyde Prestowitz explain in the Washington Post why it is important for America and its allies to consider such measure as Beijing is trying to intimidate foreign governments.
The trade ban limits the ability of U.S. companies to effectively participate in standards setting organizations whenever Huawei is present. This constraint only hurts U.S. competitiveness with no clear benefit and should have been addressed by the Department of Commerce long ago.
The COVID crisis has exposed new vulnerabilities in U.S. supply chains, as well generated even more distrust of the Chinese government. At the same time, China is doubling down its “Made in China, 2025” ambitions to be the global technology leader. How will these developments affect U.S. technology competitiveness? What should the next administration do vis-à-vis U.S.-China trade relations?
Rob and Jackie discuss these issues with James McGregor, Chairman of APCO Worldwide’s greater China region and a leading expert on China and Chinese economic policy.
Further stimulus in response to the COVID-19 crisis should focus not just on short-term recovery, but also the long-term competitiveness of key technologically sophisticated, traded-sector industries. Now is the time to recognize America needs a robust industrial strategy.
The United States needs to continue working, ideally in partnership with allies, to roll back the most egregious features of Chinese innovation mercantilism; it needs to encourage some transfer of U.S. production away from China to other nations; and it should develop and implement a robust domestic industrial strategy.
Economic espionage represents a significant threat to the technological advantage of innovative companies, especially in high-tech sectors, where trade secrets are often worth billions of dollars. According to the Justice Department, China is by far the largest source of economic espionage, much of which is government-backed.
It makes little sense for the administration to say the phase one deal is going to increase U.S. exports of high-tech goods while simultaneously erecting new barriers to those very same sales.
Over the past year, key U.S. allies South Korea and Japan have been embroiled in a political and trade dispute which has many antecedents in the past, but which has been exacerbated by more recent developments. While certainly concerning, the trade dispute in some ways has presented an opportunity for the United States to assert renewed diplomatic engagement in the region.
A careful review of the scholarly literature and industry cases suggests that the effect of Chinese economic growth and trade expansion, fueled by a corrosive set of “innovation mercantilist” policies and practices has been negative for innovation in most developed nations, including North America, Europe and Japan.
The United States, the EU, and Japan must band together in stronger trilateral partnership to pressure China into rolling back the mercantilist trade practices it uses to grow advanced, innovation-driven industries.
An examination of the scholarly literature shows that China’s mercantilist-powered economic rise and trade expansion have slowed the progress of innovation in the global economy—particularly in North America and Europe.
As the Trump administration implements the Foreign Investment Risk Review Modernization Act, the most important thing it should consider is that the Committee on Foreign Investment in the United States (CFIUS) should treat Chinese acquisitions of U.S. companies fundamentally different than acquisitions from our allies.