With the rise of China, the U.S. economic and technology environment has fundamentally and inexorably changed. America needs an advanced technology industrial policy to compete effectively—but that will require modernizing hidebound economic thinking that has long considered “industry policy” to be anathema.
There weren’t many Chinese tech companies that the Trump administration didn’t sanction or at least threaten. What did that achieve in the technological race with China? What was the impact on the American brand writ large? And what should the Biden administration do next?
Passing a time-limited tax incentive for firms that move Chinese production to U.S. Labor Department–designated “labor surplus areas” would weaken China’s economic and technological capabilities by reducing production there while strengthening U.S. capabilities by increasing domestic production, and it would help economically distressed and disadvantaged cities and counties across the nation.
China’s mercantilist strategy to grab market share in the global semiconductor industry is fueling the rise of inferior innovators at the expense of superior firms in the United States and other market-led economies. That siphons away resources that would otherwise be invested in the virtuous cycle of cutting-edge R&D that has driven semiconductor innovation for decades.
But these generous policies so far have not resulted in market dominance. To date, only 148 of COMAC’s planes are confirmed to have been purchased.
Understanding how Germany manipulated the global trading system to degrade its adversaries’ capabilities, entrap nations as reluctant allies, and build up its own industries for commercial and military advantage—just as China is doing—can shed light and point the way for solutions to the China challenge.
Fearmongers claim the 5G sky is falling: China is way ahead, and drastic measures are needed to catch up. But these claims are often based on poorly understood comparisons of 5G deployment. China’s 5G stats can paint a misleading picture if taken at face value.
Recent years have seen China increase its spending on basic and applied research, which is likely to drive its innovation going forward and could be a large factor behind an eventual Chinese leadership role in global innovation.
With protectionist policies shielding their rear flank domestically, China’s digital firms are out to capture global market share. Their strategy hinges on state-backed innovation mercantilism—and their success will come at the cost of U.S. jobs, exports, and economic growth.
A new study has found that firms with CEOs who turned 18 during the Cultural Revolution spend less on R&D, generate fewer patents, and receive fewer citations to these patents.
Rob Atkinson talked to Kula Partners principals Carman Pirie and Jeff W. White on their Kula Ring podcast about how U.S.-China relations are affecting manufacturers, particularly North American firms with supply chains in China.
ITIF hosted a discussion of these issues, including how U.S. businesses are likely to be affected and what the U.S. government should do in response. An expert panel will discuss a recent ITIF report arguing the United States and its allies should focus on rebalancing global supply chains, bolstering competitiveness, adjusting to China’s market size, and solidifying the West’s appeal.
WASHINGTON—Excessive subsidy-powered competition from China decimated solar photovoltaic manufacturing in the rest of the world in the 2010s, eliminating multiple innovative companies and altering the path of innovation, according to a new report released today by the Information Technology and Innovation Foundation (ITIF), the world’s top-ranked think
China’s subsidy-aided rise to dominance in PV manufacturing has driven prices way down, but at the cost of undermining promising alternative technological pathways. Policymakers should adopt measures to sustain greater diversity in PV and similar technologies.
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.