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.
Since 2011, the U.S. government has spent over $400 million to provide broadband Internet access to 1.6 million people. A recent study investigated the impact that policies like these can have by examining the construction of broadband infrastructure across China, finding that every 10 percent increase in a region’s infrastructure increased firms’ productivity by 1.1 percent and workers’ wages by 4.2 percent.
As ITIF President Rob Atkinson and Jonathan Ward, founder of Atlas Organization, write in an op-ed for Fox Business, focusing on domestic productivity and preserving the U.S. edge in advanced and emerging technologies will help America win the economic and technological contest against China, as well as turn the tide in the U.S.-China competition for global power.
Nearly 25 percent of all R&D expenditures in China come in the form of government subsidies to firms. It would be ideal if China dramatically reduced these innovation subsidies so American workers in innovation industries would face a level playing field, but the chances of that happening are slim to none. It is time for the federal government to step up its game and provide significantly more support for industrial R&D.
In essay for a compilation published by the Center for Strategic & International Studies, Nigel Cory explained that the United States and China have fundamentally different approaches to governance of the digital economy.
In an article for Daily Caller's American Renewal, conservatives should embrace an industrial strategy to deliver economic security, national security, and freedom.
The United States leads the race for global advantage in artificial intelligence, at least for the time being, with China coming in second and the EU lagging behind. But China is poised to challenge U.S. dominance in coming years as it undertakes bold AI initiatives.
As Rob Atkinson writes for National Interest, the Trump administration should work toward market-based decoupling that effectively loosens China’s grip on global production.
The United States is continuing to drift in the wrong direction when it comes to federal funding for research and development (R&D). We parsed the numbers last year in a blog post that showed a five-decade-long slide had been accelerating since 2009. Now we have another year’s worth of data, and the picture is getting worse. At this pace, ITIF estimates the United States will fall behind China in R&D investment by 2021.
China is challenging the United States for market share and jobs in one of the highest value-added, most innovation-intensive industries—and the risks extend not just to the U.S. economy, but to global biopharma innovation.