China

Based on key indicators of innovation and advanced-industry performance, China has surpassed the United States in total innovation output and is getting close on a proportional basis. To regain its leadership, the United States must respond more strategically and forcefully.

China’s aspiration to become the new global hegemon calls into question the “Washington Consensus” that free markets and unfettered globalization maximize U.S. and global welfare. But for true believers, that is unacceptable. So, the idea China is a threat must be destroyed intellectually.

ITIF’s Rob Atkinson appears on the podcast What China Wants by Sam Olsen to talk through the realities of British Prime Minister Rishi Sunak’s proposal to create a “NATO for Tech” to counter Chinese influence.

The first step is calling the economic war with China what it is. Then Washington needs to commit to preventing Beijing from achieving global leadership in most advanced industries—and ensuring a significantly greater rate of Chinese economic dependence on the United States (and close allies) than vice versa.

China ranked 11th overall in the World Intellectual Property Organization’s 2022 Global Innovation Index, up 23 spots from ten years ago.

China did not cause income inequality. And it is only partially responsible for low productivity and wage growth. But if it had lived up to its WTO obligations, the world’s faith in globalization would have suffered much less than it has.

A recent report by Japan’s National Institute of Standards and Technology found that China accounted for 4,744 of the approximately 17,440 scientific research papers that made up the top 1 percent in terms of citations. This accounted for 27.2 percent of that group.

U.S. policymakers must insist that China comply with its WTO commitments in cultural and entertainment industries and, more broadly, adopt an approach that Chinese enterprises are permitted no more access to U.S. cultural and entertainment markets than U.S. companies receive in China.

While China surged ahead in 1995 in terms of advanced industry production, the current odds are stacked in India’s favour. If correct actions are taken, we can easily surpass China.

The fall in the value-added of foreign inputs as a share of China’s gross exports reflects an increased reliance on domestic production of intermediate goods and services and a shift toward production for domestic consumption.