Theft as Trade Policy
The most important dimension of U.S.–China relations is technology, which is vital to economic, military, and even ideological competition.
In the economic competition, the main American challenge is not, as is sometimes implied, inadequate innovation. The U.S. is the world’s wealthiest country by tens of trillions of dollars. The number of U.S. patents granted to Americans set a record in 2019 and nearly matched it in 2020. That more than tripled the number of patent granted to second-place Japanese filers in our market.
The main challenge is not even Chinese innovation. Beijing’s preference for large firms and state funding at the expense of genuine competition ensures it will struggle in key areas, from aircraft development to shale. The main challenge is China’s acquisition of intellectual property (IP) and use of regulatory and financial subsidies to develop products from that IP to drive the U.S. out of global markets.
It is critical that U.S. companies and individuals be aware of the large-scale human rights abuses perpetrated by the PRC government in Xinjiang. Businesses should evaluate their exposure to the risks that result from partnering with, investing in, and otherwise providing support to companies that operate in or are linked to Xinjiang.
G7 adopted the U.S.-led proposal BuildBackBetter World as an alternative to China’s Belt and Road Initiative. But can it compete with China’s investment? KeithKrach was the under secretary of state responsible for economic diplomacy during the #Trump administration. The Blue Dot network his team drafted was adopted by the Biden Administration and is now the Build Back Better World initiative. This Silicon Valley veteran has a good track record of defeating China’s economic aggression, particularly Huawei’s ambition to take over the global 5G communications.