Advertisement
Opinion | The US is waging war on Chinese hi-tech, but it can’t thwart Beijing’s ambitions on its own
- Joergen Oerstroem Moeller says the global rules-based trading system is under threat as Washington seeks to conscript other countries to its economic war on Chinese technology
Reading Time:3 minutes
Why you can trust SCMP
The United States is shifting the battleground for global power from money, finance and trade to technology. This approach poses serious risks for global trade and investment.
Advertisement
It involves three steps. First, China is seeking to skip the initial and often risky development phase of new technology, where failures are common and costly. Instead, Beijing has demanded technology transfers as a condition for foreign investment. If foreign companies do not comply, a number of obstacles complicate investment, even making it near impossible.
The US and other Western countries have previously acquiesced to this demand, if for no other reason than because it was seen as mutually beneficial. But with the ongoing trade war, the US has changed tack, now seeing China’s approach as a determined attempt to get technology on the cheap, expropriating what American research institutes and companies have paid for.
The second step is to scrutinise Chinese investments in US hi-tech companies. There is a good deal of apprehension that many investment targets have been chosen not for business motives, but to acquire hi-tech that can then be dispersed to Chinese companies, and to state-owned enterprises under the full control of China’s Communist Party.
Despite anecdotal evidence, not many US companies have been bought for this reason and, in the case of hi-tech companies, it is an open question whether they were in possession of the newest technology. The fear, however, of a foreign country such as China buying hard-won and expensive technological knowledge is widespread.
Advertisement
Advertisement