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Opinion | With China in its sights, US techno-nationalism will only burn brighter
- Despite concerns by US tech companies, Washington is prioritising China containment over its reputation as a defender of the free market system
- Given the techno-nationalism has endured into a second administration, curbs on China will only grow whoever enters the White House next year
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America’s latest curbs on US hi-tech investments in Chinese companies, in the name of national security, are really a part of a continuing techno-nationalist strategy to contain and halt China’s rapid rise to the upper echelons of technologically advanced nations.
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On August 9, US President Joe Biden signed an executive order banning new US investment in Chinese companies in the key areas of advanced semiconductor chips, quantum computing and artificial intelligence (AI), which could potentially be used to enhance China’s military capabilities. This restricts US-based venture capital and private equity firms from investing in Chinese corporations operating in these sectors.
The irony is apparent: the United States is often characterised as a defender of the free market, an integral part of the Western liberal order. Yet the new executive order, along with similar policies like the Chips and Science Act, chip export controls and ban on electronic equipment from Huawei Technologies Co and ZTE Corp, reek of protectionism.
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It’s important to note that China remains by far the world’s largest importer of chips. Therefore, restricting US investments in China’s technological industry will significantly reduce the competitiveness of US tech companies.
On the other hand, China’s rapid rise in technological leadership is the result of decades of effort by the Communist Party. A grand example is the Made in China 2025 industrial policy, which aims to reduce China’s dependency on foreign technology imports while enhancing the capacity of domestic companies.
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