As Trump’s tariffs push back on China’s ambitions to dominate high-tech sectors, U.S. strategy may temporarily claim success but, in the long run, the U.S. needs more technology development of its own to stay ahead.
China has its sights set on dominating high-tech industries by 2025. The ambitious Made in China 2025 campaign, announced in 2015, aims to make China a superpower in 10 developing tech industries such as robotics and bio-pharmaceuticals. While these industries are currently dominated by other countries, Beijing seems intent not just on competing with Germany, South Korea, Japan, and, of course, the U.S., but on outpacing them them as well.
Trump has pushed back on China’s plans with billions of dollars in tariffs, but tariffs alone will not give the United States a led in technology development over China. Indeed, all the tariffs seem to have accomplished is to persuade Beijing to cut back on its use of the phrase “Made in China 2025.”
Of course, a key component of China’s ambitions is the acquiring U.S. technology for itself – often through technology transfer agreements allowing for foreign companies to gain access to valuable Chinese markets. Trump has also pushed back on this and the administration is reportedly currently considering preventing companies with at least 25 percent Chinese ownership from gaining access to U.S. tech by purchasing U.S. firms with “industrially significant technology.”
Yet tariffs and efforts to prevent China from gaining U.S. technology will not dampen Beijing’s broad plans to dominate high-tech industries. China continues to invest in science and technology education and development and offers broad, although sometimes misguided, support for startups. Already, China leads the world in mobile payment platforms and is rapidly developing in new spaces such as facial recognition technology and consumer drones.
These are not one-off developments, but part of a larger strategy. Indeed, earlier this year the National Science Board released a statement that projected that China would soon pass the U.S. in research and development funding.
The U.S. needs a plan and investment of its own to ensure that the future of telecommunications, pharmaceuticals, artificial intelligence and other technologies are not lost in a one-sided development race to be won by China. These technologies that might just be a cool new gadget today, will likely play a key role in determining the balance of global power in the future.
