The Trade War China Intends to Win

The Trade War China Intends to Win, by Gordon Chang.

Americans like to say that “no nation ever wins a trade war,” but that’s not what the Chinese think. There are winners in trade wars, which is why China has been waging one for two generations.

Beijing, in its quest to strengthen its state-led system, has engaged in predatory tactics for four decades, since the beginning of the “reform era” in December 1978. Beijing’s attack on the American economy over this period has been methodical and insidious, especially in recent years under rulers Hu Jintao and Xi Jinping.

Hu’s era, the decade-long period beginning in 2002, saw first a drift and then a pronounced trend towards more statist policies, especially his “indigenous innovation product accreditation” rules, part of a national strategy to force foreign companies to surrender technology. …

Of greatest concern is Beijing’s use of stratagems to take, by one means or another, intellectual property. The other concern is China’s development of its own technology by coercive tactics, like the enforcement of national policies that violate Beijing’s trade obligations. …

And there is outright theft. Today, as detailed in the 2017 update to the report of the Commission on the Theft of American Intellectual Property, America each year loses an amount in excess of $225 billion — and perhaps as much as $600 billion — “in counterfeit goods, pirated software, and theft of trade secrets.” This does not include all losses due to the infringement of patents.

Much, if not most, of the theft is thought to be perpetrated by Chinese parties or by others on Beijing’s behalf. …

That criminal conduct is an existential threat to the American economy, which is heavily innovation-based: if the United States cannot commercialize its innovation, it does not have much of a future.

hat-tip Stephen Neil