One Hand Tied Behind Our Backs: Why America Must Do Much More to Curb China’s Dangerous Innovation Mercantilism

Ahead of Chinese President Xi Jinping’s visit to the United States later this month, please join ITIF on September 17 for an expert panel discussion exploring the ramifications of China’s economic and trade strategies and delving into potential remedies and responses.

Despite commitments China made when it joined the World Trade Organization in 2001 to embrace key tenets of rules-governed, market-based trade, it remains wedded to an aggressive innovation mercantilism that seeks advantage for its domestic technology companies at the expense of foreign competitors. Across a wide range of advanced technology industries, from information technology to biotechnology, China has embarked on a systematic plan to replace American companies with Chinese equivalents, using a range of techniques including forced technology transfer or joint venturing as a condition of market access, cybertheft of foreign intellectual property, abuse of anti-monopoly and competition laws, and outright subsidies to state-owned or directed enterprises. For example, China’s “National Guidelines for Development and Promotion of the Integrated Circuit Industry” unabashedly call for a closed-loop semiconductor ecosystem that would reduce Chinese imports of U.S. semiconductors by half in 10 years and eliminate them entirely within 20.

Put simply, Chinese economic policy increasingly fundamentally rejects the WTO principle of comparative advantage, instead seeking absolute advantage and, ultimately, dominance across a range of advanced technology industries. The administration has expressed concerns to China through diplomatic engagement, yet China has continued on its mercantilist path. For the sustained viability of America’s advanced technology sectors, it’s critical that U.S. policymakers now take a stronger stand against anti-competitive policies that disrupt the global marketplace for innovative industries.

The event is free, open to the public, and complies with ethics rules. A video recording will be available afterward. Follow @ITIFdc during the event, and join the conversation using #ChinaTrade.

More panelists to be announced.