China's rise as tech powerhouse shouldn't surprise anyone. The Chinese Communist Party actively encourages technology transfers between foreign companies and their Chinese partners. Most foreign companies operating in China must form a joint venture with a Chinese company. This forced transfer of intellectual property underpinned China's rise as a technology and manufacturing powerhouse. Now, China plans to unleash its national champions onto the global marketplace. The real questions is, how can American and foreign companies compete?
Several things facilitated China's rapid development. First, China encouraged foreign companies to manufacture in the country. These foreign companies brought money, capital, and knowledge. Second, China's large population and cheap labor made it attractive to the foreign companies. Finally, Chinese employees and joint ventures acquired knowledge and skills from their foreign employers and foreign partners. Many of these former employees and current/former partners built competing companies. Effectively, foreign companies often indirectly created their future Chinese competitors.
Today, foreign companies face an unfavorable regulatory environment in China and increased competition from Chinese companies in foreign markets. In many industries, foreign companies cannot hope to remain competitive in the Chinese market for very much longer. The CCP continues to squeeze foreign companies operating in China with a lethal combination of regulations and nationalism. General Secretary Xi routine calls on his countrymen to close the technology gap between China and the Untied States and lessen China's dependence on foreign technology. Simultaneously, he pushes for collaboration between China's technology companies and the Chinese military.
It's pathetic it took the United States this long to wake up. The trade war has thrown China off balance, but the United States shouldn't hesitate to go for the jugular. Paying a few extra cents for the stuff you buy at Walmart is a small price to pay for securing America's technological and strategic advantages.
Several things facilitated China's rapid development. First, China encouraged foreign companies to manufacture in the country. These foreign companies brought money, capital, and knowledge. Second, China's large population and cheap labor made it attractive to the foreign companies. Finally, Chinese employees and joint ventures acquired knowledge and skills from their foreign employers and foreign partners. Many of these former employees and current/former partners built competing companies. Effectively, foreign companies often indirectly created their future Chinese competitors.
Today, foreign companies face an unfavorable regulatory environment in China and increased competition from Chinese companies in foreign markets. In many industries, foreign companies cannot hope to remain competitive in the Chinese market for very much longer. The CCP continues to squeeze foreign companies operating in China with a lethal combination of regulations and nationalism. General Secretary Xi routine calls on his countrymen to close the technology gap between China and the Untied States and lessen China's dependence on foreign technology. Simultaneously, he pushes for collaboration between China's technology companies and the Chinese military.
It's pathetic it took the United States this long to wake up. The trade war has thrown China off balance, but the United States shouldn't hesitate to go for the jugular. Paying a few extra cents for the stuff you buy at Walmart is a small price to pay for securing America's technological and strategic advantages.
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