US-China warpaths converge on tech


14 Aug 2020 - Christopher Granville

It is no accident that the escalation has concentrated on tech, while financial sector measures have remained relatively restrained for now. All the various strands and sources of US reactions to the rise of China now converge on the tech sector. This venn diagram attempts a schematic summary of this important reality. The common denominator is the unacceptability of China opening out a lead in at least one (5G) and perhaps more (potentially) core new general purpose technologies for the global economy. By contrast, China has yet to pose a perceived threat to the hegemony of the dollar in global trade and (especially) finance.

In line with their particular sensibilities and priorities, US politicians have different ways of rationalizing the policy of contesting, preventing, reversing and generally neutralizing any Chinese technological leadership. The key point here has less to do with the substance of the arguments than their variety. While our diagram is ‘mapped’ to the Trump administration, this very variety of tech war imperatives virtually guarantees that a successor Biden-Harris administration would, allowing for nuances of political taste and style, find ample grounds for continuing with this policy – if not intensifying it. A key question from now on therefore will be how China responds to this strategic tech war challenge. The contours of that response are already becoming clear enough to justify closer analysis.

TS Lombard chart Christopher Granville US China tech

 


#China #Technology #US Economy

 

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