Author: Marianne Schneider-Petsinger, Jue Wang, Yu Jie and James Crabtree
Affiliation: Asia-Pacific Programme; the US and the Americas Programme
Date/Place: November, 2019, U.K.
Type of Literature: Report
Number of Pages: 44
Keywords: Trade, Technology, Espionage, Investment, Economy
Brief:
Washington and Beijing trade battle has intensified over the course of 2018. The Made in China 2025 policy, which was released in 2015, is now posing a major threat to the US high-tech sector. Alongside high technological prowess, governments have been trying to restrict technological integration based on their national interests. While in 2018 the US had approximately 48 per cent of the global trade deficit, the Trump administration discounted two important factors. First, the US had a $40 billion surplus in its service sector with China in 2018. Second, the overall global trade imbalance is primarily due to the result of macroeconomic forces, not trade policy. Washington criticized China on multiple issues including currency manipulation, supplying cheap steel and aluminum to the global market, and technology transfer to China from US based hi-tech companies. Thus, Trump has called on US multinational corporations such as Ford and Apple to withdraw their investments from China. Moreover, the U.S. administration is calling for restricting the use of China’s 5G network equipment, citing espionage concerns. The author’s main argument on Sino-US trade war was built on China’s defense. The report discusses in detail the complex interdependence between China and the U.S., with which the loss of one would ultimately result. in the loss of the other.
By: Maryam Khan, CIGA Research Associate