TL; DR here: The US and China once trusted each other in industrial and trade cooperation, despite ideological differences. But now, I think both sides will agree, that kind of trust doesn’t seem realistic anymore. These orders are intended to move industries that migrate from the United States back to the states. (You can Read more here about how the pandemic has highlighted this issue.)
Despite growing skepticism, these new policies follow the same playbook that China has used for decades: generous subsidies to the industry, government funding of academic institutions and barriers to entry for foreign competitors to protect domestic firms. And it just might work! After all, it was the Chinese government’s success in developing key technology areas in such a short time that the US took action in the first place.
Whether the government admits it or not, I think these moves to build up domestic industries are a form of protectionism. It reminds me of the term “economic nationalism,” coined by New Yorker writer E. Tammy Kim. used to describe how bipartisan candidates in the Ohio Senate race have promised to bring manufacturing jobs from China. I don’t think government intervention to help a domestic industry is in itself bad. But economic nationalism also comes with problems: unfair competition, corruption, xenophobia, turning away from trade allies, etc. Biden is sure to be challenged from both sides on these issues. this problem.
I find it ironic that after years of criticizing China’s approach to developing domestic technology industries, the US – under Trump and Biden – is also learning from China. But to be fair, the best way to create technological progress may lie between excessive government intervention and an unregulated free market. It will be interesting to see how the US handles that balance relative to its rival.
Any other thoughts on the Biden admin’s executive order on China? I would love to hear from you at zeyi@technologyreview.com.
Catching up with China
1. A car accident in Guizhou that killed 27 people is being transported to a covid quarantine facility. It has caused widespread outrage online about China’s ongoing zero-covid policy. (CNN)
2. Even though individual Chinese users have been blocked from Twitter, local governments are still paying for travel ads there — and they’ve become a fast-growing source of revenue for the platform this. (Reuters $)
3. Traditional store owners in Mexico are reselling the Shein clothes they bought online and making a fortune. (The rest of the world)
