Last week, I wrote briefly about the easing of trade tensions between the U.S. and China. Most of us have no desire to see a full-blown trade war between the world's two largest economies, so a calmer approach seems better for all parties involved.
But the momentary reduction in tension won't resolve some of the most fundamental problems. A study highlighted in a recent edition of The Information raises serious questions about the extent of China's investments in emerging technologies.
What's even more alarming, however, is the lack of a coherent strategy here in the U.S. for dealing with China's ambitions for becoming a dominant force in the technology industry.
"The U.S. does not have a comprehensive policy or the tools to address this massive technology transfer to China," write the study authors, Michael Brown and Pavneet Singh. The Committee on Foreign Investment in the United States (CFIUS) "is one of the only tools in place today to govern foreign investments, but it was not designed to protect sensitive technologies and is only partially effective."
Moreover, write the authors, "the U.S. government does not have a holistic view of how fast this technology transfer is occurring, the level of Chinese investment in U.S. technology or what technologies we should be protecting."
In other words, we have an antiquated and inefficient system for monitoring foreign investments in sensitive technology. That is not good news for our industry. China is already working hard to dominate the market for rare minerals required for the batteries that power our smartphones and electric vehicles. Does it make sense to also sell them our most valuable intellectual property?
By 2030, China's economy will be 50 percent larger than the U.S. economy. That scale will create incredible leverage. And they are preparing for a future in which the U.S. is a subordinate player.
"China is investing in the critical future technologies that will be foundational for future innovations across technology both for commercial and military applications: artificial intelligence, robotics, autonomous vehicles, augmented and virtual reality, financial technology and gene editing," according to Brown and Singh.
I believe strongly in free trade and I welcome all forms of legitimate completion. But I genuinely believe we need to be aware of China's long-term goals and ambitions. Our lack of a holistic strategy for dealing with China poses risks of unimaginable magnitude. As an industry, we need to make our voices heard.