BEIJING: Competition from China appears to be hobbling innovation in the United States, say the authors of a new study that juxtaposes import penetration and patent applications.
China’s role as a manufacturing behemoth has upset traditional economic relationships around the world. This is especially true in the U.S., which has seen imports from China rise steadily in recent decades. In 1991, China sold $1.6 billion worth of goods in America, according to U.S. government data. In 2014, that figure was $39 billion.
Over the same period, and especially since China joined the World Trade Organization in 2001, America’s trade deficit with China has swelled. Economists debate the effects of such import penetration on innovation. Some research shows that import competition leads to greater productivity by encouraging domestic firms to focus efforts on research and development (R&D). But a new paper shows the opposite effect.
