For years, the Chinese government has helped its companies take the lead in key technology sectors, but with the US-imposed trade war causing an economic pinch, it remains to be seen if Beijing will change its policy.
In an article published in the Harvard Business Review in 2010, two economists predicted the ongoing trade war between the United States and China.
That year China surpassed Japan and became the world’s second largest economy right behind the United States, a spot it still maintains.
Thomas Hout and Pankaj Ghemawat, the authors, saw China helping steer its companies into the high-tech era, something they said would create friction with the US and European governments.
Beijing was forcing multinational companies to share their technology and designs with local Chinese partners in sectors such as high speed rail and renewable energy, says Hout.
“So we figured that this race will continue and Western governments will make attempts to contain it and that’s exactly what’s happened,” he told TRT World in a recent interview.
Since last year, the US and China have targeted each other’s exports with tariffs. Washington accuses Beijing of devaluing Chinese currency, the renminbi, to make its exports cheaper and stealing technology from American firms.
The US trade deficit – the difference between exports and imports – with China hit record high of more than $323 billion in 2018.
The two sides are now in talks to diffuse tensions and officials expect some sort of an outcome later this month.
