US high-tech export ban self-defeating

Editor's Note: The US Commerce Department is finalizing a set of rules, according to media reports, to limit exports of sophisticated technology including quantum computing and 3D printing to China. What will be the impact of these rules on China? Will they lead to a "technology cold war"? Two experts share their views on the issue with China Daily's Liu Jianna. Excerpts follow:

 

China should strengthen key technology sectors

If the export of sophisticated technology threatens the national or industrial security of the exporting country, such a ban would make sense. But the fact is that, a lack of a clear set of standards on violation of national, industrial or cyber security has given countries a rather large room to devise protectionist trade policies. Worse, such bans run counter to the basic principles of free trade.

Most US and Chinese enterprises hope to integrate with and help develop the global industrial chain despite the United States administration's efforts to do just the opposite.

And the fact that the White House has sought to politicize economic issues essentially means it is harming US companies' interests.

In the short to medium term, Chinese enterprises could suffer due to the US' policy to limit high-tech exports. But in the long run, Chinese companies would be driven to develop core technologies and promote technological innovation to offset the US policy's impact.

But despite the White House openly resorting to protectionism, especially to thwart China's technological progress, it would be a wild stretch of imagination to expect a "technology cold war" between the two sides.

Many Chinese people believe the country should further open up its economy in the face of the US' non-cooperation or intensify research and development to replace US technologies with its own. But that is no answer to how China should manage the current situation.

The answer lies in gaining irreplaceable advantages in major links of key industries, rather than setting up an industrial chain independent of the US. For instance, Japan's integrated circuit industry suffered a huge blow in the 1990s, but the US could not disintegrate itself from Japan's supply chain because Japan made the most sophisticated integrated circuit materials and equipment in the world.

As such, China should attach greater importance to industries related to national and industrial security, people's livelihoods and vital interests including information and communications technology and medical apparatus and instruments.

Jia Bei, a research fellow on industrial economics

If implemented, new rules will harm US companies

That the US is finalizing rules to curb high-tech exports exposes its Cold War mentality. Not being content with urging a number of countries to take measures to restrict China's rise, for example, through the Wassenaar Arrangement, the US is preparing to introduce specific bans directly aimed at China. Such bans, however, do not conform to global economic rules and, equally importantly, would not contribute to US enterprises' well-being.

How can the US continue to play the leading role in the field of technology if it deliberately severs ties with a major power? Also, such rules would prompt China to more actively promote innovation to develop high-tech products in order to lessen its dependence on the US and other Western economies for sophisticated technology.

And if China loses its development momentum for a lack of high-tech products, it would mean reduced mutually beneficial cooperation with and fewer development opportunities for the US. Either way the US stands to lose.

Thanks to the development of high-end manufacturing and consumption, and industrial upgrading, China presents a number of business opportunities that the US could lose due to its self-defeating policies.

To those who believe that only cooperation can benefit both sides, suffice it to say the US doesn't want to cooperate with China and, instead, has been threatening to impose higher tariffs on Chinese products and impose export and/or import bans. Which runs contrary to the spirit of cooperation on an equal footing and for mutual benefits.

As for now, China should focus on innovation and making technological breakthroughs while continuing to seek cooperation with the US on an equal footing.

Bai Ming, deputy director of the international market research institute under the China Academy of International Trade and Economic Cooperation.

The views don't necessarily represent those of China Daily.