ITIF blasts China for boosting its own technology providers

Great Wall of China with crowd
China boosts its own tech innovators with massive subsidies and barriers to its markets from firms based in the U.S. and allied countries, according to a Washington think tank. While the view is not a new one, it comes at a critical time as the Biden administration begins focusing a trade agenda with China and other Asian nations. (Getty Images)(PEDRE/iStock/Getty Images Plus/Getty Images)

 

 

A Washington technology policy think tank took aim at China on Monday, saying that nation’s innovation mercantilism has harmed the pace of global innovation by boosting its domestic players with massive subsidies, and erecting barriers to its markets from outsiders.

The Information Technology and Innovation Foundation estimated if it were not for China’s policies there would be 5,100 more U.S. patents annually in the semiconductor sector alone.

“China is not engaged in anything even remotely approaching free trade, especially with regards to its advanced-technology sectors,” said ITIF President Robert Atkinson in a statement.

He said China uses “any means necessary” to undermine global trade. “The U.S. and its allies need to pressure China to end its mercantilist practices and encourage the World Trade Organization to focus more on the innovation effects of trade distortions.”

ITIF spent a year examining five industries and found that China’s support for Huawei and ZTE diminished the positions of rivals such as Ericsson and Nokia, resulting in 75% fewer standards-based 5G patents than would have been realized otherwise.

The think tank reached similar conclusions for high-speed rail, solar photovoltaics, biopharmaceuticals and semiconductors. Similar trends are underway in shipbuilding, motion pictures and aerospace, it said.

Atkinson said China’s mercantilism does not threaten only the U.S. economy and national security, but the entire world across a wide array of sectors.

The ITIF report calls on the U.S. and allies to limit market access for innovation-based goods and services supported by the Chinese government. Allies need to cooperate more on technology policy and establish trade agreements that allow for the free flow of innovation-based goods, the foundation said.

ITIF condemnations of China’s policies setting up barriers to U.S. companies seeking to sell in China are nothing new, but they come at a time when the Biden administration is weighing ways to refocus trade policies with China after years of tariffs on Chinese goods initiated under the Trump administration.

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