Politics of technology between China and the West

China’s domestic imbalances and overcapacity, due to state subsidies, have for the first time taken center stage in trade talks with the United States, further complicating the already complex bilateral ties.

In Beijing last week, American Secretary of Commerce Janet Yellen argued that Chinese internal overcapacity in crucial sectors such as electric cars, solar panels and telecommunications – bred through calculated national policies of targeted support – is key to bilateral trade imbalances.

This means that the decades-old, thorny issue of US-China trade imbalances has moved beyond the simple metrics of mere quantity – so many hundreds of billions a year to be settled somehow – and has touched on the core of China’s strategic plan: Beijing’s ambition to equal or surpass the technological production of the US.

For Beijing, technological innovation in new productive forces is necessary as the US de-risking policy aims to cut China out of its technology transfer. The US accuses China of serious intellectual property rights violations and of using dual-use technology for military purposes.

According to a Xinhua report on the April 2 phone call between Presidents Xi Jinping and Joseph Biden, China argued:

A few days later, Yellen replied that trade and technology are intertwined; China’s overcapacity is at the heart of global trade imbalances. The atmosphere of her meetings in Beijing was apparently warm and cordial, yet her message was ice-cold. While it might not be openly political but technological, the race is ongoing.

China has invested in new productive forces, and the USA is undergoing its own artificial intelligence revolution. China and the West are diverging in their paths to developing new technology. In the