NEWS

United States and China, in a fake trade war?

Tuesday, November 19, 2019

Recently, a partial and staged agreement was announced in the trade war between the United States and China. However, it seems that this conflict will not come to an end, since there are constantly reasons to consider that there are no commercial foundations, since the two largest economies in the world probably seek to position themselves as the technological, economic and political leaders.

According to Carolina Pan from the Research Department of Harvard University and Andrés Domínguez, Director of the Consulting Network, there is important data and reasons that made evident this is more of a struggle for power than trade.

To this end, let us review that China has repeatedly been accused by its main trading partners, from the United States, Japan, Hong Kong, South Korea and Germany, of plagiarism in technology, design and processes; however, imitation is not a risk, but rather, their concern is that China will become the world’s greatest technological power in the short term.

In fact, we can see that recently China has invested more in research and development, besides, more and more Chinese than Americans are graduating with postgraduate degrees in engineering and science. Also, in recent years there has been a notable increase in the number of Chinese patents. Although its percentage of GDP is still far from the United States, China has managed to turn its technology into state policy, positioning itself with several programs it has sponsored such as the “Made in China 2025” and the “National Medium- and Long-Term Program for Science and Technological Development”.

As a result, China has grown by leaps and bounds in terms of technology and, consequently, the United States feels threatened by a possible loss of market power, loss of jobs and a threat to national security, due to several accusations of spying on the Chinese government and Huawei, the second largest producer of cell phones in the world, for being an accomplice in these activities.

Consequently, the company was barred from participating in the construction of the 5G mobile infrastructure network in the United States, Japan, Australia and New Zealand — wow, several countries in Europe, South Korea and Canada.

During the early 2000, after the trading opening China, the United States lost its market share in industries such as clothing, textiles, furniture, etc. Thus, the loss of U.S. leadership implies putting employment in these sectors at risk, as they are the most qualified and best paid. Considering that the average wage in the technological industries is 75% higher than the American average wage, and if these jobs are lost, there would be consequences for social economic welfare.


Source:

  • Department of Research Harvard University
  • Consulting Network