China's technology thefts are a greater concern than trade for agriculture and energy products from the US
The U.S.-China trade war is making headlines, but the most important aspect of the long-term economic competition with China isn’t soybeans or natural gas, it’s technology. The dual flashpoints of economic espionage and backdoor surveillance could precipitate the great uncoupling of the world’s two largest economies.I suspect this is the major hangup in getting a deal with China on trade. They do not want to give up their growing advantage.
Although American politicians have just started to pay attention, China has been engaged in a decadeslong, systematic, state-sponsored effort to steal U.S. technology. Beijing has relied heavily on stolen trade secrets and intellectual property to build its own indigenous manufacturing and technology base. Recent U.S. intelligence community estimates suggest that China employs 30,000 military cyber spies and 150,000 private sector cyber experts whose job is to steal foreign secrets and technology.
China’s economy has thus grown substantially, often at the cost of American companies. China is estimated to be responsible for 50-80% of all international intellectual property theft worldwide. This costs our economy alone an estimated $300 billion a year. A congressional commission has found that Chinese espionage “comprises the single greatest threat to U.S. technology.”
In many high-tech areas, China is not only catching up with America, but moving ahead. In artificial intelligence and quantum computing, Chinese scientists are some of the world leaders. In advanced microprocessing, China aims to increase the percentage of Chinese-made integrated circuits in its market from 9% five years ago to 70% by 2025. These technologies will pose both economic and military challenges. There are even concerns about less advanced technologies, such as commercial rail cars and personal drones, which are increasingly dominated by Chinese producers. Last month, Senate Minority Leader Chuck Schumer, D-N.Y., called for an investigation into a Chinese company that has won a subway car-redesign contest, though hasn’t been awarded a contract to build them for New York City.
The research and development community in China is growing, and this has allowed Chinese firms to take a more active leadership role in setting global standards for information networks, as they are on 5G networks, for example. American technology firms often find themselves outgunned on international bodies that set and govern global rules, such as the International Telecommunication Union. As a result, Chinese companies are not only developing new networking technologies, but they're often writing parts of the rulebook.