China is seeking technological self-sufficiency and even superiority in key industries. It has concentrated military spending on advanced technologies. Its Belt and Road Initiative proposes a trillion-dollar investment program to project China’s influence across the world. What is China’s grand design, and how should the United States respond to it?
China has ripped out the old developing world economy and creating a technological economy. The Belt and Road is offering that technological transformation to other countries in exchange for joining China’s economic bloc.
China’s debt is owed to itself and the funds were used to build out its infrastructure. China will not collapse and is a powerful innovative economy. China has cut exports from 36% in 2009 to 18% now.
The tariffed industries were mostly ones that China wanted to exit anyway. This is just forcing a more accelerated and more painful exit than the one China was already making.
David P. Goldman is a columnist at Asia Time and was global head of debt research at Bank of America and head of credit strategy at Credit Suisse.
David Goldman recommends that the US should:
* Work with India, Japan and South Korea to offer an alternative Belt And Road Initiative to support the industrial and technological transformation of developing countries
* Engineer a brain drain from China where top scientists, technologist and entrepreneurs are enticed to move to the US
* US should focus on drone swarms and new military technology and not aircraft carriers or F-35s.
* Require semiconductors to be made at US-based fabs
* We need to recreate powerful corporate laboratories
This will be a very long innovation war. The US has to return to the policies that ensure that victory in the past the US has underestimated China but Goldman believes the new policies will let the US win.
SOURCE- Youtube Heritage Foundation, David P. Goldman
Written By Brian Wang, Nextbigfuture.com