US urged to use Beijing playbook to secure Chinese tech transfers

US officials are recommending that the United States emulate China's approach to welcoming Chinese investment and technology, while implementing safeguards, according to experts at an event organized by the Quincy Institute. This comes as Washington considers new, broad restrictions on Chinese technology, such as a potential ban on connected-vehicle technology and imports of Chinese humanoid robots and power inverters.

However, the experts argue that a blanket ban without a strategic plan to boost domestic competitiveness would not help the US catch up in areas where China currently leads.

Jake Werner, director of the East Asia program at the Quincy Institute, suggests that the US should target sectors where Chinese technological expertise could be beneficial and then apply that knowledge to help the US catch up. This could be achieved through joint ventures and technology licenses. Werner questions why the US cannot follow China's strategy of incorporating American business and technology into its advanced sectors.

The debate over how the US should handle Chinese technology has intensified as China has gained dominance in areas such as electric vehicles and batteries. While some argue for strict bans to address security risks, others believe that allowing limited Chinese involvement could lower costs for US consumers, promote innovation, and strengthen US competitiveness.

Susan Helper, former chief economist at the US Department of Commerce, notes that China successfully opened its economy to learn from European and American companies, suggesting that the US should adopt a similar approach with appropriate protections in place.

Experts also emphasize the importance of implementing measures to prevent security risks, such as requiring local suppliers and establishing regulatory barriers that compel Chinese firms to establish a presence in the US for sensitive areas like data storage. However, the willingness of China to permit such arrangements remains uncertain, as Beijing has been tightening controls on the outflow of technology in strategic sectors in recent years.

The window for learning from China may be closing, and it is challenging for Washington to determine where national security risks apply and how to address them effectively.