Impact of the Increasingly Contentious U.S.-China Relationship on Technological Development and Innovation
Adam Segal | January 6, 2019
Responding To: Examining the Impact of the U.S.-China Trade Dispute on Technological Innovation
90 days. After the Trump-Xi dinner at the G-20 meeting in Buenos Aires, that is the amount of time that the Trump administration declared that the Chinese and the US governments have to come to agreement to resolve the bilateral trade and technology tensions. Tellingly, the Chinese side made no official declaration of the 90 days. This is just one of many indications that there are so many barriers to an agreement, that the chances of success appear quite slim. For one, even though the Chinese declared that they had reached “important consensus” (zhongyao gongshi) and the Trump administration listed specifics that were “agreed” upon, the dinner produced no clearly specified joint statement. This allowed both sides to declare victory after the dinner without jointly specifying any deliverables or commitments to their respective domestic audiences.
More telling is a comparison of the official statements issued immediately after the dinner by White House Press Secretary Sarah Huckabee Sanders and Chinese Foreign Minister Wang Yi. The sheer lack of overlapping consensus indicates either that both sides had no clear sense of what was commonly agreed, or else more likely both sides willfully ignored points of agreement as a negotiating tactic and to frame the dinner in a positive light.
For instance, in terms of the most immediate issue of trade and tariffs, Sanders was very specific and framed the results as a unilateral tariff reprieve offered by President Trump, stating, “[The President] will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time…if at the end of [the 90 days], the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.” In stark contrast, Wang offered no specifics or 90 day timeline, and made it appear as if the warring parties had agreed to a mutual ‘truce’, stating “he heads of state reached consensus to stop adding new tariffs on each other” (tingzhi xianghu jiazheng xin de guanshui).
Outside of trade, Sanders again was specific and wide-ranging, stating, “President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.” By contrast, Wang’s statement made no mention of these issues, instead focusing almost exclusively on trade (and vague ‘cooperation’) and emphasized mutually beneficial and win-win negotiations that will also be in China’s interests. Thus, China will purchase more American goods, however, they will be “according to the needs of the domestic market and the people” (genju guonei shichang he renmin de xuyao) and he declared that both sides (not just China) will open their markets further (xianghu kaifang shichang).
The one area of general agreement concerned North Korea in that both statements positively mentioned a ‘nuclear free Korea.’ However, even here there were subtle differences in that Sanders sought to rope Xi into future negotiations, stating “President Trump, together with President Xi, will strive, along with Chairman Kim Jong Un, to see a nuclear free Korean Peninsula.” Wang largely put the burden on Trump and Kim offering that the “Americans appreciate China’s active role” (Meifang zanshang Zhongfang de jiji zuoyong).
Given that the two official statements remain so far apart, it is hard to imagine that such momentous and long-standing issues as forced technology transfer, NTBs, IPR and cybersecurity will be resolved. Most likely, in 90 days, prepare for déjà vu all over again.
Mark Dallas is a professor of political science and Asian studies at the Union College in New York. He is a participant in the Initiative for U.S.-China Dialogue on Global Issues faculty research group on business and trade.
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