WASHINGTON—How would you like to play basketball with an opponent that insisted on lowering his net by three feet and refused to dribble the ball?
That’s what confronts the United States in its trade relationship with China, according to a recent hard-hitting report—and something’s got to give.
Robert D. Atkinson, president of the Information Technology & Innovation Foundation (ITIF) and author of the report, likened the challenge posed by the Chinese regime’s industrial policy to the Cold War that faced the United States decades ago: “George Kennan said ‘contain and roll back’ Soviet expansion. We’ve got to contain and roll back Chinese innovation mercantilism,” Atkinson said to a standing-room-only crowd in Washington. “The first thing is to recognize what a big and severe issue this is.”
There is no shortage of evidence for that. In 2011 China exported $276.5 billion more worth of goods to the U.S. than the U.S. exported to China. The biggest volume of export by the United States to China is waste paper and scrap metal. Millions of U.S. jobs have been wiped out as a consequence of strategic Chinese industrial policy.
“China is practicing economic mercantilism on an unprecedented scale. China seeks not merely competitive advantage, but absolute advantage,” the report says in its opening salvo.
The take-no-prisoners approach to trade, led by the communist Party-state, flies in the face of global norms and has a series of destructive secondary impacts, the report indicates.
“China fundamentally switched strategies” from receiving foreign investment to starting to directly compete with its investors in 2006, Atkinson said. That’s when the policy of “indigenous innovation” was rolled out in a government document.
