U.S.-China Trade Dispute Likely to Morph into Technology War, Says President of the U.S.-China Business Council
Structural vs. Cosmetic Changes
Allen was far less confident, however, about the prospects of addressing structural issues with China, that is, areas where the Chinese economy is an outlier to the global economy, violates WTO rules, and greatly differs from OECD norms. This is because these core dimensions touch on the role of the Chinese Communist Party (CCP) in the government and in the economy.
He counted among these structural issues the enormous role of state-owned enterprises (SOEs); the scale of subsidies going to the technology sector and their lack of transparency; prohibitions on foreign investment in sensitive industries like telecommunications and media; the unequal treatment of foreign companies; discriminatory implementation of regulations and the lack of an appeals process; uneven implementation of IP rights; the outsized role of the CCP in the economy; the dominant role of industrial policy; Xi Jinping government’s aggressive techno-nationalism, which is manifested in its calls for indigenous innovation and for self-reliance; and its excessive control over the information space.
“China is willing to make cosmetic changes to these problems,” said Allen, “even muscular changes, but no changes to the skeleton, the core, the system under which the CCP has complete control.”
A trade deal might remove the immediate threat of tariffs as a source of friction between the United States and China, noted Allen, but the essence of the conflict is not about trade: rather, it has to do with technology. “The trade war will morph into a technology war,” he predicted, and 2019 will mark a change in that direction, making life much more complicated for both American—especially Silicon Valley—and Chinese companies.
A Security Dilemma
Both the United States and China are now locked in a “security dilemma,” noted Allen. “One side takes defensive measures which the other side perceives as aggressive measures,” and “we are ratcheting up on national security.” The U.S. Department of Commerce, for instance, is looking to change the ways of dealing with Chinese companies and to expand export controls, extending their scope to a whole new category of “emerging technologies,” regarding whose definition there is intensive debate in Washington. Depending on its scope, a broad definition could jeopardize hundreds of thousands of projects and disrupt investment and global supply chains.
On the Chinese side, Allen noted, there is a parallel process going on. In 2019, we should expect China to similarly impose tightened export controls, he cautioned, cybersecurity law, personal identification information law, data localization requirements, and a strengthened national security law that, among other requirements, will ratchet up audit requirements of American companies seeking market access and the type of companies allowed to have only Chinese-origin equipment.
Both countries have given in to exaggerated security concerns that threaten the global commons, argued Allen. “American and Chinese companies have worked together in the innovation space for years in a beautiful manner. It has been a remarkably productive exercise over the last four decades that brought tremendous benefit for everyone. You can't imagine a company like Apple without China, and you can't imagine China without a company like Apple. Now all this is being put into question.”
The heightened security measures on both sides are fraught with threats to research institutions, businesses, and the innovation ecosystem at large. Academic exchanges, students, and professors will be deemed exports of knowledge subject to technology licensing laws, cautioned Allen. He asked: “How many thousands of collaborative research ventures will be impacted?”
We are entering the technology war at the wrong time, said Allen, just as China is becoming a middle-income country with hundreds of millions of middle-class citizens who want to buy American-made goods and services that U.S. companies want to sell to them. Now is the time to take advantage of China’s transitioning to a consumption-led economy, he claimed, and “become a good friend of Chinese middle-class consumers.”
China is also forging ahead with its innovative economy, particularly in areas such as AI, 5G, and aspects of the life sciences. “This isn’t a one-way street,” emphasized Allen. “We need their brains as much as they need ours […] China will remain an innovative country, and we need to deal with that.”
“This is not a time to panic,” he pointed out, “but a time to reset and ask: ‘What are the rules of the road for technology cooperation and competition? What are the rules for enforcement and how do we enforce the new rules fairly?”
“If China follows its WTO obligations then we would get there,” Allen claimed. “But if President Xi is going to be single-minded about self-reliance and cutting foreign influence on the Chinese economy, then we’re up for rough sledding and 2019 will be a definitive year in determining the course forward.”
Trade deal or no deal, in the U.S.-China race for technology supremacy, he concluded, trust is a commodity in short supply.
U.S.-Taiwan Relations in a Changing Indo-Pacific Region
Oksenberg Conference Room
616 Serra Mall
Encina Hall, 3rd Floor, Central S350
Stanford, CA 94305
On the Brink: A New Cold War with China
NOTE: THIS EVENT IS CLOSED TO THE MEDIA
No recording will be allowed during the program. RSVP required for admission. No walk-ins.
Experts talk about a new Cold War between China and the United States. The world’s two largest economies are in open trade conflict, engaged in technological competition and stoking geopolitical uncertainty. The Oksenberg Conference will explore the causes that underlie today’s intensified conflict between the United States and China. We ask: What has precipitated the confrontational approach that currently unites U.S. policy towards China? What is the future of our strategic competition in the technological, economic and security realms? If U.S.-China rivalry is allowed to escalate, what might its implications be for our international liberal order? If a “new” Cold War is forming, how might it follow or diverge from the “old” Soviet-era Cold War?
Formerly President of the National Committee on United States-China Relations, Professor Lampton consults with government, business, and social sector organizations, and has served on the boards of several non-governmental and educational organizations, including the Asia Foundation for which he served as chairman. The recipient of many academic awards, he is an Honorary Senior Fellow of the American Studies Institute of the Chinese Academy of Social Sciences, former Gilman Scholar at Johns Hopkins, and the inaugural winner of the Scalapino Prize in 2010, awarded by the National Bureau of Asian Research and the Woodrow Wilson International Center for Scholars in recognition of his exceptional contributions to America’s understanding of the vast changes underway in Asia.
Dr. McFaul served for five years in the Obama administration, first as Special Assistant to the President and Senior Director for Russian and Eurasian Affairs at the National Security Council at the White House (2009-2012), and then as U.S. Ambassador to the Russian Federation (2012-2014). He has authored several books, most recently TheNew York Timesbestseller, From Cold War to Hot Peace: An American Ambassador in Putin’s Russia. Earlier books include Advancing Democracy Abroad: Why We Should, How We Can; Transitions to Democracy: A Comparative Perspective(eds. with Kathryn Stoner); Power and Purpose: American Policy toward Russia after the Cold War (with James Goldgeier); and Russia’s Unfinished Revolution: Political Change from Gorbachev to Putin.
Jean C. Oi is the William Haas Professor of Chinese Politics in the Department of Political Science and a Senior Fellow of FSI at Stanford University. She is the founding director of the Stanford China Program at Shorenstein APARC and is the founding Lee Shau Kee Director of the Stanford Center at Peking University. Professor Oi has published extensively on political economy and the process of reform in China. Her books include Zouping Revisited: Adaptive Governance in a Chinese County, co-edited with Steven Goldstein (2018); and Challenges in the Process of China’s Urbanization, co-edited with Karen Eggleston and Wang Yiming (2017); Rural China Takes Off (1999); Property Rights and Economic Reform in China (1999), co-edited with Andrew Walder; and State and Peasant in Contemporary China (1989). Professor Oi also has an edited volume, China’s Path to the Future: Challenges, Constraints, and Choices, co-edited with Dr. Thomas Fingar (forthcoming, Stanford University Press). Her recent articles include “Unpacking the Patterns of Corporate Restructuring during China’s SOE Reform,” co-authored with Xiaojun Li in Economic and Political Studies (2018); and “Reflections on 40 Years of Rural Reform,” in Jacques deLisle and Avery Goldstein, eds., Reform and Opening: 40 Years and Counting, forthcoming. Her current research centers on fiscal reform and local government debt as well as continuing SOE reforms in China.
Secretary Condoleezza Rice is currently the Denning Professor in Global Business and the Economy at the Stanford Graduate School of Business; the Thomas and Barbara Stephenson Senior Fellow on Public Policy at the Hoover Institution; and a professor of Political Science at Stanford University. She is also a founding partner of RiceHadleyGates, LLC.
From January 2005 to 2009, Rice served as the 66th Secretary of State of the United States, the second woman and first African American woman to hold the post. Rice also served as President George W. Bush’s Assistant to the President for National Security Affairs (National Security Advisor) from January 2001 to 2005, the first woman to hold the position.
Rice served as Stanford University’s Provost from 1993 to 1999, during which she was the institution's chief budget and academic officer. As Provost, she was responsible for a $1.5 billion annual budget and the academic program involving 1,400 faculty members and 14,000 students. In 1997, she also served on the Federal Advisory Committee on Gender -- Integrated Training in the Military.
From 1989 through March 1991, Rice served on President George H.W. Bush’s National Security Council staff. She served as Director; Senior Director of Soviet and East European Affairs; and, Special Assistant to the President for National Security Affairs. In 1986, while an international affairs fellow of the Council on Foreign Relations, Rice also served as Special Assistant to the Director of the Joint Chiefs of Staff.
As professor of Political Science, Rice has been on the Stanford faculty since 1981 and has won two of the highest teaching honors – the 1984 Walter J. Gores Award for Excellence in Teaching and the 1993 School of Humanities and Sciences Dean's Award for Distinguished Teaching.
She has authored and coauthored numerous books, including three bestsellers, Democracy: Stories from the Long Road to Freedom (2017); No Higher Honor: A Memoir of My Years in Washington (2011); and Extraordinary, Ordinary People: A Memoir of Family (2010). She also wrote Germany Unified and Europe Transformed: A Study in Statecraft (1995) with Philip Zelikow; The Gorbachev Era (1986) with Alexander Dallin; and Uncertain Allegiance: The Soviet Union and the Czechoslovak Army (1984).
In 1991, Rice cofounded the Center for a New Generation (CNG), an innovative, after-school academic enrichment program for students in East Palo Alto and East Menlo Park, California. In 1996, CNG merged with the Boys and Girls Club of the Peninsula (an affiliate club of the Boys and Girls Clubs of America). CNG has since expanded to local BGCA chapters in Birmingham, Atlanta, and Dallas. She remains an active proponent of an extended learning day through after school programs.
Since 2009, Rice has served as a founding partner at Rice Hadley Gates, LLC, an international strategic consulting firm based in Silicon Valley and Washington, D.C. The firm works with senior executives of major companies to implement strategic plans and expand in emerging markets. Other partners include former National Security Advisor Stephen J. Hadley and former Secretary of Defense Robert M. Gates.
Rice currently serves on the boards of Dropbox, an online-storage technology company; C3, an energy software company; and Makena Capital, a private endowment firm. In addition, she is vice chair of the board of governors of the Boys and Girls Clubs of America; a member of the board of the Foundation for Excellence in Education; and a trustee of the Aspen Institute. Previously, Rice served on various additional boards, including those of: the George W. Bush Institute; the Commonwealth Club; KiOR, Inc.; the Chevron Corporation; the Charles Schwab Corporation; the Transamerica Corporation; the Hewlett-Packard Company; the University of Notre Dame; the John F. Kennedy Center for the Performing Arts; and, the San Francisco Symphony Board of Governors.
In 2013, Rice was appointed to the College Football Playoff Committee, formerly the Bowl Championship Series.
Born in Birmingham, Alabama, Rice earned her bachelor's degree in political science, cum laude and Phi Beta Kappa, from the University of Denver; her master’s from the University of Notre Dame; and her Ph.D. from the Graduate School of International Studies at the University of Denver.
Rice is a Fellow of the American Academy of Arts and Sciences and has been awarded fifteen honorary doctorates. She currently resides in Stanford, California.
Bechtel Conference Center
616 Serra Mall
Encina Hall, Central, 1st Floor
Stanford, CA 94305
Shorenstein APARC Introduces New Journalism Award Selection Committee, Seeks 2019 Award Nominations
After Hanoi: APARC and CISAC Experts Discuss the Outcome of the Trump-Kim Summit and the Future of U.S.-DPRK Diplomacy
Following the abrupt ending of the highly anticipated second bilateral summit between President Donald Trump and North Korean leader Kim Jong-un in Hanoi, APARC and CISAC scholars evaluate the result of the summit, its implications for regional relations in Northeast Asia, and the opportunities moving forward towards the goal of denuclearization of the Korean peninsula.
This Q&A with Noa Ronkin features Andray Abrahamian, the 2018-19 Koret Fellow in Korean Studies at APARC, whose work with the nonprofit Choson Exchange has taken him to the DPRK nearly 30 times; Siegfried S. Hecker, top nuclear security expert, former Director of the Los Alamos National Laboratory, Research Professor of Management Science and Engineering, Emeritus, and Senior Fellow at CISAC/FSI, Emeritus; and Gi-Wook Shin, Professor of Sociology, William J. Perry Professor of Contemporary Korea, Director of APARC, and founding Director of the Korea Program.
Video: KQED Newsroom Talks to Yong Suk Lee about the Trump-Kim Hanoi Summit
Video Interview with Koret Fellow Andray Abrahamian
We sat down with our 2018-19 Koret Fellow in Korean Studies Andray Abrahamian to discuss North Korea denuclearization and the approaching Trump-Kim second summit in Hanoi; Abrahamian's work with the nonprofit organization Choson Exchange that took him to North Korea nearly thirty times; his book that compares North Korea and Myanmar; and his fellowship experience. Watch:
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The Chemistry Between Donald Trump and Kim Jong Un
Trump and Kim share a common desire for development.
At first glance U.S. President Donald Trump and North Korean leader Kim Jong Un seem like an unlikely pair. A few years back they were calling each other “Rocket Man” and a “dotard,” and tension between the United States and North Korea was escalating rapidly in 2017. But in a few days they are slated to meet for the second time, and according to Trump they had “fallen in love” not long after their first encounter. What could have created such intimate bond between the two? The common interest that brings the two together is the desire for development — economic development in the case of Kim and property development in the case of Trump.
Read the full article on The Diplomat.