U.S. strong-arm tactics won't stop China's innovation

Editor's note: William Jones, a special commentator on current affairs for CGTN, is the former Washington Bureau Chief for Executive Intelligence Review (EIR) News Service and a non-resident fellow of the Chongyang Institute for Financial Studies. The article reflects the author's opinions and not necessarily the views of CGTN.

Countries that provoke trade wars often find that the results of such measures come back to haunt them. None of them, of course, is willing to admit that the United States is conducting a trade war against the People's Republic of China. Yet in the critical sphere of high technology products, that's exactly what's happening, and it is most clearly expressed in the so-called chips war, where the U.S. is bending over backwards to prevent China from accessing the cutting-edge semiconductors that are readily available in the world market.

Not only are they restricting the sales of such semiconductors from the U.S., but also applying pressure on other big producers, like South Korea, Japan and the Netherlands from selling their best products to China. In the latest plans for creating this "embargo," one might get the impression that the U.S. administration has been obsessed with the importance of creating an H.G. Wells-type of "one world" machination. The current agenda seems to be the creation of an Organization of the Petroleum Exporting Countries-like cartel in semiconductors, bringing the major players, the U.S., Japan and South Korea, among others, into a multinational state-owned enterprise of sorts.

The question remains whether such a conglomerate can actually be maintained. You have at least five major countries and regions that are competing with each other in this important area of technology. Will they be willing to submit to the "diktat" of some "supremo" at the cost of their own interests? And what happens to that "innovative spirit" that keeps countries at the top of their game? Will individual companies allow themselves to be relegated to following the demands of their governments rather than their own innovative ideas? 

Sounds pretty wild, yet these issues have been seriously discussed both in the context of the U.S.-backed "Indo-Pacific Economic Framework" and in the agreements involving the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the U.S.-Mexico-Canada Agreement.

The target here is obviously China. China's rapid growth and development as a producer of high-technology products has caused virtual hysteria in U.S. policy circles, so long accustomed to view themselves as the leaders in technology. With control over its allies, the U.S. does possess a certain "factitious advantage" in the area of technology, but this may not last for long.

At China's "Two Sessions," the annual meetings of the top legislature and top political advisory body, the decision was taken to accelerate the push for breakthroughs in technology. With such breakthroughs in innovation in China in the field of semiconductors, that "factitious advantage" held by the West will quickly be overcome.

The size of China's middle-income group has passed the 500-million mark, roughly 36 percent of its total population, and the number of Ph.D. graduates with a background in science and math in China has outweighed that of the U.S. 

So, we are looking at a situation in which China is moving rapidly to fill the gap left by the trade restrictions in high-tech products. It will no doubt lead to further restrictive measures from the U.S. and further attempts to regiment production in the countries of the U.S. "consortium." But given the problems that such restrictions may have on the individual economies involved, you will no doubt also see considerable resistance arising from the countries of this make-shift alliance, all of which have an interest in the huge Chinese market.

This was also evident in the recent visit of Netherlands Prime Minister, Mark Rutte, when he came to China in late March to help relax the tensions between the two nations caused by his country's adherence to the U.S. diktat of not selling certain lithography machines to China. In a personal meeting with Rutte, Chinese President Xi Jinping underlined that "the Chinese people also have legitimate development rights, and no force can stop the pace of China's scientific and technological progress."

Rutte also indicated a good deal of concern over the matter, saying that decoupling is not a policy choice for the Dutch government. There is no indication that the government of the Netherlands will "buck the U.S." on this issue at the moment, but it is clear that the contradiction between the U.S. embargo attempts and the objective economic interests of the countries have caused disruption to their alliance.

Meanwhile, China will push ahead with its own innovation program. In addition, the support which China has been receiving from the Global South, which in fact represents the global majority, clearly indicated that any Wellsian "one world" fantasies, held by the U.S., will not replace the community of fully sovereign nations any time soon.

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