An escalation of the recent trade tension between China and the US has set more barriers for tech cooperation between the two countries. The trade disputes not only impact China negatively, but the US, too.

The United States has been holding back its competitive high-tech and intellectual exports to China since it began worrying about innovations growing faster in Chinese companies, even though the overall scale and scope of technological innovation in China is smaller than in the US.

“Technology trade is based on agreements between the buyers and the sellers, it has to be fair. I don’t think American companies are stupid enough to give their technology [away] without consent. It is a fair game. China has a reliance on US chips like many other markets. And all the market players will find ways to break the US dominance,” said Peter Sun, chairman and CEO of Inspur, a leading Chinese server hardware maker.

However, voice recognition company iFLYTEK’s chairman, Liu Qingfeng indicated that the technology trade model has shifted from China importing US technology to the two nations cooperating in research and development. The disputes may force the Chinese tech industry to evolve and better serve home turf and non-US market.

“Many of our US partners want to bring iFLYTEK’s technology, which has been successful in China, to the US market for localization. China has strength in algorithm and data, policy support and consumer readiness,” said Liu.

“We do have a reliance on US chips. But in AI, we need a full spectrum of chips for different functions. And Chinese chip makers are overtaking international peers in market positions in some of those segmented markets,” Liu added.

At the same time, Liu maintained that China needs to enhance its IP protection to give fair treatment to both Chinese and international companies. Without that, Chinese companies will also lose motivation to develop original technology.