Policymakers in the United States, particularly conservatives, ought to support government policy that incentivizes American industry to compete against an economically and technologically surging China, which will level the playing field against a competitor that fundamentally does not play fair.
Specifically, policymakers should support and extend existing policies that call out China for its unacceptable behavior, impose economic penalties and barriers for China’s malign activities and unfair competition, and go further by both opposing new legislation and regulatory efforts that create barriers to technological innovation in the United States and by removing existing barriers to U.S. innovation at home.
Policymakers must also work across the aisle to develop incentives and investments that both kickstart and undergird U.S. economic and national security for the next generation. This includes incentivizing U.S. private sector companies–which benefit from being part of the American system–to partner with the U.S. government on critical national security matters.
Effective American Policy Must Counter China’s Malign Behavior.
Key elements of Chinese national policy, including China’s “state capitalist” economy and its national military-civil fusion strategy, and its economic coercion of other nations, blur the lines between the public and private sectors and create very real market distortions that threaten American prosperity and security in both the short- and long-term.
China’s statist policies mean that the Chinese Communist Party has significant influence over business strategies of private companies as well as state-owned enterprises, allowing the government to leverage all applicable civilian technology for military purposes. As a result, private entities that further the state’s national goals are often heavily subsidized by the state, either directly or through the allocation of infrastructure, land, and other benefits.
The Chinese government also employs economic coercion of other nations to pursue its long-term political and economic agenda in an opaque and partially deniable manner, while formally opposing the United States’ use of its own economic power, including undermining American and allied sanctions.
Given these circumstances, policymakers should counter the Chinese Communist Party’s (CCP) unacceptable economic and political behavior:
U.S. policy should seek to clearly and distinctly expose and inhibit these malign behaviors of the CCP.
While the American government’s response to date has certainly become bolder in the past few years (i.e., calling out certain companies and taking limited action against manipulative market activities by Chinese state-owned and state-influenced enterprises), the United States must significantly broaden and deepen these efforts to meet the challenge presented by the Chinese Communist Party.
An American Technology Policy Does Not Require Picking Winners and Losers; Rather, it Should Incentivize and Energize Private Sector Innovation.
The United States faces a generational political, ideological, economic, military, and technological competition with China.
To effectively compete and win against China, the United States needs a technology policy that is focused on incentivizing, rather than stifling, private sector innovation; to that end, while the U.S. government should not pick economic winners and losers, nor directly own or manage the means of production, it can and should play a central role in:
Policymakers Ought to Support the Right Kind of Technology Policy that Incentivizes Investment and Partnership Between the Government and Industry on Key American Priorities.
There has been much debate about whether and how the U.S. government ought to play a role in setting the conditions for America’s national economic and technological success in the ongoing competition with China, and specifically, whether establishing a national technology policy is advisable.
There is a long history of the U.S. government setting policies that have the benefit of ensuring long-term American economic and technological leadership in key national security areas.
While concerns about overweening government intervention in the economy are well-founded and such policies ought to be avoided, our nation has a long history of government supporting private innovation by providing funding for basic and applied research and access to long-lead capital in key areas, such as defense and telecommunications.
American Policymakers Should Seek to Ensure that U.S. Companies Partner with the U.S. Government as They Benefit From the American System and Grow in their Geopolitical Influence.
American policymakers should make clear to U.S. industry that it is no longer acceptable to claim the benefits of being U.S. companies while seeking to avoid the critical need to partner the government to protect the very system that provides those benefits.
This paper is a product of the Forum for American Leadership’s Technology and National Security Innovation Working Group.
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