China Not Immediate Threat To US Technology Leadership

by: East-West Center

Contrary to common misperceptions, China’s innovation policies do not pose a threat to U.S. leadership in science and technology, East-West Center economist Dieter Ernst said today in testimony before the congressionally mandated U.S.-China Economic and Security Review Commission. “The U.S. retains a strong lead in overall innovative capacity, and China still has a long way to go to close the innovation gap,” Ernst said.

Instead, he said, China’s progress in innovation should be seen as a wake-up call for America: “Rather than fearing China and blaming it for our problems, we need to focus constructively on how this relationship can be improved.”

Ernst urged the U.S. government and private sector to work together in implementing proactive trade diplomacy that takes into account the diverse forces and the conflicting agendas that drive China’s own innovation policy, and in developing a national strategy to upgrade America’s innovation system in order to cope with the competitive challenges posed by China. “Trade diplomacy and national innovation strategy are interrelated, and hence we need to pursue them simultaneously,” he testified. “Corrective action needs to start now, but there is still time to adjust policies and corporate strategies to the new challenges of an increasingly multi-polar global knowledge economy.”

Ernst was among a handful of experts invited to testify at today’s hearing before the commission, which was created by Congress in 2000 to monitor the national security implications of the bilateral trade and economic relationship between the United States and China, and to provide recommendations for legislative and administrative action where appropriate. The topic of the hearing was “China’s Five Year Plan, Indigenous Innovation and Technology Transfers, and Outsourcing.”

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