China is long known for ‘reverse engineering’ samples of modern technology. While it is still true to some extent it is not the way it gets all the technology. The main route the technology enters China is voluntary transfer of all the necessary knowledge from the foreign investors to Chinese entities. It is condition to enter the Chinese market or to build a factory there. You can’t just do ‘secret things’ and import them away. This legislation has led to huge momentum China has utilizing against their foreign competitors. And that is the rule president Donald Trump wish to extract from the trade and investing customs of the World Factory.
Previously it became known that US President Donald Trump could introduce this week new duties worth $ 200 billion for goods produced in China. The WSJ wrote that Trump wanted to do this to increase pressure on China ahead of the next round of talks.
Although important this practice is no more cornerstone of China development as the country has managed to create a sustained scientific schools at home. China is no more a copycat as scientific product of the Chinese labs is already bigger than EU, UK and Israel combined. It is quite probable that new technologies will appear in China and US will pay the patent fee to use it. It is a close perspective judging from the rapid development of China.
China may refuse to participate in new trade negotiations with the US because of the possible introduction of new barriers on Chinese goods, The Wall Street Journal reported with a reference to sources in the Chinese government. Beijing feels that negotiations under pressure from the White House may not be appropriate.
In July, the US slapped a 25-percent duty on Chinese goods worth $ 50 billion. China responded to this speculatively. The list of goods approved by Washington, in particular, electronics and medical equipment manufactured in China.
Although predicted by the liberal economic schools the catastrophe is not there. Quite the opposite – US jobs are on the rise and many corporations are rethink to pull the manufacturing back to USA.
Chinese retaliation was not as serious as predicted. Beijing raised tariffs for grain and food products made in the US. It had no effect on the respective sectors of US economy.