Bonny Lin, Howard J. Shatz, Nathan Chandler, Cristina L. Garafola
The administration of President Donald Trump pursued an enhanced—and, in some ways, novel—set of policies designed to confront China over its transgressive and anticompetitive economic behaviors, such as theft of technology and intellectual property and limitations on market access for U.S. businesses. How did the U.S. business community view these policies, and did it broadly support increased U.S. efforts to counter problematic Chinese economic behavior? If not, how could the U.S. government implement policy to better achieve policy goals while also addressing corporate concerns?
In this report, the authors address these questions, which are central to determining whether the U.S. government has crafted an overall economic strategy or approach toward China that is sustainable and feasible. How the business community thinks the United States should deal with China is an overlooked and underappreciated topic, and the United States might find it difficult to compete against China without support from the business community.
The authors assess how the U.S. business community—focusing on the manufacturing, technology, and financial sectors—viewed the Trump administration's China policies through several different lenses: from the perspective of individuals, from the perspective of different firms over time, and from the perspective of specific industry sectors and subsectors. The analysis focuses on Trump administration actions toward China from 2017 through fall 2020.
Key Findings
Across the manufacturing, technology, and financial sectors, U.S. businesses broadly agreed with the Trump administration's identification of problematic Chinese behavior and practices, but they had concerns about some specific approaches and measures adopted.
The American public views China as a security threat but not necessarily as an economic threat.
Despite concerns about unfair Chinese government actions, many business leaders continued to see the Chinese market as an opportunity.
Corporate leaders voiced concern that the tariffs the United States levied on Chinese products hurt U.S. businesses more than Chinese ones.
Corporate leaders across all three sectors expressed frustration at what they perceived to be the inconsistent way in which the Trump administration consulted U.S. businesses for input before rolling out major policy changes.
Compared with the other two sectors, the financial sector expressed more positive sentiments about the administration's approach to China, and it may have benefited from the administration's policies.
There was mixed reaction from the business community regarding whether the United States should use economic sanctions to encourage China to change its geopolitical positions or practices.
The U.S. government might not always need to take action against problematic Chinese products or actors; the U.S. public might avoid buying such products if it is informed of the risks.
Ultimately, the U.S. business community will follow whatever laws and regulations the U.S. government institutes regarding doing business with China. However, businesses will certainly try to find legal workarounds, staying within the letter of the law rather than the spirit.
Recommendations
Adopt an economic strategy that balances efforts to counter China with investments in strengthening and sustaining U.S. economic and technological leadership, including an increase in funding for science, technology, engineering, and mathematics education and research and providing tax incentives for companies to invest more in research and development.
Embrace the full range of trade and economic tools to counter China, and expand those tools.
Work with allies and partners to embrace multilateral measures against problematic Chinese activities; the combined Western economies have far more leverage together than any one of them individually—even the United States.
Consult U.S. business leaders regularly in advance of major policy changes; even if leaders disagree with a proposed policy change, consultations and advance notice will allow them to better plan and adapt business operations accordingly.
Avoid U.S. government actions that target the Chinese people; there is little public support in the United States for limiting Chinese nationals from studying or working in the United States, and Chinese students and workers contribute significantly to the U.S. economy and U.S. companies.
Adopt an information strategy to better inform the U.S. public about the risks or problems associated with products from China.
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