The focus of the Sino-US trade war is actually not on trade. And the competition for this focus directly determines whether China can become big and strong.
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The Sino-US trade war is the world's top priority in recent years, which has not only profoundly changed the relationship between China and the United States, but also affected the global economic order and industrial pattern.
On the surface, the reason and focus of the Sino-US trade war is China's long-term huge trade surplus with the United States, and the transfer of some U.S. industries to China, which has reduced U.S. jobs. But this is only a superficial phenomenon. The areas of real competition between China and the United States are in other ways.
The outcome of this "other" competition will determine whether China will be "big but not strong" or "big and strong" in the future. In fact, the United States has grown from a great power to a great power precisely because of continuous progress in this field.
This "other" is technology. The Sino-US trade war is actually a Sino-US science and technology war.
02
In 1894, the size and industrial capacity of the United States surpassed that of the United Kingdom to become the world's largest economic power. But at this time, the United States was far from being the world's number one power. It is generally believed that the United States became the world's number one power due to two world wars. But in fact, in the 20th century, the United States not only won two world wars, but also launched a sustained impact on science and technology. The latter is the key to the United States becoming "big and strong."
The United States in the early 20th century was very similar to China today — "Made in america" everywhere in the world. Telephones, phonographs, trams, cars, typewriters, elevators, and other new things are basically "Made in the USA." The industrial production capacity of the United States is the first in the world.
But at this time, the scientific and technological power of the United States is very weak, probably equivalent to small countries such as Belgium and Switzerland. At that time, the world's science and technology centers were Germany and France. In the eyes of Einstein and Marie Curie, American technology is really insignificant and lackluster.
Similar to the situation in China now, at that time, the United States had a large scale of production and a strong production capacity, but many key materials, components, and technologies depended on other countries. After the outbreak of World War I, Germany became an enemy of the United States, but the United States found that the United States was very dependent on Germany in many key materials and components.
For example, high-precision optical lenses, Germany technology is far ahead, the United States needs to import a large number of imports from Germany. Another important basic chemical raw material, nitric acid, is also very dependent on Germany in the United States. Germany's chemical industry is very strong. "The chemical industry in Germany is one of the traditional forces in Europe." The United States is far from it.
In order to get rid of the dependence on German nitric acid, the United States set up a special nitric acid supply committee, and in 1917, the construction of four nitric acid production plants was urgently started. However, due to the weak chemical technology in the United States, until the end of the First World War, these four nitric acid plants could not be completed and put into operation.
Realizing that its own scientific and technological strength was insufficient, the US government was determined to catch up. In 1916, the United States established the National Research Council to integrate resources from the national level, formulate strategies, and begin to catch up with the world's advanced in the field of science and technology.
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With this organizational preparation, after World War II, the United States seized the opportunity to "divide" German scientific and technological achievements in time. In terms of talent and technology, the United States has systematically "harvested" a large number of German scientific and technological resources, replacing Europe and becoming the world's scientific research center.
After the war, relying on the gathered talents and technological advantages, the United States continued to increase investment in science and technology. In 1960, the R&D investment of the United States accounted for nearly 70% of the world's scientific and technological research and development investment at that time. More than half of it is military scientific research financially supported by the U.S. government. Under this huge investment, the United States has an overwhelming advantage in the field of science and technology, far ahead of other countries.
Especially in the very important fields of semiconductors, the Internet, aerospace and other fields, the investment and promotion of the government and the military play a great role. These basic research investments are difficult to rely on self-financing enterprises to do. In these respects, the role of the state, regardless of short-term profit and loss, is irreplaceable.
The continuous investment of the United States in science and technology in the 20th century not only spawned a large number of important scientific achievements, but more importantly, formed a strong scientific atmosphere in American society.
Affected by this strong scientific atmosphere, many people in the United States have begun to explore the field of scientific research and innovation. At that time, it could be said that it was an era of "innovation and entrepreneurship". The well-known technology giants such as HP, Apple, and Qualcomm all started their businesses from the garage of a family in a small town.
On the surface, the entrepreneurship of these people is that their talents are playing a role, but in fact, the reason why they can start a successful business and create a great science and technology enterprise is that the overall scientific atmosphere of American society and the all-round support of the government are greater. The government has invested heavily in research and development, replacing enterprises with the most risky and difficult to recover the basic part of investment. On this basis, enterprises continue to carry out practical research and development, develop marketable products, and win huge profits in the market. This is not only a virtuous circle of the industry, but also a model for successful cooperation between government enterprises.
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"The government sets the stage, and the enterprises sing." That is, the government is leading, regardless of short-term profit and loss, and making a lot of investment at the basic level. On this basis, enterprises in accordance with the law of the market, follow-up practical research and development. This model is the secret of the "big and strong" United States.
The Americans themselves are well aware of this secret, so if other countries are only economic development, and do not form this good pattern of "the government sets up the stage, the enterprise sings", the Americans are not only not nervous, but also very kind and friendly, encouraging these countries to work hard at the low end to earn hard-earned money.
However, if we see that there is a situation in which "the government sets up the stage and the enterprises sing", and the scientific and technological strength of that country grows rapidly, the Americans will immediately become nervous, and even become vicious, and will not hesitate to lift the table and suppress the blows by various means.
Japan is America's most loyal and docile ally. But even this tame little brother, when Japan's scientific and technological power developed rapidly, was ruthlessly suppressed by the United States. In the 1980s, American society generally had a strong hostility toward Japan, even greater than it was during the war. Japanese cars and Japanese appliances were once boycotted in the United States. The US government has also directly gone down and used various means to suppress Japanese enterprises.
Later, through computer and Internet technology, the United States once again had an overwhelming advantage in science and technology, and the United States once again became a smiling and kind big brother. The image of the Japanese in the eyes of Americans is also much more cute.
Understanding this inherent psychology of Americans, and then looking at the Sino-US trade war, many phenomena are very clear.
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In terms of "the government sets up the stage and the enterprises sing", we in China not only do it, but also do it a lot. Its scale is far greater than that of Japan, but even more than that of the United States.
In the first three decades of New China, although the overall level of economic development was not high, China became the only country in the developing world to establish a complete industrial system and a talent education system. This means that China is already ready for the most important preparation for economic take-off.
In the process of reform and opening up, China has successfully explored the development model of "the government sets up a stage and the enterprise sings". This is not only a natural extension of the previous planned economy, but also one of the connotations of China's long historical tradition. In China, the government has always played a central role in society. This historical tradition can naturally be expanded into a development model of "the government sets up the stage and the enterprise sings the opera".
Therefore, China has basically reproduced the history of the United States in the past when the whole country made efforts and pursued it in the field of science and technology, and it is on a larger scale and intensity. At first, China seemed gentle and honest, just burying its head in the low end to make some hard money. Americans see this and are relieved to move a lot of industries to China.
What Americans did not expect was that China was no other kind of developing country that did not have ambitions and was small and prosperous. Instead, China may be the most ambitious and undeserving country in the world. Through the model of "the government sets up the stage and the enterprise sings", China continues to climb in science and technology. After entering the 21st century, the climbing speed has been further accelerated. In many areas of technology, it has caught up.
Around 2010, Americans felt China's ferocious pursuit of science and technology and the "threat" to them. This year, the American Chamber of Commerce issued a report to make an in-depth analysis of the Chinese government's medium- and long-term development plan, clearly pointing out that the rapid development of China's technology industry has become an irreconcilable fundamental contradiction between China and the United States.
A few years later, the Office of the United States Trade Representative released the "301 Investigation Report", which once again highlighted the huge threat to the United States posed by "independent innovation" in China's scientific and technological field. This report also attaches great importance to the outline of the mainland's medium- and long-term science and technology development plan, and believes that it is necessary to try to undermine and block China's development plan.
It is worth noting that the report released by the Office of the Trade Representative actually does not mention the trade deficit at all, and pays great attention to China's government planning in the field of science and technology. It can be seen that americans are very clear about what is really powerful and really important.
06
Realistically speaking, although the US economy has seen a serious derealization of the us economy in recent decades, so far, the strength of the United States in high-end, mid-to-high-end industries is still very strong, and its share in the world has not decreased, but has risen steadily. The United States still occupies the commanding heights of many industries.
The development of China's industry and manufacturing industry, in many cases, has taken away the share of Europe and Japan. The "basic disk" that really began to threaten the United States was something that happened in recent years. This is the fundamental reason and background of the outbreak of the Sino-US trade war.
Now, for americans, it can be said that it is time for "Armageddon". The situation is much more serious than the aggressiveness of the Japanese in the 1980s. China has launched an impact on the United States in almost all areas of science and technology. Moreover, China's basic conditions – talent, its own market, its industrial system, its governance, and so on – are superior to those of the United States. In the face of China, the United States has encountered unprecedented and severe challenges.
On the other hand, due to various reasons, the US government's investment in scientific research has been greatly reduced. The proportion of U.S. R&D investment in the world has dropped from nearly 70% at its peak to about 30%. The proportion of government investment in scientific and technological research and development has also dropped from two-thirds to one-quarter. The most important and core investment in national defense research even fell to one-tenth of what it was in 1960.
That is to say, the successful model that once brought the United States to the top of the world's science and technology is now largely being abandoned by the Americans themselves. At this time, seeing that our Chinese are vigorously using this successful model, how can they not be anxious?
Therefore, we have seen that the United States has even used a lot of "three abuses" tactics in the trade war, such as forcibly cutting off Huawei's opportunity to obtain chips from all over the world. This is almost a means that can only be used against enemy countries in wartime, and the United States actually uses them in peacetime. Such unscrupulous means can only show that the Americans are really anxious.
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Americans know that if China catches up in the mid-to-high-end technology industry, Americans will inevitably lose a lot of corporate profits and high-quality jobs. Americans don't care if they lose those businesses and jobs on the assembly line. But if you lose these mid-to-high-end high-quality companies and jobs, it is a huge loss that the United States cannot afford, and Americans are likely to be unable to continue their superior "American way of life".
For us in China, this is also the time for the "Armageddon". From an economic point of view, it is only a matter of time before China catches up in the field of science and technology. We already have all kinds of conditions, especially the model of "the government sets up the stage and the enterprise sings the opera", which we in China are the best at. As long as time passes, even if it cannot catch up in an all-round way, there is no suspense that China will sit on an equal footing with the United States in the high-tech field.
The problem now is focused on politics. It depends on who can laugh to the end in the face-to-face contest between China and the United States. What the United States has to do is to sabotage China's catch-up in the high-tech field by all means, especially to undermine China's model of "the government setting up a stage and enterprises singing." What we in China have to do is to firmly continue on the road of success that has been effective. "No one can stop the Chinese people from running towards a better life."
The curtain has been lifted on the drama of history.
(End)
"Industrial Power: The Road to Self-Improvement in China's Manufacturing", Chinese Min University Press, April 2022.
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