‘Vast’ U.S. business enlargement in China may well threaten U.S. tech leadership: report – Reuters

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WASHINGTON (Reuters) – A “vast expansion” in U.S. multinational small business action in China considering the fact that 2000 may threaten American industrial competitiveness and extended-term tech leadership, a new report by a congressional U.S.-China advisory fee observed on Wednesday.

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The U.S.-China Economic and Protection Evaluation Commission warned that rapid moves by U.S. corporations absent from manufacturing in China and into higher-price pursuits this sort of as study and improvement could be “unwittingly enabling China to attain its industrial coverage goals.”

The commission stated its evaluation of almost two decades of U.S. economic and trade data confirmed a 15-fold enhance in U.S. professional property in China. U.S. firms now hire 1.7 million men and women in China, an raise of just about 600% given that 2000, when U.S. corporations employed just 252,000 people there.

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It reported U.S. corporations experienced leveraged China’s inexpensive labor power, huge economies of scale, minimal transportation expenditures, and focus of world provide chains, with much of the exercise centered on conference demand from China’s increasing customer course.

U.S. manufacturing in China was largely targeted on creation of personal computers, digital products and solutions and, ever more, chemicals, but there was also greater expenditure in research and improvement, normally at the insistence of China.

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“These industries … might indirectly erode the United States’ domestic industrial competitiveness and technological management relative to China,” it mentioned, urging Congress to take measures to protect U.S. revolutionary potential and leadership.

The report arrives amid soaring tensions involving the United States and China, the world’s two largest economies, even with the signing of a Phase one U.S.-China trade settlement in January.

The Trump administration has limited visas and ended exports of defense products in response to a new national safety law cracking down on Hong Kong’s independence, and on Wednesday warned U.S. corporations about the risks they encounter from sustaining offer chains affiliated with human rights abuses in China’s western Xinjiang province.

Reporting by Andrea Shalal and David Lawder Editing by Chizu Nomiyama and Jonathan Oatis

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