Export controls and the rise of US-China techno-nationalism · TechNode

Even as the world is in the grip of the coronavirus pandemic, the US and China are locked in an escalating race to control the technologies of the future. This new environment has inspired a philosophy I have described as “techno-nationalism”: mercantilist-like policies, such as export controls, that link a nation’s tech innovation and enterprises directly to its economic prosperity, national security, and social stability.

While governments are trying to lock down technology, tech multinationals are looking for ways to sidestep onerous export controls and restrictions to continue selling to key customers such as Huawei. As I document in a recent report published by the Hinrich Foundation, businesses are doing this by exploiting legal loopholes and restructuring global supply chains.

Alex Capri is Visiting Senior Fellow at the National University of Singapore, in the Business School. He writes extensively on trade, technology, and geopolitics.

Going forward, loopholes in existing export controls could prompt stricter measures from Washington, which will come at higher costs for tech companies and continue to disrupt global value chains (GVCs).

For US and other foreign companies, this means two things: first, the US government could close export control loopholes, in particular the so-called de minimis rule; second, the Feds are likely to increase pressure on key suppliers and governments to stop selling controlled technologies to Chinese companies.

Export controls’ impact on value chains

An export control is a regulation put in place to protect national security, promote foreign or domestic policy, and, in some instances, control the export of items in short supply. By itself, an export control is not an export ban, and does not mean that the product in question can never be exported.

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Written by Aakash Malu


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