Western countries frequently complain that Chinese companies do not innovate but rather copy Western ideas and technology, so how will they react when Chinese companies actually innovate?
While Chinese EV makers “plagiarizing” Western designers may lead many to believe that it is only the Chinese who are stealing product ideas and intellectual property, in the EV world we are actually starting to see the Chinese innovating (out of competitive necessity) and Western EV makers starting to “borrow” outdated Chinese designs.
I think the real reason for the tariffs is that the US EV industry, and the Japanese and Korean automakers with manufacturing bases in the US, don’t offer very competitive products in the market. Therefore, the United States has made a strategic decision to prioritize building a competitive EV industry at the expense of American consumers in the short term..
China’s rapid growth in renewable energy, especially solar power, has actually put it on track to meet these targets for the first time, surprising experts around the world, as Ember reports.
The IEA updates its forecasts every year, and in 2021, 2022, 2023 and the IEA’s accelerated case scenario, they predicted annual capacity additions of 218GW, 257GW and 406GW respectively in 2023. A recent update from China puts the actual capacity additions in 2023 at 444GW, according to BNEF. To understand the scale of capacity additions in 2023, it’s not until 2022 that annual solar capacity additions surpassed 200GW, and 2022 was itself a record year.
China’s rapid solar growth has shattered all previous experience with renewable energy deployment, and its green power drive has put it on the brink of achieving net zero. We are witnessing the most rapid deployment of a significant energy technology in history.
Has China been praised for this innovation? Quite the opposite.
The reaction of Western politicians? Protectionism. Of course, they have complex motives: they need coalitions to sustain the Energiewende; they are worried about the Communist regime in China; they want to move away from an extreme reliance on imported energy sources (of course, in the renewables sector, it is not energy that is imported, but capital equipment). But the more fundamental question is simply this: are Western governments and societies willing to prioritise the Energiewende when it is not their drama or success story? Or will other interests take precedence if the PV panels or electric cars are made in China?
One of the most striking examples of Chinese innovation is the social media site TikTok. How did the US government respond? By banning the app. We are also doing everything in our power to stifle innovation in China’s computer chip industry.
There seems to be a certain ambivalence in the Western attitude toward China. We don’t want China to become a hugely successful technological powerhouse, because that would threaten our national security. We don’t want China to become an uninnovative middle-income country that just borrows technology from the West, because that would threaten jobs in our stagnant industries. We seemed most comfortable with China when it was a very inefficient low-income country, isolated from the world, with its people living on the brink of starvation — North Korea, with a billion people. China is unlikely to live up to our hopes, and it shouldn’t.
The final part of the “we were stolen from” argument is the allegation that Chinese companies “stole” the intellectual property of their U.S. partners in joint ventures. China’s power at the negotiating table is undeniable. China is aggressively using its bargaining power to trade learnings for access to the Chinese market. But the U.S. companies that claim to be victims freely enter these agreements and rarely incur a net loss. These U.S. companies generate trillions of dollars in sales and reap huge profits. This is a testament to their ability to navigate a competitive environment.
Hawks overestimate the value of the intellectual property that could actually be stolen. Hawks know nothing about the technologies they most fear, so they stick to the blueprint and don’t value the craftsmanship required to bring it to fruition. After all, the secrets of technological innovation are not hidden. Instructions on how to make a microchip have been available in university libraries for almost 70 years, but making a microchip requires more than just following the instructions.
