At a Glance
- "Hillbilly Elegy" author discusses economic fallout of China's tech policy
- Eurasia Group CEO says U.S. needs to view tech as strategically important
There’s little question about technology’s expanding role in politics. The 2016 U.S. election was practically waged on social media, with Twitter and Facebook at times becoming a part of the news cycle nearly as much as the candidates themselves.
But what that election revealed — along with Brexit and other votes across the globe — was also a leaning by one side of the political spectrum towards economic nationalism. In another way, technology could be feeding the cultural and economic factors that led to that nationalism, says best-selling author J.D. Vance. Vance says a transfer of wealth from the American middle class to the Chinese middle class, largely brought on by China’s tech transfer policy is “a really significant problem,” adding “That problem will manifest itself in political action. And that political action will mean more economic nationalism.”
Under the technology transfer policy, China often forces American businesses who wish to do business there to transfer their technology or open joint ventures to help aid in the creation of Chinese home-grown tech companies.
Political scientist and author Ian Bremmer, who joined Vance for a discussion on the inequality gap in America at the Global Financial Leadership Conference, agrees. Bremmer says large tech companies like Google, Amazon, Apple and Facebook are “fundamentally more important to American national security in the next 10 years than Lockheed ever was,” recalling how the United States government considered Lockheed Martin strategically important during the cold war. Bremmer now says he is “deeply skeptical” that the U.S. government today will take the same approach to tech companies.
The fear is that U.S. firms who help develop critical defense and military systems may want to do business in China and hand over their technology to do so. The Trump administration has opened a probe into the policy, and what it might mean for U.S. businesses.
In previous remarks at the conference, Bremmer also cited China’s approach to technology as a difference between how China and the U.S. look at technology and politics. Using the example of smartphones, he highlighted that in the U.S. mobile phone carriers are concerned with reaching consumers, while in China, government has control over phone access, and the long term goal may be political. “They want you to be a consumer, but they’re more interested in you being an aligned citizen. It’s political stability,” he said.
Vance believes technology and China’s relationship with it is only one factor leading the way for American politics in the years ahead, adding that there are roads to a more stable political environment through appropriate tax, immigration or other reform, though those appear far off.
“The broad trend in American politics is that we’ll move toward economic nationalism.”