US-China technology FDI crashes but decoupling is ‘not imminent’
- Report finds ‘multiple choke points’ in supply chains will maintain a continuing global co-dependency for some time to come
- Meanwhile Washington continues to build a coalition against China which, if successful, could pose a greater challenge for Beijing
And, if successful, the United States’ push to build up a supply chain coalition against China could pose a greater challenge to Beijing which has invested heavily in technology and supply chain independence, Boston-headquartered consultancy Bain & Company said in its latest technology report 2021, released on Monday.
Next Wednesday, US Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo, and trade representative Katherine Tai will host European Commission vice-presidents Margrethe Vestager and Valdis Dombrovskis at the inaugural US-EU Trade and Technology Council meeting in Pittsburgh.
The two sides are expected to announce a deal to share information and data relating to foreign takeovers and cooperate on assessing investments in strategic assets, in another veiled swipe at China.
Overall, the FDI between the US and China fell by 75 per cent, from US$62 billion in 2016 to US$16 billion last year, the report said. It was a stark contrast with their own massive domestic investments in technology.
In June, the US Senate approved the US$250 billion Innovation and Competition Act, which will provide US$52 billion for domestic semiconductor research and manufacturing, a 30 per cent funding boost for the National Science Foundation, and US$29 billion to fund a new applied sciences directorate.