Why “Made in China” Is Good News for the US

US trade with and investment in China continue to rise, along with the American trade deficit. One of the few areas in which the US still enjoys a trade surplus with China is the microchip industry – traditionally a Silicon Valley specialty. However, China, intent on catching up, is training engineers and providing incentives to foreign investors in hopes of developing a strong microchip industry. With this development and other signs that the Middle Kingdom is attracting American high-tech firms, US government officials and legislators worry that their competitive edge in advanced weaponry may also be threatened. Congress has passed legislation aimed at limiting Chinese imports and restricting the outflow of American venture capital. Instead of protectionism, writes Andrew Leonard, the US government should look beyond the microchip industry and push the boundaries of innovation in other areas. Instead of viewing its trade relationship with China as a zero-sum game, Leonard concludes, the US should welcome the emergence of a new market and a new partner, while simultaneously developing potential growth sectors. – YaleGlobal