US Must Engage with China’s Competitive Hi-Tech Firms: Trade Group Leader

 

computer chip production machine. Semiconductor

The head of the US-China Business Council, Craig Allen, has urged that US companies and other multinational firms must engage with China's rapidly growing and "wickedly competitive" tech companies to stay globally competitive. Speaking ahead of his departure from the non-profit industry association, Allen highlighted the challenges that multinational firms face as the US and China continue to tighten trade restrictions and limit technological engagement.

According to Allen, Chinese firms, especially private companies, are becoming increasingly competitive as they adapt to slower domestic growth and market oversupply. His warning follows recent export restrictions announced by the Biden administration, including new measures targeting semiconductor development technologies.

Allen emphasized that US export controls and China’s countermeasures were pushing Chinese companies to seek new partnerships, often with other Chinese firms, or with European, Japanese, or Korean suppliers. This shift, he argued, has led to the formation of a more bifurcated global tech ecosystem, with both countries growing more insular in their technological development.

The recent US export controls, which prevent foreign suppliers from providing essential chipmaking equipment and software to China, are part of ongoing efforts to limit Chinese access to critical technologies. In response, Beijing has introduced its own measures, including bans on dual-use products being sold to US military end-users.

Allen also warned that these escalating restrictions were affecting access to valuable tech talent, which is crucial for maintaining global competitiveness. US companies are increasingly finding it difficult to maintain an R&D presence in China, which remains a key hub for technological innovation. Allen stressed that access to Chinese talent is essential for staying competitive in the global market, and that the current regulatory environment is creating significant opportunity costs for both US and Chinese companies.

As the trade relationship between the two largest economies continues to grow more complex, Allen's message serves as a cautionary reminder of the need for careful strategic engagement in an increasingly fragmented global tech landscape.