If Trump tries to sleep porcelain, he goes to everything about it

Unlock the editor’s digestion free

FT editor Roula Khalaf, chooses his favorite stories in this weekly newsletter.

The writer is a professor at the Hong Kong University of Science and Technology and ‘New Chinese PlayBook: Author of Socialism and Capitalism’

Technological leaps rarely born in comfort. Conflict, competition and need in necessity. Artificial intelligence competition from nuclear energy to the space race and now the United States and China – innovation is highest. US President Donald Trump’s catastrophic tariff war can cause serious economic pain in China, but can ignite a technological increase, not by design.

Although China’s most emergency economic problems remain internally, 125 percent of US tariffs, actual stimulation, subsidy, stimulate the survival instinct and doubling the survival and double the technological scientist.

If Washington’s goal is to suppress China’s rise, everything is wrong.

Tariffs do not only change trade flows – they redirect resources and change industrial structures. The purpose of the Trump was to curb China’s technological progress, it will remain small to the United States to the United States, unlocking the country’s low margin production. It would encourage high-tech exports to China to make sure that the advanced components are in the stall.

But this is the opposite of what happened. Unfortunately, as the “Chinese Shock” offers the United States from low-level production, “Trump Shock” is trying to share resources to higher value and direct technologies competing in the United States.

Beijing draws the result: innovation and main technology control is the only sustainable protection against tariffs. Companies with special technology – such as Huawei and BYD – are more insulated than tariffs and supply chains. China provides a new technological supply chain model: regional production, technological sovereignty and global supply chain reserve.

Should never be technology and innovation center As in today’s national agenda today. This “AI +” strategy Aims to spread AI in all possible sectors. The creator of the low-precious AI model was born under the restriction. Now is placed in the world.

In 2019 a RMB200BN The Bottleneck Technologies Foundation was established in three years to provide 70 percent internal substitution in critical areas. China is built by a photonic quantum calculation, the opponent of the lower orbit satellite network Elon Musk’s Starlink and the foundation of commercial space stations. He targets the progress on ChipMming devices and lead the world to the factory’s robot.

If the Chinese high-level state led the presidency, tariff shock returns it to the economic basis. Trade War acts as a reset that once again confirms the importance of growth and competition. Support for the private sector shows signs of revival. Tax relief and work-friendly policy they return.

Technological restrictions often have undisputed results. Instead of stopping progress, they focus on direction. Take semiconductors: China consumes a third of global chips and once again trusts users. Sanctions did not reduce this request – they tried again. Now local companies such as SMIC reports record revenues and re-invest in R & D.

As stated in Chinese, good companies “do not lie flat” – they adapt. The first wave of Trump sanctions caused globalization. Chinese companies moved rapidly to transfer production, expand new markets and change work models. Shenzhen-LINAL Transsion is 51 percent of Africa’s smartphone market. Smartphone manufacturer Xiaomi covers 75 percent of its income from abroad.

Rising tariffs, as well as digital supply chains, service trade and cloud infrastructure – slide towards strong trends in China’s digital platforms, AI and e-commerce. Although there is still a production capacity, China is less than 6 percent of global service trade, wide room explode compared to goods.

History saw this dynamic before. Napoleon, British trade with the Cooker-Continental system, England, Asia, Africa and America, which are in England, industrialization and mechanization. There were negotiation costs and salary pressure, steam engine, textile mills and catalyst for sea power.

The United States can repeat this mistake. If America is a great goal to make it great again, Trump should not be afraid of a comfortable China; Should be afraid of a restriction.