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Kenneth Boutin

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Kenneth Boutin

Economic security requirements have played a crucial role in shaping the Sino-American economic relationship. Though American and Chinese authorities face broadly comparable problems, they are confronted by dissimilar policy challenges which they approach in distinct terms. Heightened attention to the economic requirements of national security, particularly in the United States, is generating policy requirements that threaten the basis for Sino-American industrial collaboration and integration. American concerns are exacerbated by increasing concern over China’s economic power and by the convergence of the economic trajectories of China and the United States. Heightened Chinese concern is driven less by the perception that the United States poses a greater economic security threat than in the past than growing concern over its structural role and its recent policy initiatives.

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Kenneth Boutin

It is important to distinguish between national and comprehensive economic security. National economic security concerns the requirements of national security, while comprehensive economic security concerns requirements other than those of national security. While national and comprehensive economic security share some common ground, they differ in crucial respects. They differ in terms of referent objects of security, the nature of security threats, critical issues, and general policy imperatives. The relationship between national and comprehensive economic security is complex. Political authorities are presented with difficult choices where they seek to pursue national and comprehensive economic security in tandem. While national economic security requirements often take precedence, the requirements of comprehensive economic security can be sufficiently important for political authorities to promote this even where there us a clash with national economic security.

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Kenneth Boutin

China’s economic security landscape is complex and dynamic. Its complexity is the product of China’s past relations with other states and its unique economic security requirements, which encompass national and comprehensive economic security. China’s economic reform programme is producing a policy environment that is much more complex than often is appreciated. The importance attached to comprehensive economic security underlies its economic reform programme and its ‘opening’ to the global economy. The United States figures prominently in Chinese engagement if the global economy. China’s economic reforms and opening, which have deepened over time, have increased its vulnerability to exogenous economic and political trends and developments. Concern over vulnerability is growing as the American government pursues its economic security agenda.

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Kenneth Boutin

The economic security landscape of the United States greatly complicates the development and implementation of economic security policy. The extent of policy decentralization and the independence of American industry both contribute to this. American economic security requirements encompass national and comprehensive economic security, but policy traditionally has focused on the former. This focus was facilitated by the expectation that the private sector would provide the economic success crucial to comprehensive economic security. Attention to the comprehensive economic security requirements increased following the Cold War. This policy space is contracting as concern over national security grows. Heightened attention to national economic security requirements is driving increasing intervention in industrial processes. This is tempered, however, by the requirements of comprehensive economic security and by the importance of economic engagement of China.

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Kenneth Boutin

Sino-American production relations are well developed and represent the least problematic facet of their industrial relationship from a security perspective. Relations between American and Chinese high-technology industry have been mutually beneficial and contribute to comprehensive economic security in both states. Growing American concern over the extent to which production relations threaten the American defence-industrial base are driving efforts to minimize their impact in this respect. The American government seeks to limit the extent to which American high-technology industry relies on production inputs from China. This includes components, sub-components, and raw materials. These efforts are tempered by the requirements of comprehensive economic security. The Chinese government recognizes the importance of production relations with American industry, particularly in terms of comprehensive economic security, and strives to maintain the established production relationship.

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Kenneth Boutin

Sino-American technology ties are particularly complex. Technology ties are more sensitive than production relations from an American perspective due to implications for American and Chinese defence capabilities. The United States seeks to limit the extent to which technological diffusion to China contributes to the capacity of Chinese industry to develop and produce advanced armaments. American controls on the transfer of dual use technologies to China are strengthened, but the application of technology controls is tempered by the requirements of comprehensive economic security. American authorities set the bar for technology controls much higher than during the Cold War. American comprehensive economic security concerns are driving growing pressure on the Chinese government to protect the intellectual property of American firms. The government of China focuses on maintaining the relatively open environment for technological diffusion.

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Kenneth Boutin

Sino-American structural emerged relatively recently and is developing more slowly than the other facets of the industrial relationship but has far-reaching implications. Structural integration is transforming the basis for production relations and technology ties. Structural integration is generating considerable concern in both the United States and China, but in distinct terms. American concern centres around the implications of this for the national defence-industrial base. The American response is to seek to limit mergers and acquisitions of American high-technology firms by Chinese industry. American authorities also are promoting structural transformation within China in the interest of comprehensive economic security. The Chinese government strives to retain as much scope for Chinese industry to invest in established American high-technology firms while limiting the potential of structural reform within China to underline the integrity of the national defence-industrial base.

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Kenneth Boutin

The common ground of economic security that has provided the foundation for Sino-American industrial ties is eroding. Growing concern over national economic security encourages state intervention in industrial processes in the interest of national economic security. This trend complicates the pursuit of comprehensive economic security in both the United States in China, though the continuing importance of comprehensive economic security tempers the application of policy measures, particularly in the United States. Policy developments and trends in both states suggest that the common ground will erode further. Under the presidency of Donald Trump, the American policy position on China has hardened, while Chinese policy under President Xi Jinping is increasingly assertive. American and Chinese authorities will find it increasingly difficult to balance the requirements of national and comprehensive economic security as they seek to manage their industrial relationship.

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Kenneth Boutin

China and the United States have reached a crossroads where their economic relationship is concerned, as the shared interest in economic prosperity and complementary economic strengths that provide the common ground of industrial collaboration are threatened by increasing attention to economic facets of national security. This trend is encouraging policies which potentially undermine the basis of Sino-American industrial integration. This book explores the basis, nature and impact of evolving economic security agendas in the United States and China.