It’s a good question, and one has to wonder why issues such as ownership requirements, IP transfer, IP theft and market access have never been made an issue of

It’s a good question, and one has to wonder why issues such as ownership requirements, IP transfer, IP theft and market access have never been made an issue of until now. The answer is that American corporations have benefited immensely from doing business in China over the last 30 years, regardless of these issues. It cannot be denied that American corporations are some of the largest and most profitable businesses this planet has ever seen, much of which can be traced back to its outsourcing of labor/manufacturing to China. Anything that even minutely threatens to disrupt these absurd profits is perceived as an existential threat. This white paper [1] from a large private equity / investment banking firm can at least partially provide a glimpse into what is going on right now. The current situation has its roots in the financial crisis of 08-09, the repercussions of which nearly brought China to its knees. The key takeaways are that China’s reliance on global trade has been declining consistently since the financial crisis. The GFC made them realize the systemic risk posed by the reliance on external demand and ever since then, the central government has made a conscious decision to shift towards insourcing goods and services. Pre-2007, there existed a symbiotic relationship between China and the US whereby China exported goods to America in return for US dollars, which it then in turn used to buy hundreds of billions of dollars worth of US Bonds. It was a win-win situation: China benefits by profiting off of exports, America benefits with cheap goods, access to cheap and highly available credit and a very strong dollar. Now that China is focused on recycling surpluses into its own economy (for example, by moving up the supply chain into higher value-added exports previously dominated by American corporations), this symbiotic relationship is being tested. The fact is, the trade deficit (that has been characterized by Trump as "stealing" from America, a laughable notion), actually shrinks to almost nothing when adjusted for services and goods manufactured and sold by US firms in China [1, ex.16]. This is comparing four categories of goods and services exchanged between the US and China (1: services sold through subsidiaries, 2: services imports, 3: goods through subsidiaries and 4: goods through trade), which is a much more complete and honest comparison than simply focusing on goods sold through trade alone. When adjusted for U.S sales of goods and services within China, the trade deficit actually amounts to a US _surplus_ of something in the ballpark 20B a year [1, ex.17]. The problem is, this headline is not nearly as polarizing as the headline “China has taken advantage of the United States and cheated the American people for far too long”. It also shifts the blame for the current wealth disparity in America from where it belongs (American corporate greed) squarely onto the shoulders of China, the convenient scapegoat and whipping boy du jour. All this is not to say China is without fault and completely innocent of certain accusations. There are many other factors also involved. However, I believe what I've mentioned above can explain the lion's share of it. [1] https://www.kkr.com/sites/default/files/KKR_White_Paper_51-1902.pdf https://www.kkr.com/sites/default/files/KKR_White_Paper_51-1...