By Allawi Ssemanda
This week, U.S President Joe Biden signed an executive order banning the U.S from investing in what the U.S describes as sensitive technology in People’s Republic of China. The order also requires that U.S government be notified of any funding in other sectors that would involve dealing with Chinese firms.
In a letter addressed to the U.S Congress, the U.S ruler argued that his executive order meant declaring what he called a national emergency, purposely to deal with the so-called threat of advancement by countries such as China in what Biden called “in sensitive technologies and products critical to the military, intelligence, surveillance, or cyber-enabled capabilities”.
Important to note is that Biden’s order empowers the U.S treasury to either ban or restrict U.S firms from investing in Chinese firms specifically in three technology related sectors namely;
quantum information technologies, certain artificial intelligence systems and semiconductors and microelectronics.
While the Biden administration defends the decision with claims that the “measure” arise from the need to protect the so-called national security goals, but not economic interests, if critically analysed, this order is a result of U.S’ desire to contain China’s rise. Put differently, the U.S suffers from libido dominandi– the desire to dominate others and in this case, the U.S’ primary goal is to protect its shrinking technology hegemony.
Aware that the U.S has continuously limited the export of what Washington calls exportation of advanced computer chips to China while hiding under the guise of the so-called national security concerns and claiming that the U.S is not after decoupling from China but rather the so-called de-risking, facts on the ground clearly show that it is U.S’ geopolitical gimmicks and double standards. It is clear that the U.S fears fair competition and hence, using national security claims to target Chinese firms. This explains why despite being vocal against former U.S ruler, Donald Trump’s trade tariffs against Chinese products which then Candidate Biden said were hurting U.S economy, instead of removing them, the Biden administration has continuously sought to limit investments in China and expanded Trump era tariffs and on many occasions rallied U.S allies especially in G7 to follow the suit.
While war hawkers in Washington are praising Biden for this order with Senate Democratic Leader Chuck Schumer claiming that “for too long, American money has helped fuel the Chinese military’s rise. Today the United States is taking a strategic first step to ensure American investment does not go to fund Chinese military advancement,” it should be recalled that such selfish measures will not only hurt China but targeting the world’s second largest economy means the effects will be felt by arguably entire world. This is because, decoupling from China in all ways will result into disrupting global supply chain and should be condemned, and Washington called to respect fair trade which World Trade Organisation stands for.
As Chinese foreign ministry indicated, U.S is hiding behind national security the “true purpose (of this order) is to deprive China of its development rights and maintain its own hegemony.”
This is true considering the fact that, for decades, the U.S has been targeting foreign companies involved in trade Washington deem against their interests using different excuses. For example, in 2020, a study by the Cato Institute, an American libertarian think tank found that the U.S used long-arm jurisdiction in violations of World Trade Organisation (WTO). The study entitled “Unfair Trade or Unfair Protection? The Evolution and Abuse of Section 301” argues that section 301 of long-arm jurisdiction “grants the executive branch far too much discretion in defining an actionable foreign trade practice” which may be exploited for political reasons – it allows American President to safeguard America’s trade interests by remedying any “act, policy, or practice of a foreign country [that] is unreasonable or discriminatory and burdens or restricts United States commerce.” Important to note is that the same law defines “unreasonable” in very ambiguous manner simply calling it “otherwise unfair and inequitable.”
All the above puts the U.S at advantage over other countries’ companies, potentially making the rest inevitable victims should American politician(s) feel that a foreign company is putting a stiff competition against American(s), such foreign companies can easily be sanctioned by America and tactfully kicked out of business.
As Alan Sykes, a Law professor at Stanford University argued, Politicians in the U.S always hide under the so-called national interest to facilitate political opportunism giving the U.S chance to freely target other competing countries.
In conclusion, considering the negative effects of such actions that come with U.S’ fear of competition which is inevitable with free trade, the world should be honest with the U.S and ask Washington to allow free and fair market to avoid unnecessary disruptions to global supply chain at the time the world is recovering from shock caused by the Covid-19 pandemic.
Allawi Ssemanda, a Senior Research Fellow at the Afro-Diplomacy Analytics.
