Tipping the balance between global rivals | MIT News

John David Minnich was under the spell of political philosophy until he took a trip across a bridge in China. The political science doctoral student vividly recalls this life-changing 2009 trip, undertaken as part of a summer fellowship program.

“Driving from the airport, I was overwhelmed by my first glimpse of the Shanghai skyline, a scene of insane activity,” he says. “I realized that I was witnessing the future and that I would have to understand what was happening here to know where the world was going.” The experience was so powerful, adds Minnich, “that 15 years later, it still motivates me.”

In his nearly complete dissertation, Minnich explores how China’s strategic use of foreign investment and trade policy to generate large-scale transfers of foreign technology helped fuel that nation’s rapid economic rise.

“The United States and China are in the midst of a possible transition of power,” says Minnich. “I want to understand how old great powers fall and how new powers rise.”

Minnich’s studies shed light on the mechanics behind these tectonic shifts in global power.

“In the current era, rapid technological change, the globalization of production, capital flows and technology drive growth rates,” he says. “Policies to harness these forces, such as those pursued by China, are crucial in explaining how one country becomes a superpower while others fall behind.”

Technology transfer and trade war

In 2018, Trump administration policies that amounted to a new trade war with China fueled Minnich’s doctoral research. “This war caused a deterioration in US-China relations and a breakdown in communication, with life-and-death implications,” says Minnich. He was particularly interested in the punitive tariffs that the US government imposed on specific Chinese industries, justified primarily by what the administration called forced technology transfer and intellectual property theft.

“There was clearly an incredible process where China went from being technologically backward to becoming a technological powerhouse and surpassing us in many critical industries,” says Minnich. “There was no effort to go out and systematically document how China was using technology transfer policies strategically, so that’s what I set out to do.”

China has a well-established practice of requiring foreign companies doing business there to form joint ventures with domestic companies and share technology, says Minnich. But he wondered if there was any industry variation to this convention. So, in the first phase of his thesis research, he created a dataset showing “what policies were in place for a given industry, in a given year,” from hundreds of pages of Chinese central government policy documents. . This unique data set revealed some puzzling variations in policy application.

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Strong evidence of foreign technology transfer regulations appeared in a group of “objectively strategically important industries.” But in a strange twist, in the semiconductor industry, critical to China’s and the world’s economy, the same rules did not apply. The explanation for this policy exception, Minnich believes, stems from China’s position in global supply chains.

In those industries where China imports products and provides a domestic consumer base, it has the most influence over foreign companies and vigorously pursues technology extraction policies. Some examples Minnich cites: civil aircraft, automobiles, high-speed trains, and wind turbine manufacturing. But in industries where most of what China imports is simply processed locally for re-export to overseas consumer markets, such as semiconductors, until recently it has had less influence. “China relies on foreign companies, which not only directly employ millions of people in China, but also act as gatekeepers to international trade,” he says.

From revolutionary history to politics

Minnich’s trip to China began, unexpectedly, with his involvement in experimental theater. Raised in Austin, Texas, by politically progressive parents, he discovered a penchant for the stage in fifth grade; in high school he starred in regional productions. Inspired by the essays of playwright Bertholt Brecht, Minnich immersed himself in political philosophy. This led to a summer program, and at Cornell University, an undergraduate focus on critical theory and revolutionary history.

“Then with the 2008 Beijing Olympics, China was on the map,” he recalls. “If you were seriously interested in the global history of revolutions, you had to look at the Chinese revolution.” He crossed the bridge to China studies. “I spent two years acquiring powerful theoretical tools to understand the past, but I realized that what I was witnessing would transform the way the world works.”

Minnich left Cornell with a bachelor’s degree in history and Asian studies, then spent two years in China immersing himself in Mandarin. Upon his return, he worked as an Asia-Pacific analyst for Stratfor, a geopolitical risk analysis platform. “My main responsibility was Chinese political economy and US-China relations,” she says. “It enabled me to make general theories about how states behave and develop a deep understanding of different industries.”

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Certain that he wanted to become a Chinese scholar, Minnich headed to MIT. “Since that moment in Shanghai 14 years ago, only one thing has driven me: the reasons behind China’s rise and its possible consequences.”

Research as a resource

With advisers M. Taylor Fravel, In Song Kim, Richard Samuels, and Jonathan Kirshner, Minnich developed an ambitious research program that challenges conventional understanding of the ways states advance their political goals through trade policy. Many researchers assign an important role to interest groups, he says. “But you can’t understand China’s trade policy without considering the Chinese Communist Party’s strategic goals to accelerate the country’s rise,” he says.

Minnich thinks his findings will be useful. “Greater understanding of where China does or does not apply trade rules and industrial policies will leave policymakers better equipped to develop effective responses,” he says. Minnich adds that he has found evidence that developing countries are beginning to employ tactics pioneered by China to secure technology transfers.

He also wants to sound an alarm about the long-term consequences of the US-China trade war. “It’s eroding cultural and educational exchange between countries, and it’s affecting the US business community’s view of China in a potentially dangerous way,” he says.

Expanding on her thesis research, Minnich is building a comprehensive database on China’s industrial and technology policies from 1978 to the present, which she will make publicly available upon completion. Funded by the National Science Foundation and the American Political Science Association, the database will include more than 60,000 Chinese-language policy documents. “I’m creating this so that future scholars in China can investigate a whole host of questions,” she says.

Minnich’s next task is to turn his thesis into a book on how China regulates inflows of goods and capital to secure foreign technology transfers. At the same time, he is also planning his next project, which will investigate China’s evolving efforts to shape its strategic environment. “Ultimately, this will contribute to a much larger work: an overview of the entire process of China’s rise,” says Minnich.

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