Why They Fight: US And China Brawl Over High Technology

To understand why the United States and China stand on the brink of a trade war, consider the near-death experience of American Superconductor Corp.

To understand why the United States and China stand on the brink of a trade war, consider the near-death experience of American Superconductor Corp.

The company, known as AMSC and based in Massachusetts, was reeling after a Chinese partner stole its technology — the electronic brains that run wind turbines. The loss was devastating: AMSC’s stock shed $1 billion in value, and the company cut 700 jobs, more than half its workforce.

“Attempted corporate homicide” is what CEO Daniel McGahn called it. In January, its Chinese partner, Sinovel Wind Group, was convicted in a U.S. court of stealing AMSC’s trade secrets.

To the Trump administration, Sinovel’s predatory practices are hardly isolated. Beijing, it charges, is orchestrating a brass-knuckles campaign to supplant U.S. technological dominance and over the next few decades make Chinese companies global leaders in such fields as robotics and electric vehicles.

According to a report by the Office of the U.S. Trade Representative, Beijing’s tactics include coercing American companies to hand over trade secrets in return for access to the Chinese market; forcing U.S. businesses to license technology in China on unfavorable terms; using state funds to buy up American technology; and sometimes outright theft.

Critics have long asserted that China runs roughshod over intellectual property rights. But President Donald Trump, who ran for the White House on a vow to force China to reform its trade policies, is the first U.S. leader to risk a trade war between the world’s two biggest economies.

“We’ve been in a trade war for a long time, but we weren’t participating,” said Richard Ellings, president of the National Bureau of Asian Research. “We’ve awakened. ... This is a fundamental change. It’s a historic moment.”