Why Trade war issuse between US and China is the concern for rest of the World

• America’s trade war with China has entered its fourth month and tensions continue to mount with tariffs and counter-tariffs.

However, a larger conflict was about China’s theft of sensitive technology and influence operations:

• However, what is really at stake are growing American concerns about China’s theft of sensitive technology to narrow the technology gap.
• The FBI director warned that Confucius Institutes and other Chinese state-backed organisations operate as “nontraditional collectors, especially in the academic setting,” in large and small cities all across the United States.
• They are exploiting the very open research and development environment in the US.
• Influence operations: Vice President Mike Pence also blasted China for its comprehensive “influence operation” and for “rewarding or coercing” American businesses, movie studios, universities, think-tanks, journalists, and government officials.

US countering China's espionage:

• The US has quietly stepped up its counter-intelligence and law-enforcement machinery to foil Beijing’s multi-directional espionage efforts.
• In recent weeks, the US has highlighted several clandestine Chinese efforts to steal sensitive US technology.
• In an overseas sting operation, American authorities nabbed a senior officer of China’s Ministry of State Security trying to obtain engine designs from GE Aviation in Belgium.
• The Departments of Commerce and Justice worked with the government of Taiwan to stop a Chinese state-owned chip maker from stealing US trade secrets. 
• Law to prevent IP theft:
• Earlier, with the support of FBI, the US Congress introduced Stop Higher Education Espionage and Theft Act of 2018 to prevent IP theft by spies masquerading as students.
• In the past, Chinese students have been accused of stealing intellectual property including sensitive dual-use research.

Chinese manufacturing in high-end and IoT devices a major concern for the US:

• Trump’s hardline approach towards China also received bipartisan support from the US-China Economic and Security Review Commission.
• The commission was set up by the Congress in 2000 to monitor national security implications of bilateral trade.
• The commission published a report recently warning that the dominance of networking equipment manufacturing by Chinese companies (like Huawei Technology and ZT Corporation) threatens the security of US 5G wireless infrastructure.
• Chinese devices can create many points of vulnerability:
• The commission also cautioned that China can use the internet-connected household devices designed and manufactured by Chinese companies for intelligence collection.
• Such devices, the report said, create numerous points of vulnerability for intelligence collection, cyberattacks, industrial control, or censorship.

US needs to get control of supply chain in technology device manufacturing:

• The commission urged the US government to address this new vulnerability through better control of the supply chain used to make these devices.

US targeting China's Made in China 2025 campaign:

• The public criticism of Chinese spying and influence operations and the arrests of Chinese operatives coincide with the Trump administration’s increasing concern about Beijing’s “Made in China 2025” campaign.
• That programme launched in 2015 aims to achieve dominance in ten high-tech industries, including artificial intelligence, robotics, aircraft manufacturing, semiconductors, and pharmaceuticals.

How will China respond?

• Chinese official commentaries the US trade war was mainly aimed at disrupting China’s high-tech industry involved in the “Made in China 2025” plan.
• Chinese commentators said that US' moves were also intended to impede China’s development.
• The stepped up US effort to strangle the initiative is likely to lead an ultra-nationalist China to redouble its effort.
• Even if the Chinese suspended their subsidies for high technology industry in response to US pressure, those programmes would be taken forward by the private sector.

Way ahead - long struggle:

• Reaching an amicable resolution to the tariff war could lower the temperature, but it will not address the deeper tensions.
• The intensity of mutual distrust, combined with Washington’s demands that China fundamentally change its industrial policy and its overall espionage effort, forebodes a long struggle.