Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Google's Eric Schmidt calls for the U.S. to meet China's challenge in his new book
After the Chinese government hacked Google to steal Google's proprietary code and access dissident e-mail accounts, Google left China. As economist Peter Morici noted at the time in a Seeking Alpha commentary (Google and the Larger Chinese Challenge):
Google CEO Eric Schmidt is continuing to call for a United States response to the China challenge. He served on the President's Council of Advisors on Science and Technology (PCAST) where he helped put together an exellent Report to the President on Ensuring American Leadership in Advanced Manufacturing, about how to help American hi-tech companies compete. That report made many excellent recommendations, including that the U.S. lower its excessively high corporate income tax and that the U.S. help small hi-tech firms share research facilities, a technique that was successfully pioneered during the Reagan administration.
Now, According to a pre-publication review (Exclusive: Eric Schmidt Unloads on China in New Book), Google CEO Eric Schmidt is calling for the United States to meet China's industrial espionage challenge in his new book, Digital Age, co-written by Jared Cohen, who runs Google Ideas. Here is a selection from the review:
Schmidt and Cohen also point out that China is trying to gain control over the Internet by out-competing U.S. giant Cisco Systems with its own proprietary system that only Chinese companies will be able to service and control. According to the review:
Schmidt and Cohen are calling for American corporations and the American government to respond jointly. It is vital that they do so. China is not only taking away the technologies of America's corporations. It is also taking away America's economic future.
It is vital that we secure our proprietary technologies. In order to sell to the growing Chinese market, the Chinese government forces American companies to locate in China and share their technologies with Chinese competitors or have them stolen through industrial espionage.
But WTO rules let any trade deficit country adopt a Scaled Tariff to balance trade. China would have to open its markets to American products in order to continue to access American markets for Chinese products.
American corporations would then be able to keep their own technologies in the United States, where intellectual property could be protected, and still be able to sell to China's growing markets. Not only that, but the investment in American manufacturing that would take place would make America a growing marketplace, not just China.
Journal of Economic Literature:
Atlantic Economic Journal: