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While many of the policies that fall under the rubric of indigenous innovation clearly make it more difficult for American companies to operate in China, the long-term impact on Chinese competitiveness remains uncertain at best. It is difficult to create an environment that rewards individual initiative and creative risktaking from the top down. Moreover, the focus on reducing dependence on the advanced economies means that Chinese officials focus on known technologies—the latest Intel microprocessor or Nvidia graphic processing unit—often encouraging copying and reverse engineering, not new developments.
Despite the limited efficacy of these policies, the United States must still push back against them. Protests have proven most effective when the pressure is multilateral and not just from Washington, and when governments and businesses speak with one voice. Still, policymakers should expect movement from Beijing to be limited—Chinese policymakers are deeply committed to the idea of technological independence, and one set of policies is likely to be replaced with another.