Illustration: Tang Tengfei/Global Times

It’s no secret that the United States and its allies have been busy putting up barriers to block Chinese technological development in recent years. As the Biden administration tries to entice its allies into forming an anti-China clique, they are said to be weighing in on another step to form a united front to restrict Chinese investment.

The EU will work to agree a framework with the US to screen “potentially hostile foreign investment” when officials meet in Pittsburgh later this month, Bloomberg reported, citing unnamed sources. .

During the meeting, the US and EU will aim to “make similar statements to shape cooperation on export controls, artificial intelligence (AI) and critical supply chains of goods like semiconductors,” according to the report.

Although the statement did not directly mention investments from China, it was seen by the market as targeting Chinese investors. China’s rapid technological development in recent years has sparked envy and a sense of crisis among traditional technology leaders in the West.

From increasing scrutiny of EU investments to constant US attacks on Chinese companies, Western countries have sought to contain China’s growth, especially technological advancements.

The formation of a new EU-US investment review alliance, if indeed established, will create more challenges for Chinese companies. However, this is not the first time that China and Chinese companies have faced an external technology blockade, which has always been ultimately overcome by China.

China has increased investment in research and development (R&D) over the past decade to fill technical gaps and catch up with the world’s advanced levels.

In 2020, the country spent a staggering 2.44 trillion yuan on R&D, an increase of 10.3% over the previous year, accounting for 2.4% of the country’s total GDP. According to a report by the World Intellectual Property Organization (WIPO), China continued to rank 14th in the Global Innovation Index in 2020, making it the only middle-income economy among 30 firsts.

In addition, among the top five global technology clusters, two are located in China, Shenzhen-Hong Kong-Guangzhou and Beijing, according to WIPO. In 2020, China registered nearly 390,000 patent applications in the AI ​​sector alone, accounting for 74.7% of the total number of global applications, ranking first in the world.

The highly dynamic innovative environment attracts world-class talent and companies from home and abroad, not to mention the unrivaled market that simply cannot be let go by global tech giants.

Global investors have widened their disposition in China’s increasingly open market, even amid the COVID-19 pandemic.

Late last year, China and the EU completed negotiations on the EU-China Comprehensive Investment Agreement. As a mutually beneficial agreement, it was eagerly awaited by the European business community; however, there will never be any question of the EU reaping benefits from the Chinese market while blocking the development of Chinese companies.

Faced with growing headwinds from the West, China must be prepared to deal with malicious attacks and protect the rights of Chinese companies operating overseas. If the West unreasonably tightens control over Chinese investment, China may apply corresponding restrictions on European companies, which is also in line with international economic and trade principles.

The article was compiled based on an interview with Li Gang, a research associate at Wenzhou University Business School. [email protected]