The global economy in the decades ahead will be volatile and uncertain. A first driver of the volatility and uncertainty is the reconfiguration of the global political economy reflecting what we term the new zero-sum logic of globalization and its implications for cross-border flows of goods and services. An important element of this reconfiguration is China's growing economic and geopolitical power. The goal of the US controls on semiconductor exports and outbound US investments to China is to keep China several years behind the technological frontier in this militarily critical dual-use digital technology while the US strengthens its lead. Although the US denies a zero-sum approach in its economic relations with China, that zero-sum logic is a foundation of US policies to restrict US exports and outbound investment intechnologies deemed to have significant national security implications.
This Working Paper is prepared for the Brookings/KDI Project: New Global Dynamics: Managing Economic Change in a Transforming World.