Tipping the balance between global rivals

John David Minnich was under the spell of political philosophy until he took a trip across a bridge in China. The doctoral student in political science vividly recalls this life-changing 2009 journey, undertaken as part of a summer research fellowship program. 

“Driving in from the airport, I was overwhelmed by my first glimpse of the Shanghai skyline — a scene of insane activity,” he says. “I realized I was witnessing the future and that I’d have to understand what was happening here to know where the world was going.” The experience was so powerful, adds Minnich, “that 15 years later, I’m still driven by it.”

In his nearly-complete dissertation, Minnich explores how China’s strategic use of trade and foreign investment policy to bring about large-scale transfers of foreign technology helped power that nation’s rapid economic ascent.

“The U.S. and China are in the midst of a possible power transition,” says Minnich. “I want to understand how old great powers fall, and how new powers rise.”

Minnich’s studies shed light on the mechanics behind these tectonic shifts in global might.

“In the current era, rapid technological change, the globalization of production, capital flows, and technology drive rates of growth,” he says. “Policies to harness these forces, such as those made by China, are crucial to explaining how one country becomes a superpower, while others lag behind.”

Tech transfer and trade war

In 2018, Trump administration policies that amounted to a new trade war with China provided an impetus for Minnich’s doctoral research. “This war led to the deterioration of U.S.-China relations and a breakdown of communication, with life-and-death implications,” says Minnich. He was particularly interested in the punitive tariffs the U.S. government levied on specific Chinese industries, justified primarily on the grounds of what the administration called forced technological transfer and intellectual property theft.

“There was clearly an incredible process of China going from technologically backward to being a tech powerhouse, and out-competing us in many critical industries,” says Minnich. “There had been no effort to go out and systematically document how China used technology transfer policies in a strategic way, so that’s what I set out to do.”

China has a well-established practice of demanding that foreign firms doing business there form joint ventures with domestic companies and share technology, says Minnich. But he wondered if there was any variation by industry to this convention. So in the first phase of his dissertation research, he created a dataset showing “what policies were in place for a given industry, in a given year,” drawing from hundreds of pages of Chinese central government policy documents. This singular dataset revealed some puzzling variations in the application of policy.

Strong evidence of foreign technology transfer regulations showed up in a cluster of “objectively strategically important industries.” But in a strange twist, in the semiconductor industry, critical to China’s and the world’s economy, the same rules did not apply. The explanation for this policy exception, believes Minnich, derives from China’s position in global supply chains.

In those industries where China imports products and provides a domestic consumer base, it has the greatest leverage on foreign companies and strenuously applies technology extraction policies. Some examples Minnich cites: civilian aircraft, automotive, high-speed rail, and wind turbine manufacturing. But in industries where most of what China imports it simply processes locally for re-export to consumer markets overseas — such as semiconductors, until recently — it has less leverage. “China is dependent on foreign firms, which not only directly employ millions of people in China, but also act as gatekeepers to international trade,” he says.

From revolutionary history to policy

Minnich’s journey to China began, unexpectedly, with his involvement in experimental theater. Raised in Austin, Texas, by politically progressive parents, he discovered a penchant for the stage in fifth grade; by high school he was starring in regional productions. Inspired by the essays of playwright Bertholt Brecht, Minnich became immersed in political philosophy. This led to a summer program, and at Cornell University, an undergraduate focus, on critical theory and revolutionary history.

“Then with the 2008 Beijing Olympics, China was on the map,” he recalls. “If I was seriously interested in the global history of revolutions, I had to look at the Chinese revolution.” He crossed the bridge into China studies. “I’d spent two years acquiring powerful theoretical tools for understanding the past, but I realized that what I was witnessing would transform the way the world works.”

Minnich left Cornell with a degree in history and Asian studies, then spent two years in China immersing himself in Mandarin. On his return, he worked as an Asia-Pacific analyst for Stratfor, a platform for geopolitical risk analysis. “My primary responsibility was Chinese political economy and U.S.-China relations,” he says. “It trained me to do big-picture theorizing on how states behave, and to develop a deep understanding of different industries.”

Certain he wanted to become a China scholar, Minnich headed for MIT. “Since that moment in Shanghai 14 years ago, just one thing has driven me: the reasons behind China’s rise, and its potential consequences.”

Research as resource

With advisors M. Taylor Fravel, In Song Kim, Richard Samuels, and Jonathan Kirshner, Minnich fleshed out an ambitious program of research that challenges the conventional understanding of the ways states advance their political goals through trade policy. Many researchers assign a major role to interest groups, he says. “But you can’t understand China’s trade policy without considering the Chinese Communist Party’s strategic goals to speed up the country’s rise,” he says.

Minnich believes his findings will prove useful. “A greater grasp of where China does or doesn’t apply trade rules and industrial policies will leave policymakers better equipped to develop effective responses,” he says. Minnich adds that he has found evidence that developing countries are beginning to employ tactics pioneered by China to secure technology transfers.

He also wants to sound an alarm about the long-term consequences of the U.S.-China trade war. “It is eroding cultural and educational exchange between the countries, and affecting the U.S. business community’s view of China in a potentially dangerous way,” he says.

Extending his dissertation research, Minnich is currently building a comprehensive database on Chinese industrial and technology policies from 1978 to the present, which he will make publicly available once completed. Funded by the National Science Foundation and American Political Science Association, the database will encompass more than 60,000 Chinese-language policy documents. “I’m creating this so future China scholars can probe a huge number of questions,” he says.

Minnich’s next task is to turn his thesis into a book on how China regulates inflows of goods and capital in order to secure foreign technology transfers. At the same time, he is also planning his next project, which will investigate China’s evolving efforts to shape its strategic environment. “Ultimately, this will build towards a much bigger work: an overview of the entire process of China’s rise,” says Minnich.