These are testing times for Detroit’s big automakers as they puzzle over where to place their bets. Pickup trucks or driverless cars? Internal combustion engines or electric motors? Hardware or software?
Now, an even larger question looms, just as a mobility revolution reshapes the industry: America or China?
Tensions over technology, if not an outright cold war, are threatening to become a permanent feature of the US-China relationship. In an extreme case, as White House hard-liners press to limit advanced technology exports to China, some US companies operating on the mainland could be forced to retreat to their home market. Hank Paulson, the former US Treasury Secretary, recently warned of an economic “Iron Curtain” falling between the two countries.
US auto executives have as much reason as any to worry. Indeed, their dilemma illustrates how any serious US effort to block high-tech exports to contain China would be both delusional and self-destructive. While it would almost certainly fail in the long run, it would cause a good deal of needless disruption along the way.
Realistically, US automakers can’t afford to detach from China. They’ve been borne along by the country’s extraordinary growth for decades; booming sales there saved General Motors from going belly-up in the 2008 financial crisis. And, while the pace of expansion has slowed lately, sales of new passenger cars in China are still far higher than those in the US, Japan and Germany combined.
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