Globalization

Overview As the volume of legitimate cross-border financial transactions and investment has grown in recent decades, so too have illicit financial flows (IFFs or dirty money). IFFs derive from and sustain a variety of crimes, from drug trafficking, terrorism, and sanctions-busting to bribery, corruption, and tax evasion. These IFFs impose large, though hard to measure, costs on national and global welfare. IFFs and their predicate crimes thwart broader national and international goals by undermining rule of law, threatening financial stability, hindering economic development, and reducing international security. The tide of dirty money has drawn attention from a growing number of actors, including national governments, international organizations, civil society organizations, and private financial enterprises, which have constructed an intricate array of national and global measures and institutions to combat IFFs. As the definition of IFFs has expanded and the policy agenda has lengthened, however, deficiencies and drawbacks in these collective efforts to curb IFFs have become apparent. Accurate measurement has not kept pace with the expanding definition of IFFs. Effectiveness of existing policies and programs to counter IFFs is uncertain. Political attention fluctuates, affecting both international and interagency coordination and national implementation. These shortcomings limit the efficacy of global efforts to combat IFFs. Global Governance to Combat Illicit Financial Flows: Measurement, Evaluation, Innovation includes contributions from six authors, who map the contours of global governance in this issue area and consider how best to define and measure flows of dirty money. Improvements in the evaluation of existing policies as well as innovations that would increase the effectiveness of global governance are among the pressing issues covered in this collection. The authors outline an agenda for future action that will inform collective action to combat IFFs on the part of public, private, and nongovernmental actors.

In July 2018, the Council on Foreign Relations’ Center for Preventive Action convened a workshop to examine areas of cooperation between the United States and the European Union. The workshop was made possible by the generous support of the Carnegie Corporation of New York. The views described here are those of the workshop participants only and are not CFR or Carnegie Corporation positions. The Council on Foreign Relations takes no institutional positions on policy issues and has no affiliation with the U.S. government. Introduction Despite recent turbulence in the transatlantic relationship, the United States and the European Union share a common interest in managing emerging sources of global disorder. To explore prospects for and challenges to transatlantic cooperation, the Center for Preventive Action at the Council on Foreign Relations convened an international group of twenty-three experts at the Tufts University Center in Talloires, France, on July 12–13, 2018, for the workshop “Managing Global Disorder: Prospects for Transatlantic Cooperation.” The workshop is the third in a series of meetings supported by the Carnegie Corporation of New York. It is premised on the belief that the United States, China, the European Union, and Russia not only share a common interest in preventing the world from becoming more dangerous and disorderly, but also that the nature and scope of this task necessitates cooperation among them. Workshop participants discussed their perceptions of the growing sources of disorder in the world, examined areas of strategic cooperation, and explored where the United States and the European Union might work together to address a variety of regional concerns emanating from Africa, China, the Middle East, and Russia. While highlighting how the two can work together to address increasing political instability and violent conflict, participants also cited the importance of the transatlantic relationship in preventing or mitigating the demise of the liberal international order. The Changing Domestic Context for Transatlantic Cooperation Participants agreed that the United States and the European Union are facing a seismic shift in the global order. A Western agenda no longer determines global norms; rather, the West has fragmented and the digital age has undermined the social and international order, creating systemic social dislocation. Compounded by fears over the future of work and employment in the face of artificial intelligence, automation, and globalization, this dislocation is reflected in the rise of nationalism and nativism across the United States and the European Union. Domestic politics have merged with international trends. Participants largely agreed that three domestic issues trouble most American voters: the future of work, the future of the U.S. immigration system, and the future role of the United States on the international stage. Several participants argued that the election of President Donald J. Trump reflects these voter concerns, and suggested that the post–World War II liberal international order has been an aberration in the arc of U.S. foreign policy. Europe faces similar challenges. Participants posited that anxieties over work and globalization have prompted concerns about the future of the European Union and have contributed to the rise of the far right in EU member states such as Hungary and Poland as well as in Turkey. For some participants, the rise of the far right could be an indicator of the transatlantic alliance’s future: an alliance among far right parties focused on undermining global institutions. Moreover, participants agreed that the manipulation of public opinion will increasingly affect the future of political systems. Europe in particular has witnessed the manipulation and polarization of political parties and public opinion on issues like capitalism and free trade. Acknowledging these trends, one participant stated that “the primary challenge facing the West is the West itself.” All participants agreed the United States and the European Union should work both independently and together to address the future of work, immigration, and socioeconomic integration and focus on sustaining a narrative of popular support for the transatlantic relationship in order to resolve the underlying issues of nationalism and populism. As the United States retreats from its global leadership role, one participant suggested that the European Union should continue to prepare for strategic autonomy and that “preparing for a post-American future is not inconsistent with preparing for the return of a future American partner.” The Future of Global Governance All participants agreed that the election and subsequent actions of President Trump catalyzed the decline of the liberal international order. Global governing institutions were already under-performing before Trump assumed office, straining under numerous transnational challenges, but the Trump administration’s pursuit of U.S. autonomy and its apparent abandonment of global, multilateral leadership roles has resulted in the degradation of transatlantic relations. Participants questioned whether the U.S. abdication of leadership represents a lack of trust in international institutions or an actual crisis of democracy. They also asked whether the transatlantic agenda will continue to uphold the liberal international order, or become simply transactional cooperation when needs collide (e.g., on regional security concerns in Asia, Europe, and the Middle East and on strategic concerns over the future of cyberspace). The United States and the European Union continue to share common policy goals and interests, but the lack of predictability in U.S. foreign policy has resulted in what one participant described as a return to Hobbesian international relations. Although U.S. and EU political leaders diverge over their strategic aims, participants agreed that agreements may still function in what one participant termed “compartmentalized cooperation.” The United States and the European Union remain broadly aligned on counterterrorism efforts, deterring cyber aggression, and the prevention of the proliferation of nuclear weapons and weapons of mass destruction. In contested areas, such as climate change, migration, outer space, and trade, participants suggested that subnational agreements (e.g., California Governor Jerry Brown’s climate change partnership with EU leaders) and civil society forums (e.g., French President Emmanuel Macron’s Paris Peace Forum) could function in the absence of high-level U.S. leadership. But although participants accepted that compartmentalized cooperation will serve short-term interests, they disagreed over whether continued cooperation illustrates the resilience of the global governance system. Some participants argued that future cooperation will take place at the subnational level as short-term issues are favored over long-term strategic problems and that formal global governance will be substituted over time by informal, ad hoc cooperation on an array of issues. For the European Union, participants agreed that strategic autonomy will be critical in the absence of U.S. leadership. One participant argued that the European Union should adopt a global strategy and approach democracy as a critical infrastructure project, clarifying how and why democracy matters. For the sake of the transatlantic alliance and the future of the West, participants agreed that the United States and the European Union should become advocates for the liberal international order or risk losing primacy to competing narratives from China and Russia. Potential Areas of Regional Cooperation Despite these concerns, participants identified four regions where the United States and the European Union could coordinate in areas of strategic interest to prevent conflict and potentially bolster the transatlantic alliance. Russia                                        Participants agreed that the long-term challenge from Russia is its ability to undermine Western unity, whether through disinformation campaigns, election meddling, or the use of limited war to transform the international system. As one participant stated, China is a threat because it is a rising power, while Russia is a threat because it is a declining power. Despite Russian aggression, participants agreed that the United States and the European Union should continue to hold dialogues and identified strategic arms control as one area of interest ripe for cooperation. Participants agreed that the United States and the European Union should remain in discussions with Russia on the New START and Intermediate-Range Nuclear Forces treaties. Participants also agreed that the United States and the European Union should adopt a unified approach to Russian cyber efforts, but acknowledged that the likelihood of reaching an agreement with Russia itself was slim. Participants were more optimistic in discussing areas of U.S.-EU-Russia regional cooperation, particularly in the Middle East. Participants recognized that solutions to the conflicts in Iraq, Libya, and Syria would not be possible without including Russia in negotiations. However, to prevent Russia from overtaking transatlantic interests in the region, participants agreed that the United States and the European Union should adopt a unified transatlantic strategy (though they also acknowledged that creating such a strategy is not realistic under the Trump administration). Finally, participants discussed the security architecture in Europe and suggested that the United States and the European Union work to deescalate tension with Russia by clarifying rules of the road for contact, including political interference. Participants suggested that dialogue would build a foundation for mutual confidence and cooperation that could cross over into other areas of strategic interest. China Participants agreed that China views global governance, trade, sovereignty, and human rights in a fundamentally different way than the United States and the European Union do, leaving opportunity for transatlantic coordination on areas of strategic interest. Unfortunately, participants also acknowledged that, given internal European politics and the Trump administration’s policies, it may be difficult for the United States and European Union to develop a cohesive China strategy. On trade, the United States and the European Union have been largely successful in advocating for stronger intellectual property protections, promoting market access, and coordinating pushback against laws and regulations discriminating against foreign entities. However, several participants noted that EU member states are divided in their response to Chinese investment and trade, as some EU states privilege short-term money flows over long-term consequences, thus making high-level U.S.-EU-China trade agreements difficult. With Chinese President Xi Jinping’s consolidation of power, participants noted that China has asserted sovereignty claims more firmly in critical areas, including Taiwan and the South China Sea. Participants noted that the United States and European Union agree on the strategic importance of Taiwan and the South China Sea, but differ in their approaches to both. The United States has made Taiwan an important component of its China policy, while the European Union has not. In the South China Sea, the United States and European Union do coordinate on freedom of navigation operations, but differ in the manner in which they exercise their rights. In terms of future cooperation, participants agreed that the United States and European Union should continue to challenge China on its human rights violations, hold Xi to account on China’s climate change advocacy, attempt to reach an agreement with China on internet governance (which may be difficult given divergent U.S. and EU views), and work with China to establish common standards and lending regulations for its Belt and Road Initiative. The Middle East In the Middle East, participants agreed that the United States and the European Union share concerns over terrorism and the stabilization of Libya and Yemen, but diverge on approaches to Iran and the Joint Comprehensive Plan of Action (JCPOA), as well as the conflict between the Israelis and the Palestinians. Some participants also emphasized that, although the Middle East is geostrategically critical for EU security, EU member states do not follow a coordinated Middle East strategy. Moreover, several participants identified a potential flashpoint in U.S.-EU coordination in the Middle East over a possible Iran-Israel confrontation; they expressed misgivings over whether the United States and European Union would present a united transatlantic front in the face of armed conflict. Regardless, opportunities for cooperation exist and include counterterrorism initiatives and stabilization efforts across the Middle East, particularly in Syria, Tunisia, and Yemen. Participants flagged the Global Coalition to Defeat ISIS as an example of multiple consecutive U.S. and European administrations sharing best practices, intelligence, and labor. As postconflict situations emerge, participants agreed that the United States and European Union will continue to coordinate on regional stabilization, but that the United States is less likely to commit itself to any long-term reconstruction efforts. Africa Participants agreed that the need for a coordinated transatlantic strategy toward Africa is paramount, as Africa faces the “perfect storm” of a demographic bulge, climate change, and the uncertainty of the future of work on the continent. However, although the United States and the European Union share concerns over migration, peacekeeping, and terrorism in Africa, participants recognized that a coordinated transatlantic approach may be difficult. The United States does not currently prioritize Africa in its foreign policy agenda, nor does it involve African countries in high-level dialogues, preferring bilateral interactions and military approaches to resolving conflict. Participants noted that the converse is true for Europe: African stability is critical for regional security, particularly as it affects migration, but the European Union often opts for diplomacy and multilateral initiatives over military operations. Although the United States and the European Union have adopted different strategic approaches to African relations, participants identified several areas for a coordinated transatlantic strategy: counterterrorism efforts in the Sahel against international criminal and terrorist networks, democracy promotion in fragile states, and civil society and private sector work on climate change. Recognizing that current crises are the result of short-term policy and spillover from ongoing conflicts, participants agreed that the United States and the European Union should develop security agreements in Africa, focusing on economic and humanitarian tools to address the needs of younger generations. Participants concluded that diplomacy and prevention in Africa will be critical in handling the approaching perfect storm. Recommendations Participants noted that the international system faces fundamental, strategic, and systemic shifts that may outlast current U.S. and EU governments. Participants remain pessimistic that China and Russia will seek to keep the liberal international order as both countries see little incentive to do so and have experienced limited repercussions in deviating from established international norms. Participants also agreed that the United States and European Union are unlikely to adopt a cohesive transatlantic strategy toward China and Russia, but expressed hope for cooperation in other areas of strategic and regional importance, including in Africa and the Middle East. As a result, participants suggested that the United States and European Union use this inflection point to reconsider the benefits of the liberal international order, and potentially ensure its survival by developing a cohesive strategy and pursuing the following: Identify areas where civil society and private sector actors can take the lead on contentious issues, including climate change. Pursue specific strategic areas of cooperation below the senior levels of government to maintain dialogue and ensure the pursuit of national security interests. Potential areas of cooperation include arms control agreements and counterterrorism efforts. Prepare for European strategic autonomy, despite internal European political disputes. Though Europe is preparing for a post-American future, its efforts do not preclude the return of U.S. power. Empower the periphery: those actors who operate at the sub-state level. As societies grow increasingly interconnected, the traditional state-based framework may need to flex and allow for nonstate civil society actors to work on transnational issues.

Sessions were held on how to revitalize the Bretton Woods institutions, strengthen liberal democracy, combat transnational organized crime and corruption, and mitigate the humanitarian and political crises in Venezuela.

In July 2017, the Council on Foreign Relations’ Maurice R. Greenberg Center for Geoeconomic Studies held a workshop to examine the drivers behind digital protectionism in Asia and Europe, its implications on the U.S. economy and foreign policy, and policy responses to mitigate the problem. The workshop, hosted by then CFR Senior Fellow Jennifer M. Harris, was made possible by the support of the Carnegie Corporation of New York. The views described here are those of workshop participants only and are not CFR or Carnegie Corporation positions. The Council on Foreign Relations takes no institutional positions on policy issues and has no affiliation with the U.S. government. Introduction Digital protectionism in Asia (especially China) and Europe increasingly threatens the only area of cross-border economic activity still growing nearly a decade after the global financial crisis. Web censorship, forced transfer of intellectual property, data localization, and onerous privacy rules have combined to hamstring the development of the data-based digital economy—the commerce in virtual, not physical, goods. On July 20, 2017, CFR gathered more than two dozen current and former government officials, technology executives, economists, and trade lawyers at the half-day workshop “The Rise of Digital Protectionism: Implications for U.S. Interests and Possible Solutions,” in San Francisco, to examine these issues and explore options available to U.S. policymakers to counter the protectionist measures. The Problem With China’s Digital Protectionism China’s embrace of digital protectionism is just a page from its standard playbook, many participants said, meant to undercut foreign competitors and boost Chinese companies. President Xi Jinping has “stepped on the gas,” one workshop participant argued, making state control of the digital economy a “huge priority” for the Communist Party of China as it seeks to meet ambitious growth targets. The protectionism takes many forms: web censorship through the so-called great firewall, forced technology transfer through mandated joint ventures with foreign firms, and a new cyber security law that places onerous requirements on nearly every foreign company doing business in China. The requirements in the new law that data be physically housed in China, in particular, and limits to data flows out of China are akin, one participant said, to a “Roach Motel”: the data comes in but cannot get out. Participants suggested that two forces have driven the tougher new digital regulations. First, as it did in the past several decades with traditional industries, China seeks global dominance in several high-tech sectors projected to be at the forefront of growth in coming decades—artificial intelligence (AI), robotics, biotechnology, and autonomous vehicles, among others—and uses digital protectionism to carve out a privileged space for Chinese firms. Second, the Communist Party sees the free flow of data and digital communications as a threat to regime stability and seeks greater state control of data flows. Such protectionism is neither new nor unique to China. But participants stressed that the sheer size and global importance of the Chinese economy makes Beijing’s “bare-knuckle” approach to digital protectionism problematic for U.S. policymakers. Some African countries are already replicating the mercantilist Chinese model, as evidenced by increasing government restrictions on the internet and data flows in Ethiopia, Nigeria, and South Africa. Meanwhile, Western countries and international firms have been loath to push back against Chinese restrictions for fear of losing access to the world’s largest economy by purchasing power parity. The Need to Push Back Against China In recent years, the European Union (EU) has ramped up its digital protectionism, vowing to create a digital single market with Europe-wide rules on data flows, implementing rigorous privacy standards, cracking down on hate speech, policing social media, and challenging the market dominance of (predominantly American) technology firms. Participants noted that Europe’s digital protectionism is in line with Brussels’ legalistic, top-down, heavily regulated approach to economic policy and that, like other EU initiatives, it lacks a comprehensive appreciation of the interplay of privacy, security, and innovation in the digital economy. U.S. firms are asked to do more than European firms with respect to privacy protections, for example. These and other requirements, such as data localization in different member states, create a regulatory burden that is especially costly for small- and medium-sized tech firms. Many participants underscored what appears to be an anti-American bias in European digital regulation, pointing to high-profile antitrust cases and limits on American tech firms doing business there. But many attributed that to poor, not protectionist, policies. They argued that European policymakers, hostage to overlapping jurisdictions, are not equipped to tackle interrelated problems such as privacy, security, and economic innovation in a unified way and often introduce flawed policies based on a misunderstanding of what technology can actually do and what effects the policy actually has on businesses and consumers. Laws intended to rein in corporate titans often impose substantial compliance burdens that ironically hurt small tech firms while the Googles of the world easily meet those requirements. One participant summed up Europe’s approach to the digital economy as “not protectionist, just flawed—and wrong.” Despite the limitations brought about by Europe’s digital restrictions, participants largely agreed that Europe is more an irritant than a major threat and that the EU could help the United States push back against Chinese digital protectionism. A Digital Economy Drives Globalization Barriers to the free flow of data and digital information are consequential to the United States, participants said, because the global digital economy has quickly become a large part of cross-border trade flows. Participants estimated that cross-border data and digital flows account for between $2.8 trillion and $4 trillion of the $7 trillion to $15 trillion in total cross-border flows of goods and services. Moreover, although cross-border flows in traditional goods and services flatlined after the 2008 financial crisis, data and digital flows have continually grown, increasing eighty-fold since 2005. Participants noted that the digital economy is the sole part of globalization that is still proceeding apace and is more diffuse than traditional globalization, given the active role that smaller firms and smaller countries play. One participant argued that the digital economy is “shifting the nature of globalization,” by deepening cross-border trade in virtual goods even as growth in physical trade has been nearly stagnant. New technologies are creating economic opportunities, but creeping protectionism, especially in China, could threaten U.S. competitiveness in critical sectors. Participants highlighted massive Chinese investment in semiconductors, for example, as well as China’s dominance of the supply chains for fifth-generation mobile phones, not to mention Chinese determination to stake out a leading position in sectors such as AI, robotics, electric and autonomous vehicles, and biotechnology. China’s digital approach, one participant noted, has already resulted in its dominance of crucial sectors, “and they will dominate going forward.” But It Affects the Old Economy, Too Digital protectionism does not just pose a risk to U.S. competitiveness in sectors at the center of the future economy, it also threatens traditional sectors such as manufacturing, energy, and agriculture. Participants noted that advanced manufacturing has a large and growing data component: 3-D printing and digital manufacturing, for example, rely on cross-border data flows as well as a data-intensive research and development program. Traditional sectors such as agriculture are seeing a growing role for data, for example, in biotechnology and the development of new strains of seeds. Likewise, extractive industries and the energy sector are being transformed to rely increasingly on data, from geological big data crunching that enabled the hydraulic fracturing revolution to global shipping that is becoming increasingly automated. In that sense, some participants suggested, China’s digital protectionism, while boosting its dominance of high-tech sectors, could backfire in other areas. The rise of big data across a growing number of sectors is helped by jurisdictions such as the United States that allow unfettered data flows. Europe’s tough privacy laws also discourage innovation among technology firms; data localization requirements push tech startups to American shores, where compliance costs are lower. One participant suggested differentiating and regulating data—from anonymous industrial data to regular user information, to extremely sensitive, personal information such as health records—according to its sensitivity. Maintaining cross-border data flows with few government restrictions will be important as the digital transformation plays out in traditional sectors. As one participant put it, networks matter: an economy that tries to insulate itself from global data flows by throwing up restrictions to cross-border data-sharing risks cutting itself off rather than protecting its national champions. Conversely, for the United States, the data-rich patina overlaying sectors such as advanced manufacturing represents an opportunity for an open economy desperate to right its distorted trade balances. As one participant emphasized, “If we are going to boost exports to regain leadership for the U.S. in manufacturing, you can’t avoid thinking about the role of digitization.” Digital Protectionism Threatens National Security To the extent that Chinese digital protectionism gives Beijing an advantage in the global economy, it could also give China an advantage on the battlefield, some participants warned. The United States’ edge in military technology is threatened by concerted Chinese advances in areas that could enhance China’s cyber capabilities. Some participants warned that digital restrictions, especially Europe’s rigorous privacy protection, could make it harder for the United States to properly defend against national security threats, especially terrorism. While U.S. policymakers try to balance security, privacy, and economic concerns with digital regulation, Europe pursues each area of policymaking on its own separate track, which could have dire consequences for U.S. security. Other less obvious security concerns arise from the trend toward digital protectionism. Data localization in Russia, for example, forces U.S. firms to store data from Russian users on servers in that country, opening the possibility of digital reprisals from Moscow in the event of U.S. sanctions against Russia, such as happened after the invasion and annexation of Crimea. One participant characterized the “new constraints” that data localization placed on Washington’s ability to use economic sanctions as a foreign policy cudgel. How U.S. Policymakers Should Respond Workshop participants agreed that the first order of business is to address the Donald J. Trump administration’s focus on traditional sectors of the economy and its corresponding lack of understanding of the scope of the threat from digital protectionism. One participant noted that the administration’s public discussions of trade policy favor goods over services and tangible cross-border flows over data. “We need to explain to a manufacturing-obsessed administration why it should care about digital and data,” one participant argued. Others suggested that the first step should be to educate policymakers about the linkages between the traditional and the digital economies and about how digital protectionism could affect U.S. economic prospects. U.S. government agencies also need to build a more coordinated approach to digital issues. The State Department and the National Security Council, for example, wall off digital innovation from cybersecurity issues, complicating interagency and intragovernmental coordination on data and digital policies more broadly. One participant recommended crafting an international charter that would set the basic rules for regulators on how to approach data mobility and security, akin to the early trade guidelines that bounded the General Agreement on Tariffs and Trade and eventually morphed into an accepted, global trade architecture. Even if such a charter failed to secure a consensus among the United States, China, and Europe, it would at least put competing tradeoffs on the table—privacy versus security versus innovation—and avoid policymaking that treated each as an isolated issue. Some participants suggested prioritizing data and digital issues in upcoming trade talks, whether in the North American Free Trade Agreement (NAFTA) renegotiation or the continuing talks between the United States and Europe about a free-trade pact. Older trade agreements such as NAFTA could be revised now to address digital issues that were not apparent twenty-five years ago. Other participants, however, doubted the appropriateness of trade talks for digital issues. Lobbies for traditional sectors such as steel and agriculture dominate trade discussions; tech firms are either unable or unwilling to do the same. Further, ambitious trade deals, such as the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP), which seek to better deal with data and digital trade, face problematic futures. Asian and Latin American countries are trying to salvage a shrunken TPP after the U.S. withdrawal, while TTIP is burdened by EU divides, Brexit, and a skeptical public attitude in the United States and Europe toward free trade. Other participants stressed that the U.S. government cannot tackle digital protectionism on its own. Many suggested that the Trump administration should work with the business community to strengthen its resistance to unreasonable digital oversight, since many firms—eager to dive into the Chinese market—acquiesce to restrictive digital regulations with little or no pushback. To get businesses on board, participants recommended modifying the Foreign Corrupt Practices Act (FCPA), which outlaws the transfer of money to foreign governments, and similar laws meant to prevent bribery and corruption by U.S. firms overseas. Expanding the concept of the FCPA to include in-kind handovers—such as data, access to networks, or veto over the ultimate use of corporate data—could force companies to stop accepting onerous digital rules. At the same time, many participants stressed the importance of the United States enlisting other countries, particularly those in Europe, to push back against Chinese digital protectionism. While many smaller economies are hesitant to do so for the fear of losing Chinese investment, participants said that the EU could play a role alongside the United States in pressuring China, especially on privacy, because, as one participant noted, “as many differences as we have with the Europeans, we both have more with China.” Several participants, noting that timid U.S. government responses to Chinese protectionism in the past had ultimately encouraged such behavior, urged a tougher line. They suggested using the World Trade Organization to tackle digital protectionism, starting with smaller countries to set precedents before taking aim at Chinese abuses, or retaliating using trade authority under U.S. domestic law. Other participants pointed to additional elements of U.S. leverage, such as access to the U.S. market. Reforming the Committee on Foreign Investment in the United States, for example, to more closely scrutinize and, if needed, block potentially sensitive foreign investment in digital technology, could nudge China toward more reciprocal behavior. Yet others recommended a more aggressive use of export controls, which would hurt China’s current acquisition spree and could ultimately drive concessions on digital protectionism.