China and the United States remain in a tense battle over trade tariffs, intellectual property, and the future of their economic relations. Trade disputes have been a political talking point throughout 2018, and the ongoing war of tariffs has caused damage to investment markets on both sides.

As the two nations engage in negotiations to reach a new trade deal by March 1 (a deadline set by President Trump), China is working internally to position itself as a technology leader. To do this, it still needs the help of the U.S. and the talent that is held in Silicon Valley.

China Leads in Electronics Manufacturing, But Innovation Lags

China produces most of the world’s consumer electronics. Companies like Apple, Microsoft, and even Korean smartphone giant Samsung rely on Chinese manufacturers to produce devices. When it comes to manufacturing, they are ahead of the curve.

However, while it has the infrastructure to produce technology, the nation is still behind on research, development, and innovation.

China wants to move away from being the producer of the world’s electronics, and instead become a tech leader. For that, it needs innovators from the U.S.

China’s Largest Tech Companies Have Research Centers in Silicon Valley

Silicon Valley, and the talent that comes from nearby Stanford University, is the real heart of the world’s tech industry.

The area is competitive because it is well resourced, highly educated, and the companies that operate there can draw from the most talented tech workforce. Alphabet (Google), Hewlett Packard Enterprise, Facebook, Intel, and AMD are just some of the industry leaders that are based in Silicon Valley.

China recognizes the need for a presence in the region, and some of its biggest tech companies are already there. Alibaba, ByteDance, Baidu, Didi Chuxing, and Tencent, all of which are Chinese tech leaders, have primary research facilities in Silicon Valley.

A Better Trade Relationship Would Benefit Both Sides

Just as China benefits from the thriving tech industry and talent in Silicon Valley, American manufacturers benefit from low cost and highly advanced manufacturing. The two industries complement each other, and a better trade relationship will benefit both parties.

Investors, business owners, and the public are anxious to see a new trade deal signed between the United States and China. President Trump is pushing for fairer conditions and better access to the Chinese market.

A new deal in 2019 won’t just expand and protect areas of the American economy, it would also ensure continued benefits from the unique relationship between tech sectors in both nations.