The writer is author of ‘Chip War’
China’s emergence as the world’s largest auto exporter caught many people — including the biggest carmakers — by surprise. Cars used to be a rare type of manufacture in which western companies retained durable technological advantages. The transition to electric vehicles has given Chinese companies an opportunity to leap ahead, threatening to reshape trade flows in the process.
The surge of Chinese cars into foreign markets poses two dilemmas that will complicate trade. The first relates to security. New cars feature dozens of sensors, complex software systems and semi-autonomous capabilities. Western leaders have only just begun to consider the security implications of fleets of foreign-made, sensor-stuffed cars on their roads. Beijing, by contrast, has imposed strict data localisation rules on Tesla — China is its biggest market outside the US — and banned Tesla’s cars from sensitive locations.