Competition From China Reduced Innovation in the US

From Naked Capitalism:

Reduced innovation is another reason to question using China as America’s outsourced manufacturer.

he decline of innovation in the face of Chinese import competition suggest that R&D and manufacturing tend to be complements rather than substitutes. That is, when faced with rapidly intensifying rivalry in the manufacturing stage of industry production, firms tend not to substitute effort from production to R&D. While politicians’ ‘obsession’ with manufacturing is primarily due to the sizable employment losses in the sector during recent decades, an accompanying reduction in innovation may well affect economic growth in the longer term.

http://www.nakedcapitalism.com/2017/03/competition-china-reduced-innovation-us.html