How the US-China Tech Wars Will Impact the Developing World

If an “economic iron curtain” falls, it will be in areas like the Middle East and Africa.

By Deborah Lehr, as featured on The Diplomat

In a recent speech, former U.S. Treasury Secretary Hank Paulson raised the specter of an “economic iron curtain,” as trade differences between the United States and China may force countries to choose a side, especially for the adoption of technology. Technology is a key underlying issue as the two countries fight for dominance in new economic frontiers such as artificial intelligence, self-driving cars, and big data. It is in this sector where the biggest fault lines in the U.S.-China bilateral relationship are starting to appear.

Yet this iron curtain will not initially fall across the developed technology markets of the United States and Europe, but in the third-world markets such as the Middle East and Africa, where huge demand exists and where Chinese technology is affordably priced and easily adopted. And where Chinese lending to purchase these technologies is rising, while U.S. financial aid to the region is shrinking.