Great Power Rivalry Could Reshape Technology Transfer to the Global South

A new analysis published in the journal Global Public Policy and Governance argues that the intensifying rivalry between the United States and China may have an unexpected consequence: it could make it easier, not harder, for developing countries to acquire the foreign technology they need to industrialize. The study, written by John Minnich of the Department of International Relations at the London School of Economics and published open access on 18 November 2025, examines how the geopolitical dynamics of the Trump era might reshape patterns of technology transfer to the Global South. Its central claim is counterintuitive. While Washington and Beijing view their competition as a zero-sum struggle over chips, batteries, and artificial intelligence, the contest for influence across Africa, Latin America, the Middle East, and Southeast Asia may give poorer governments bargaining power they have not enjoyed since the Cold War.

Minnich builds his argument on an analogy drawn from economics rather than strategy alone. He applies theories of oligopolistic competition, the behavior of markets dominated by a small number of large firms, to the international system. Just as a handful of dominant companies in a concentrated market must anticipate each other’s moves, great powers in a multipolar world are locked in strategic interaction where each actor’s choices shape the competitive landscape. The analogy is imperfect, as the author concedes, but it illuminates a crucial structural point: whether firms or states compete or collude is not determined by structure alone. Oligopolists can slash prices to win market share, or they can quietly form cartels. Great powers, likewise, can compete for spheres of influence or reach accommodations that divide the world between them.

The starting point of the analysis is the behavior of a monopolist. When a single firm dominates a market, its overriding priority is to preserve that position by preventing rivals from emerging. Monopolists therefore have weak incentives to trade valuable assets, such as proprietary technology, for short-term sales, and strong incentives to restrict technology flows to potential future competitors. Minnich points to real-world examples such as the Dutch firm ASML, which monopolizes the production of cutting-edge lithography systems, and CFM International, which dominates the narrowbody aircraft jet engine market. Both sell heavily to China, yet neither has transferred meaningful technology to Chinese partners, even where doing so would have been legal. Control over supply gives such firms the leverage to dictate terms.

He then argues that after the Cold War, the United States occupied a broadly analogous position over global technology flows, since almost all high-technology companies were headquartered in the United States and its allies, and American firms controlled much of the core intellectual property behind high-tech goods produced elsewhere. The post-Cold War shift to an effective Western monopoly over technology coincided with the creation and expansion of a far more robust international intellectual property regime, embodied in the World Trade Organization’s agreements on Trade-Related Intellectual Property Rights and Trade-Related Investment Measures. Whatever their motives and merits, Minnich suggests, these agreements plausibly slowed technology diffusion to less-developed countries by narrowing their development policy space. It is striking, he notes, that since 1990 lower-income countries’ share of global manufacturing value-add has generally stagnated, with the notable exception of China, which pursued precisely the technology transfer and industrial policies the Washington Consensus discouraged.

The situation changes when a challenger enters the market. In an oligopoly, incumbents must balance their long-term interest in preventing future competitors against the short-term need to fight current rivals for market share. The more intense the competition, the more willing incumbents become to trade long-term advantages for immediate access to new markets or influence over client states. At the same time, competition on the supply side boosts the bargaining power of prospective host countries, which can play rival suitors against each other to extract better terms, including pledges of technology transfer. History offers vivid illustrations. During the Cold War, the Soviet Union between 1953 and 1960 set up more than 200 industrial projects in China, transferred thousands of industrial designs, sent as many as 10,000 experts, and educated more than 50,000 Chinese engineers, transfers that research shows durably improved Chinese firms’ capabilities in steel and other heavy industries. American allies in East Asia benefited from direct military technology transfers and support for licensing commercial technologies.

There is evidence that this dynamic is already re-emerging. Aspects of China’s Belt and Road Initiative, including the Digital Silk Road, have been examined for the technology spillovers they enable in host countries. Drawing on recent data, Minnich highlights a sharp increase in Chinese greenfield investment in clean energy technology manufacturing, from electric vehicles and batteries to solar, wind, storage, and green hydrogen, with the vast majority flowing to countries outside North America, Europe, and Northeast Asia. Some of this investment has been accompanied by explicit calls for or pledges of technology transfer. Gulf governments, for example, have sought to leverage U.S.-China competition to secure transfers in battery technology and artificial intelligence data center development. Two factors could accelerate the trend: the decline of the WTO as an enforcement mechanism, eroding norms against state intervention, and the U.S.-China trade war, whose first phase from 2018 to 2025 helped fuel rising Chinese manufacturing investment across the Global South.

Yet the analysis carries a warning. Just as firms in concentrated markets may collude rather than compete, great powers can coordinate, tacitly or overtly, to carve up the geopolitical market at others’ expense. President Trump has repeatedly stated his desire for a deal with China and signaled openness to Chinese investment in American manufacturing, prompting prominent international relations theorists to speculate about a grand bargain between the two countries. Given the increasingly personalistic nature of policymaking under Trump, exemplified by his abrupt about-face on sales of certain AI chips to China, such possibilities cannot be dismissed. In theory, an agreement that durably lowered bilateral tensions could reduce both sides’ incentives to trade technology for political support in the periphery, effectively transforming oligopoly back into monopoly and stripping third countries of their leverage.

The consequences of such collusion would not be catastrophic relative to the post-Cold War status quo, but Minnich emphasizes that this status quo was dire for much of the developing world. According to United Nations figures cited in the study, between 1990 and 2022 lower-middle-income countries’ share of global manufacturing value-add rose only modestly from 5 to around 7 percent, while middle-income countries excluding China fell from almost 9 to under 7 percent, and low-income countries hovered near zero. China’s share, meanwhile, surged from 3 to 32 percent. Should the pattern of premature deindustrialization continue for another thirty years, the author warns, it would amount to a catastrophe for global development.

Fortunately for the Global South, a durable grand bargain appears unlikely, at least for now. Recent scholarship argues that lasting U.S.-China cooperation is most feasible when both countries face a common adversary and are led by pro-globalization domestic coalitions, neither of which holds today. Minnich adds a structural hypothesis: collusion is more sustainable when power is evenly balanced and stable, resembling the duopoly Boeing and Airbus enjoyed in commercial aircraft from roughly 2000 to 2018, and harder to sustain when power differentials are uneven and changing rapidly. The current U.S.-China balance of power fits the latter scenario, suggesting any attempted bargain would be unstable in the short to medium term, though a more even balance over time could eventually favor accommodation.

The study closes with a third, ironic possibility the author calls inadvertent collusion. The tariffs the second Trump administration imposes on the world outside China, combined with the uncertainty they generate, may lead firms to keep manufacturing in China rather than relocate to the United States or elsewhere, reinforcing Chinese manufacturing dominance and undercutting incentives to invest in and transfer technology to newly industrializing economies, as much as any formal deal might. Reports already suggest Chinese manufacturers are rethinking their Southeast Asian pivots. As with active collusion, this would likely be an unstable equilibrium, but inertia and path dependency are powerful forces, and the effects of even short-lived policies often outlast the policies themselves. For Minnich, the bottom line is bittersweet: great power rivalry will make the world more dangerous, yet insofar as it improves low-income countries’ access to and ability to bargain for technology, it would be a small silver lining to an otherwise fraught situation.

Subject of Research: The impact of U.S.-China great power competition and Trump-era geopolitics on technology transfer to the Global South

Article Title: Trump, U.S.-China competition, and the future of technology transfer

Article References: Minnich, J. (2025). Trump, U.S.-China competition, and the future of technology transfer. Global Public Policy and Governance, 5(4), 411-421. https://doi.org/10.1007/s43508-025-00125-9

Image Credits: AI Generated

DOI: 10.1007/s43508-025-00125-9

Keywords: technology transfer, U.S.-China relations, Global South, great power competition, oligopoly theory, industrial policy, Belt and Road Initiative, intellectual property, multipolarity, Trump administration, industrialization, foreign direct investment