The World Bank has warned that technology decoupling and trade restrictions stemming from US-China tensions are hurting knowledge generation and innovation in both superpowers, posing a long-term threat to growth across Asia, reports the Financial Times. The deepening division between the world’s two biggest economies now poses “the most immediate challenge” in Asia-Pacific, according to the bank’s semi-annual economic update for the region released on Friday.
“Bilateral restrictions on technology flows and collaboration between large countries could reduce the global availability of knowledge,” the World Bank said, adding that empirical evidence showed the “adverse effects of recent restrictions” on companies in China and the US as well as their top trading partners.
The warning came as US-China relations have sunk to their lowest level since the nations normalised diplomatic ties in 1979.