editorial China-US ‘tech cold war’ simmers

The post-war technological leadership of the United States was the result of massive investments in science and technology, education, and research and development. American preeminence in high technology industries, however, slowly diminished as other countries matched US investments in science and technology. By the late 1960s, the major industrial nations were sharing technology as never before.

Fast forward to the 21st century: An Australian think tank said China currently has a “stunning lead” over the US in the research of critical and emerging technologies across a range of sectors that include defense, space, and energy.

In a study partly funded by the US State Department, Canberra-based independent think tank Australian Strategic Policy Institute (ASPI) said China is leading the US in researching 37 out of 44 critical and emerging technologies across the defense, space, energy, and biotechnology sectors—including research of advanced aircraft engines, drones, and electric batteries.

The ASPI found that for a few fields, all of the world’s top 10 research institutions are in China, and they collectively generate nine times more high-impact research papers than the second-ranked country—which, in many cases, is the US. “In particular, China has the edge in defense and space-related technologies.”

The ASPI said China’s lead is the product of “deliberate design and long-term policy planning.” It said China’s research dominance in strategic sectors could have adverse implications for democratic nations. In the immediate term, the lead could allow China “to gain a stranglehold on the global supply of certain critical technologies.” In the longer run, China’s leading position could propel it to excel in almost all sectors, including technologies that don’t exist yet, the ASPI said.

The think tank added: “Unchecked, this could shift not just technological development and control but global power and influence to an authoritarian state where the development, testing and application of emerging, critical and military technologies is not open and transparent and where it can’t be scrutinized by independent civil society and media.”

The ASPI urged governments around the world to collaborate and invest more in research to catch up to China. It also recommended measures such as visa screening for visitors to research facilities to limit “illegal technology transfers” to China.

From Harvard Business Review: “Our studies show that since 2006 the Chinese government has been implementing new policies that seek to appropriate technology from foreign multinationals in several technology-based industries, such as air transportation, power generation, high-speed rail, information technology, and now possibly electric automobiles. These rules limit investment by foreign companies as well as their access to China’s markets, stipulate a high degree of local content in equipment produced in the country, and force the transfer of proprietary technologies from foreign companies to their joint ventures with China’s state-owned enterprises.”

For the US, the forced transfer of proprietary technologies that led to China’s growing advantage in cutting-edge technology represents a national security threat by undermining American military supremacy. That’s why the Biden administration announced export controls to cut off China’s access to advanced chips and semiconductor manufacturing equipment. The US also got its allies on board. In January, the Netherlands and Japan joined in the restrictions on exports of semiconductor manufacturing equipment to China.

Beijing, on the other hand, launched a trade dispute in the World Trade Organization over the US export controls. “We oppose hegemonism in science, decoupling, and breaking of industrial and supply chains. Politicizing scientific and technological issues, and using them as weapons for ideological confrontation harm the interests of the whole world,” said China’s foreign ministry spokesperson Mao Ning.

“Western democracies are losing the global technological competition, including the race for scientific and research breakthroughs,” the ASPI report concluded.

Will the US strategy to cut off China’s access to advanced chips and semiconductor manufacturing equipment succeed to block China’s rise in artificial intelligence, supercomputing, as well as AI-related military advancements? How will the China-US “tech cold war” be resolved?

Despite the two nations seeking better relations, analysts said the tech tensions will continue because both governments understand that leadership in advanced technologies, especially in generative AI, will determine success in the 21st century. The winner of that race will lead the global economy, and will enjoy the influence and power reserved for a global top dog.