The Sino-American Technology Conflict

The Sino-American Technology Conflict
Talal Abu Ghazaleh

The technological war between China and the United States is in fact  a new cold war on a new battlefield, with the prize being no less than world domination in a sector that underpins every aspect of our modern day life. I have spoken previously about this war and how America is taking drastic steps to force Chinese submission, by trying to severely disrupt Chinese access to semiconductor design, intellectual property, manufacturing technology, as well as by excluding the Chinese from important semiconductor supply networks such as the Chip 4 alliance.

The US justification of such a harsh line is that Chinese technology is controlled by the state, with technology falling under the control, not just of the state, but of the military establishment specifically. For the US this means that Chinese tech functions are in fact a Trojan horse, allowing Chinese authorities to engage in undercover espionage of other nations by providing compromised technology products that are installed globally. This was the justification for the heavy-handed tactics towards Huawei which threatened the US telecommunications industry with its advanced 5G products. The resulting spate of accusations, arrests and espionage charges which seem to be tenuous at best, n are based on circumstantial evidence to limit Huawei’s further encroachment on US soil.

This is a clear case of double standards as the US has adopted exactly the same approach it accuses China of, for years having a strong link between military and civilian use of technology, with many innovations spawning from the military. Notably, this includes the Internet, imaging technology, GPS tracking, radar, satellites, robots, artificial intelligence and a plethora of other technological innovations which have found their way into the public domain, all of which can be attributed to the military. It seems to be that what is fine for the US to engage is unacceptable for others. Who are we to say that tech from the US isn’t laced with its own backdoors?

It is questionable how long the USA can adopt such a strategy by trying to control international networks, supply chains, other consortiums and play the blame game with China. The US is suffering from technology brain drain with fragile leadership in technological development. Federally funded research and development has fallen to 0.7% of GDP in 2020, compared to 1.9% in 1964. According to the World Bank, China on the other hand was spending 0.89% of GDP on research and development in 2000, which shot up to 2.4% in 2020. China is also producing more STEM PhD’s than the US which is fueling greater technology innovations.

The US needs more investment in technology research and development if it wants to survive the technology war. It needs more homegrown talent, greater onshore production of technology innovations, and it really needs to ramp up its game as it has fallen behind.

China however, holds vast amounts of data which gives it the upper hand in the development of AI systems which are rapidly becoming the go-to technology for all sectors, particularly with the recent public release of the ChatGPT AI application, showing the public for the first time what AI is capable of. Because China understands the weakness it has in the semiconductor sector it has already started to plug the gaps by investing heavily in domestic alternatives.

China is playing the technology long game and there is no guarantee the US will succeed if it continues with its short term assaults on the Chinese technology sector in the manner it has been doing over the previous years.