Communist China seeks to overtake U.S. in new tech ecosystem
Mr. Xiao is an Internet of Things (IoT) technology scientist at a major Chinese Communist Party Internet cloud technology company. In his view, the mobile Internet era, dominated by U.S. technology and American companies, is a thing of the past.
“The cloud, cell phones and 4G are the spade and jeans of the 1848 American Gold rush era, the tools.” Mr. Xiao (a pseudonym) said in a telephone interview with the Voice of America, “This battlefield, the gold rush has also been hollowed out, the tools of the gold rush have also been panned, the battlefield is over.”
The wireless communications technology scientist, who requested anonymity, said the next “gold rush” in information and communications technology will be the era of the Internet of Things, and that the Chinese Communist Party will become the technological master of the Internet of Everything.
“These five things will be the battleground for the next five to 10 years, and the infrastructure for the next decade’s gold rush will be these five foundations. …… In this quadrant of five technologies, mainland China’s ecology is more complete than any other country in the world. any country in the world is more complete.”
Mr. Xiao’s Cloud Computing + IoT industry will become an additional engine of the CCP’s technological strength, and even the country’s overall economic momentum. In the draft outline of the 14th Five-Year Plan, the Chinese Communist Party authorities recently identified cloud computing, big data, Internet of Things, industrial Internet, blockchain, artificial intelligence, virtual reality and augmented reality as the “seven key industries of the digital economy”.
“The draft outline of the 14th Five-Year Plan proposes that by 2025, the value added of the “core industries of the digital economy” in mainland China will increase from 7.8% of GDP in 2020 to 10%, and the value added of the “strategic The value added of “strategic emerging industries” should exceed 17% of GDP by 2025.
The leadership of the Communist Party of China, in its recommendations for the 14th Five-Year Plan announced in November 2020, set the goal of “achieving major breakthroughs in key core technologies and entering the forefront of innovative countries” by 2035, and stated that it would target In the 14th Five-Year Plan, the goal of “achieving major breakthroughs in key core technologies and entering the forefront of innovative countries” by 2035 was set, and the goal was to target frontier fields such as artificial intelligence, quantum information, integrated circuits, Life and health, and brain science.
The strategic goal is obviously an important guideline for the CPC’s science and technology policy. Klon Kitchen, a fellow in science, technology and defense policy at the American Enterprise Institute (AEI), a Washington think tank, told Voice of America, “The CCP correctly recognizes that to effectively protect and pursue its interests globally, it needs to be the leader, if not the only leader, in several emerging technology industries …… Leadership in these industries will be essential if the CCP is to establish the kind of international influence they seek, and to leverage it.”
Facing the biggest threat since the Cold War? U.S. reintroduces industrial policy, spurred by China
In the face of the Chinese Communist Party’s ambition to become the world’s technological hegemon, the United States, which has always advocated a free-market economy, may come up with government-led measures rarely seen since the Cold War.
For a long Time, the term industrial policy has not been popular in the U.S. policy-making environment. Intervention in resource allocation by government force is seen as undue interference in the free market, and the investment of public funds in scientific research also falls into this category.
According to an analysis by the Council on Foreign Relations (CFR), a U.S. think tank, the U.S. government generally only pursues certain industrial policies in response to crises and external threats, such as the Roosevelt New Deal of the 1930s, the industrial mobilization of World War II, and the U.S.-Soviet space race during the Cold War.
According to Reva Goujon, executive director of strategic intelligence at Martin+Crumpton Group, an international strategic consulting and business development firm, as the Chinese Communist Party continues its policy of accelerated R&D investment and attempts to outpace the United States, how the United States responds with industrial policy is a more A turning point in policymaking that deserves more attention.
Speaking to Voice of America, Goujon said, “The Chinese Communist Party is spending heavily on its strategic technology goals, which naturally catalyzes the U.S. to increase R&D spending, enhance investment screening, and provide tax credits and other incentives to promote U.S. technology manufacturing and innovation.”
More importantly, she said, “we are seeing a shift surfacing in the United States – lawmakers and businesses alike are adapting to a new era of industrial policy and ‘big government’ and are increasingly recognizing that market forces alone are not sufficient to protect national security interests in an environment of great power competition .”
Upon assuming the presidency, Biden signed an executive order on Feb. 24 designating federal departments to conduct a 100-day assessment of global supply chains and potential U.S. vulnerabilities in key industries, including manufacturing and advanced packaging supply chains in the semiconductor industry, high-capacity battery industry supply chains for products such as electric vehicles, key mineral and strategic materials supply chains, including rare earths, and pharmaceutical and active pharmaceutical The supply chain related to pharmaceutical and active pharmaceutical ingredients.
U.S. National Security Advisor Sullivan also recently stated that competition in these areas requires “incremental, bold public investment by the United States to keep us ahead of the curve.
At the same time, cross-party congressional leaders have announced they are working together to draft legislation that would provide hundreds of billions of dollars in funding to defeat the Chinese Communist Party in key industries.
An analysis of the CCP’s 14th Five-Year Plan goals by the Congressional Research Service in January said that the CCP is prioritizing efforts to acquire foreign technology through unrestricted international access in order to develop its planned strategic technology priorities, such as partnerships in open technology and basic research, establishing R&D centers overseas, and attracting foreign experts to work in mainland China through talent acquisition programs.
The analysis suggests that the U.S. needs to be alert to the Chinese Communist Party’s intentions to gain access to U.S. open-source technology and basic research, and consider whether to strengthen export controls and how to secure the supply chain through trade policy and technology cooperation with allies and partners.
“The term ‘industrial policy’ carries a certain political weight,” said the American Enterprise Institute’s Cochin.
Cochin doesn’t think the U.S. is going to intervene in the economy on a large scale with a national effort like other countries do. But he said, “Sensible trade policy and coherent economic policy within the constraints of national security interests is something the U.S. will absolutely go to and can take advantage of.”
Gurung, an expert on strategic intelligence issues, stressed that the U.S. does not currently agree on how to use industrial policy.
She said, “There is general agreement among politicians on the need to compete more effectively with the Chinese Communist Party, but there is less unity on strategy. For example, under what circumstances would export restrictions and academic exchange restrictions be counterproductive to the U.S. Culture of innovation, market competitiveness and talent attraction? Even reworking the Trump-era rules to focus restrictions less on general consumer applications and more on end-use and end-user screening will take time.”
There is still a gap between the U.S. and China in basic research
Some analysts believe that the top leadership of the Communist Party of China, despite trumpeting its achievements in areas such as new weapons and artificial intelligence, clearly recognizes that its scientific base in key “neck” technologies is limited by the United States.
In order to truly achieve “self-reliance and self-improvement” in science and technology, the Chinese Communist Party authorities have placed a higher priority on basic research in the 14th Five-Year Plan: the average annual growth of R&D expenditure in society as a whole is more than 7%, and the proportion of basic research expenditure in R&D expenditure The proportion of investment in basic research to R&D expenditure has increased to more than 8%.
However, even though the CCP plans to increase its investment in basic research for several years, the overall investment level is significantly different from that of the United States.
Chinese officials say that the share of basic R&D investment in total R&D funding in mainland China will be 6.16% in 2020, or about 150.4 billion yuan ($23.1 billion), and project that this figure could reach 280 billion yuan ($43 billion) by 2025.
In comparison, the U.S. spent $97 billion on basic research in 2018, or about 17 percent of total U.S. R&D spending, according to a report by the National Science Foundation (National Science Foundation) in 2020.
However, the U.S. government’s investment in science and technology R&D as a share of GDP has stagnated for years, which has drawn long-standing criticism from domestic science and technology policy analysts.
Strategic intelligence expert Gurung said, “The Chinese Communist Party’s intention to increase R&D investment is closely tied to the U.S.-China struggle for technological dominance. While total U.S. R&D spending has long exceeded that of China and the rest of the world, the CCP’s R&D spending as a percentage of GDP has been rising on a steep curve since 1995, while U.S. federal R&D spending (as a share of GDP) has been declining and stagnating since the 1970s.”
In 2017, the federal government invested 0.6 percent of U.S. GDP in R&D, while the private sector invested 2 percent of U.S. GDP that year, according to the National Science Foundation.
Mainland China’s market attractiveness is undiminished but technology decoupling is inevitable
Mainland China’s technology environment remains highly attractive to U.S. tech sector practitioners. A survey of U.S. tech industry practitioners released March 15 by technology media outlet Protocol found that 60 percent of respondents support closer cooperation with mainland Chinese tech companies.
However, it seems imperative that the U.S. and Chinese tech supply chains decouple from each other. An assessment released last fall by the China Strategy Group, led by former Google CEO Eric Schmidt, said a return to the pre-Trump Administration “status quo” in U.S.-China relations “cannot and should not be a U.S. policy goal.
The report said the inherent tendency of the United States and China will inevitably lead to some degree of technology industry separation, and while the process may be fraught with tension and disruption, it is in the national interest of the United States in the long run.
A key point to understand is that the Chinese Communist Party itself is pursuing decoupling,” said the American Enterprise Institute’s Cochin. The CCP has ordered its own government departments and agencies to stop using U.S. IT equipment and is also rapidly developing its domestic technology base in advanced semiconductors and other areas. So whatever the U.S. wants to choose to do, the CCP will pursue a well-thought-out decoupling strategy that will have decisive implications for the future.”
Cochin said the U.S. is already aware of the “unacceptable risk of espionage and other supply chain disruptions” if the supply chain passes through mainland China, given the Communist Party’s military-civilian integration route, and the relationship between the Communist authorities and its industries.
The U.S. goal is to mitigate unacceptable risks while maintaining as much cooperation (with the Chinese Communist Party) as possible,” he said. What remains to be seen is how much cooperation is possible, which will largely be determined by the Chinese Communist Party and how it chooses to act.”
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