Written by John West, Asian Century Institute
China has become a peer competitor with the US for a wide range of technologies, a remarkable feat for a country which was bereft of most modern technologies just four decades ago. And today, China is locked in a tussle with the US for global technological leadership.
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China was a technology power for most of its recorded history, and accounted for half of the world’s engineering inventions in the pre-Industrial Revolution period, writes Nigel Inkster in his new book, The Great Decoupling: China, America and the Struggle for Technological Supremacy. But China never developed a culture of science, and missed the Industrial Revolution. This meant that China was highly vulnerable when it came into contact with the industrialised West and Japan in the 18th century, with devastating consequences for the country. China would remain a technological backwater until its reform and opening-up launched by great leader, Deng Xiaoping, in the late 1970s.
Inkster, a veteran of the British Secret Intelligence Service, now at the London-based International Institute for Strategic Studies, offers a forensic history of China’s technological development. He argues that, somewhat curiously, it was the writings of American futurologist Alvin Toffler which helped China’s reformist leaders see the importance of information and communications technologies for promoting the country’s economic modernisation from the 1980s.
The burgeoning economic interdependence with the US provided a pathway to technological progress for China, writes Inkster. As China opened its economy, it attracted investment in low-end manufacturing activities, notably the assembly of mobile phones and computers. This enabled China to develop its technological capabilities, which were enhanced by returning Chinese talent that had been educated in the US and worked in Silicon Valley. The Chinese tech sector has also benefited from massive government subsidies, and the exclusion of American tech giants from the Chinese market, a theme that could have been better developed by Inkster.
“it was the writings of American futurologist Alvin Toffler which helped China’s reformist leaders see the importance of information and communications technologies”
As China’s capabilities grew, so too did its discomfit with its reliance on American technology, particularly after the revelations in 2013 by Edward Snowden. Thus, China has been promoting indigenous manufacture of technology, and the concept of cyber sovereignty, meaning the right for countries to police content transiting their sovereign space. Technology has also enabled China to become a major global intelligence power.
The election of Xi Jinping as General Secretary of the CCP proved to be a major event in China’s technological development, writes Inkster. Xi grasped the importance of technology. He set the goal of China becoming the leading global technology power in the world by 2035. China is very keen to reshape the world order in its favour, and is using its growing dominance in technology to shape global norms and standards in relation to how these technologies are employed. China’s vision is encapsulated in a phrase — “community of common destiny for mankind”, which is code for a China-led world order.
“China is very keen to reshape the world order in its favour, and is using its growing dominance in technology”
China’s rise as a technology power has put it on a collision course with the US which is very keen to maintain its global technological supremacy. Inkster argues that China’s technological rise is a “Sputnik moment” for the US. In recent years, the US has been pushing back against China, a policy led by the Trump administration and continued, for the moment, by President Biden. The US wants to constrain China’s ambitions and give US companies breathing space to catch up for 5G mobile telephony. After all, most of the fundamental technology for Huawei’s 5G is actually American.
The “Great Decoupling” is starting to happen, as the US tries to disentangle its very tight connectivity with China. The US is now denying China access to advanced components, controlling its technology investments in the US, and putting restrictions on joint research activities and Chinese students and migrants in America. The US has effectively banned Huawei and its 5G ambitions from the US, and succeeded in encouraging most Western countries to follow suit. But decoupling will be slow, and partial. As it results in less collaboration, decoupling will likely have an adverse impact on innovation in both countries. Decoupling has also created some difficult geopolitics, notably regarding Taiwan which has cornered the global market for the most high end advanced logic chips, which China can’t make and has no likelihood of making soon.
Who will win this technological competition?
The US enjoys the advantages of incumbency — it got there first. The US is ahead for most technologies and China is playing catchup. The US has much greater strengths in foundational science, which is still very much a weakness in China. But the US also has its own problems. It isn’t producing the educated people that it needs, so it has to rely on migrants. And while it’s been able to attract some of the world’s best talent, China will now be much less of a source.
“decoupling will likely have an adverse impact on innovation in both countries.”
For its part, China has shown remarkable ingenuity in the application of existing technologies. And China is now showing a capacity to innovate, despite the doubts of many Westerners. In some of the higher order technologies like quantum encryption China is clearly leading the global field. Perhaps China’s greatest risk is that political concerns about security could end up stifling entrepreneurship and innovation. The current government crackdown on tech companies is particularly concerning. At the same time, the Chinese party state is able to employ a “whole-of-nation” approach to technological development which is inconceivable in a liberal democracy.
Inkster concludes that it is far from certain that the US will win this technology competition with China. In any event, the US will need to accept that in some areas of technology China will dominate.
“But the US also has its own problems. It isn’t producing the educated people that it needs”
The strong point of Inkster’s book is that he traces China’s long term technological development in the broad context of China’s history, civilisation and evolving identity. This may also be the book’s shortcoming, as the narrative of China and America’s struggle for technological supremacy can get clouded by the volumes of contextual information. That said, this book contains a wealth of information on an issue which is critical for our understanding of US/China rivalry, and is an excellent reference for all scholars of Chinese studies and international relations.
Reference
Nigel Inkster. The Great Decoupling: China, America and the Struggle for Technological Supremacy
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