The tug-of-war for global technological supremacy is the most important of all US arguments with China. This emerged when the US attacked China’s Huawei: its 5G Broadband leapfrogged over American technology. Whoever controls the advances of science and technology (S&T) will have the key instruments for shaping the future of the world. The historian Niall Ferguson said in September 2019 that the world was at the beginning of a new Cold War: even President Trump could no longer stop it because trade, technological supremacy, and the future global balance of power are now inextricably linked. Studies to evaluate the relative strengths and weaknesses of the American and Chinese S&T systems are under way. It is important to distinguish between incremental and transformative innovations (the OECD called the latter “revolutionary” or “paradigm changes”). Incremental innovations are derived from earlier transformative innovations and can enter the market faster. Chinese innovations have been incremental more than transformative. It is the latter that revolutionize the way we produce, live, think and win (or lose) wars. America has been the father of the great majority of transformative innovations for the last hundred years: from the invention of air travel (Wright brothers, 1903) to space travel, from nuclear technology and genetic engineering to the accelerating informatics revolution. Today the world is at the cusp of major transformative breakthroughs. Artificial intelligence (AI) – the simulation of human intelligence processes by machines, especially computer systems – is one of the most important. Artificial intelligence could transform production, health, transportation, energy, war – everything. China’s official, ambitious strategy is to bridge the AI gap with the West and become the global AI leader by 2030. The following tentative list of American and Chinese assets and liabilities is derived from reflections on conditions for success in AI innovation, but it is valid for technological innovation in a broader sense.15
The US, with its elite universities and large companies, remains the leader. China is catching up.
There was until very recently little special US government boosting of S&T as happened under the federal government after the Sputnik-scare (1957), but awareness of this shortcoming is growing rapidly and proposals to increase federal spending have been made. Chinese direct financial government support for S&T increased more than 30 times since 2000. There is also indirect, non-financial support.
The Innovation Eco-System:
The US system is heterogeneous, multicultural, and open. Challenges to hierarchy and traditions are normal. Informal networks in and outside of the workplace lead to cross-fertilization. The Chinese system is more homogeneous and less open. Challenging hierarchy is not encouraged. There are fewer informal networks.
Foreign Access to S&T:
The US is restricting access to some of the best (particularly Chinese) S&T graduates. China is sending students/graduates to the world’s best S&T centers.
High-Level Priority Setting for S&T:
When mistakes are made in the US they can often be corrected. In China, high-level priority setting works well, but when mistakes are made, they are very difficult to correct.
The US pool is smaller than China’s, but this is partly made up by the US ability to attract talent from abroad (now hindered by restrictions on foreigners). The Chinese pool is larger and mostly of high quality. Many in the US have underestimated China’s S&T potential and its quality (as they did in the past in regard to Japan).
Top Scientific Talents in AI:
The US has, by far, the largest pool of top AI talent of all countries. They deepen the scientific bases of AI. The Chinese top talent pool is much smaller, but the Chinese assert that top talent is not required for most AI (or other) innovations.
Public, Legal, Ethical Acceptance of Innovation:
In the American democracy, innovation is often delayed by public hurdles.
Some AI applications face problems: mass surveillance, robotic medicine, killer robots. China has no, or fewer, public problems. The state can control these.
Intellectual Property Protection:
The US regards intellectual property protection as essential. China has benefitted from intellectual property infringements and forced technology transfers, but its own innovation drive and US pressure are now compelling it to pay more attention to intellectual property protection.
The end result of these multiple interacting and counteracting forces and the balance between assets and liabilities are not predictable. Moreover, China’s technological advances have domestic and foreign consequences beyond the high-tech competition, which could feed back into the competition. With improving S&T, state surveillance of the Chinese people has become more extensive and censorship more restrictive. Surveillance is not a Communist invention. Across the centuries every Chinese dynasty has regarded surveillance and censorship as an essential guarantee of the peace and prosperity of its wide-spread population. Has China become more repressive since the 2008 Beijing Olympics because it feels challenged? But tech-savvy Chinese know how to undermine censorship, as happened temporarily during the coronavirus crisis. Technological progress cuts both ways. As to foreign impacts, high-tech and a suspected army of Chinese spies are blamed for extending surveillance widely abroad. Do the Chinese unwittingly extend their traditional governance principles to the world, or do they target the world as an exploitable adversary? Espionage, like intellectual property infringement, has conferred some trade advantages to China, but no strategic advantage. Neither can explain China’s economic rise. But these practices clashed with Western principles, raised prejudices and fears, and triggered a backlash.
In the end, the high-tech competition between China and the United States could lead to two global technology systems, with smaller countries being forced to choose between the two. No third country would be happy with such an outcome.