Why China has more to lose in the tech conflict with the US

qingdao A recent study from China lists the country’s weaknesses in technological competition with the USA – and apparently aroused the displeasure of government agencies. The investigation, which was published in the Wechat app at the end of January, was “deleted by the author” four days later, according to the app without further explanation. However, copies of the study are now circulating online.

Observers assume that the publication of such a detailed, self-critical analysis in the context of the Olympic Games was inconvenient for those in power in Beijing. After all, the state leadership has declared the games to be an exhibition of achievements in science and technology. “Each side has a lot to lose and will therefore hardly openly admit its own weaknesses,” commented the China Institute for German Economy.

In fact, the study deals critically with technological progress in China. Tenor: China is suffering from technological decoupling more than the United States. Both competitors would suffer losses on both a technological and industrial level, but “the costs for China are likely to be higher”.

In the course of intensified competition, competitors are attempting to achieve global market leadership with their own technological and industrial standards, which is leading to a deconcentration of international technology.

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In their study, the researchers warn that the United States could cut off China’s supply of core technologies and components “that China urgently needs but is unable to provide for itself.”
Cooperation will only continue to take place in industries “that have a low technological standard or low added value”, according to the conclusion of scientists from the Institute for International and Strategic Studies (IISS) at Peking University.

>>> Read about this: At the Olympic Games, China presents itself as a technology leader with self-confidence.

Her analysis compares the development status and dependencies in the strategically important technology areas of information technology, artificial intelligence (AI) and aerospace in the United States and in China. A speech by head of state Xi Jinping published in mid-January shows that the state leadership also sees a need to catch up: Despite the successes achieved, China’s digital economy is “large but not strong compared to countries that are large and strong in the digital economy”. It is growing “quickly, but not exceptionally”, Xi is quoted as saying in the important party magazine “Qiushi”.

The authors around the renowned political scientist and head of the IISS, Wang Jisi, attest to China’s remarkable catching-up in many technological areas. The scientists assume that the country could catch up in other areas and also become self-sufficient in some core technologies, “but there is still a long way to go before China has completely overtaken the USA,” says the analysis. There is also the danger that the People’s Republic will lag behind its big rival in the West, especially in key areas.
Specifically, the researchers compared the following strategic technology areas:

1. Information Technology

High-performance semiconductors are the Achilles tendon of the Chinese economy because they are the basis for many high-tech areas. It is true that the USA also depends on foreign companies for the supply of wafers. But without US technology, there are no high-performance chips. The Chinese telecommunications group Huawei felt this painfully after the US sanctions.

In addition to semiconductors, communication devices as well as operating systems and industrial software are the most important foundations for new information technologies and are thus at the center of competition between China and the United States, according to the study. With all types of operating systems, the US has a clear advantage and has key technologies such as the kernel operating system.

According to the researchers, US companies also occupy a leading position in most categories of industrial software. The same applies to the areas of biotechnology, agricultural technology, fine chemicals, medical equipment and engines for civil aviation.

Rocket launch in Florida

According to the study by the Chinese researchers, the USA is one step ahead of China in space travel.

(Photo: dpa)

In contrast, the authors of the study see China as the technological leader in fifth-generation mobile communications technology (5G) and research on the successor 6G. However, these are also dependent on key components such as high-performance chips.

2. Artificial intelligence
According to the study, China and the USA are far ahead of other countries in the field of artificial intelligence. America is clearly number one in AI chips and algorithms and has made significant breakthroughs in machine learning, biosynthesis and drug discovery.

On the other hand, China has an advantage in face and speech recognition, computer vision and diagnostic imaging. The reason: the huge amounts of data (big data) available in the country.

3. Aerospace
The Chinese researchers attest that the United States is still the absolute leader in space travel, satellite navigation and communications, and space exploration. However, China now has an independent technology and equipment system.

The USA is also ahead in the key technologies of aviation – engines, technology and materials. However, China is developing rapidly here and is in second place together with Russia, Great Britain and France.

The US has a clear military advantage in space and has long pursued a “space control” doctrine, which China feels threatened by. However, the dependencies between China and the USA in the aerospace sector are relatively low.

need to catch up on quality

Across the technology areas, the scientists found that China has caught up with or even overtaken the USA in terms of quantity of scientific contributions and patents. In terms of quality and originality, however, the USA continues to lead the way. In addition, the United States continues to succeed in attracting top international research and development professionals.

This also applies to young researchers from the People’s Republic: Of the Chinese who went to the USA to study AI, only ten percent returned home. The corona pandemic and the increasing anti-Asian attacks in the USA in this context have so far not changed that.

Independent of the now-deleted analysis by Peking University, a Chinese state think tank last month identified “deliberate decoupling of supply chains” as one of the top ten risks for China in 2020. This shows that Chinese scholars see partial disengagement between China and the western world as a realistic threat.

Meanwhile, Washington continues to restrict China’s access to strategic technologies like semiconductors. Just last week, the US tightened export controls for 33 other Chinese companies, including China’s chip supplier Shanghai Microelectronics (SMEE).

More: US widen sanctions against Chinese tech companies

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