AI governance is a shared global challenge, and China and the U.S., as major AI powers, face new risks and challenges with Trump's return to the White House, making cooperation neither wholly pessimistic nor optimistic. A transactional "strategic stability dialogue" should be established to build trust, manage competition, rather than direct rivalry, and ensure transparency and rationality in AI governance despite rising tensions.
In the face of global challenges in AI, cooperation between China and the United States is particularly important.
—— Henry Kissinger, Former Secretary of State, USA
Artificial intelligence (AI) has become a major arena of competition between China and the United States, further complicating the already complex bilateral relationship. With Trump's return to the White House, theorists and practitioners hold divergent perspectives on the future of China-U.S. AI governance.
One optimistic view suggests that although Trump's team includes some hardliners and "hawks" on China, their focus primarily lies in the economic and military sectors. On AI security issues, it's believed that "China can have an honest dialogue with Trump" because his administration is more concerned with industrial development of AI and tends to simplify security risk issues. Also, the current U.S. federal government maintains cooperative AI governance projects with China. For instance, in November 2023, during the meeting held between President Xi Jinping and President Biden in San Francisco, both sides agreed to establish a China-U.S. AI government dialogue. The first dialogue successfully took place in Geneva, Switzerland, on May 14, 2024, sending a positive signal to the outside world about China-U.S. cooperation to strengthen global AI governance.
The other, more pessimistic view argues that China-U.S. negotiations surrounding AI are merely for performance and don’t touch on the substance of AI governance. The cooperation between the two countries remains at a crossroads. With Trump's return to the White House, the Republicans will continue their previous practices, suppressing China in areas of advanced technology like chips and semiconductors. China will also adopt retaliatory measures in response, making China-U.S. cooperation on AI governance potentially minimal. After taking office, Trump also announced that he would appoint an AI czar, mainly responsible for AI policy, national security, and industrial development, emphasizing comprehensive competition with China in the AI field.
In reality, both perspectives may be overly pessimistic or optimistic. On one hand, suppressing China's rise in AI has become a bipartisan consensus in the U.S., but China has accumulated practical experience and strategic preparedness. The Biden administration aggressively contained China's AI industry, exemplified by the $53 billion "Chip Act" to bolster the U.S. semiconductor sector. In contrast, the Trump administration has begun focusing on revitalizing the U.S. semiconductor industry through high tariffs on foreign AI chip manufacturers rather than domestic subsidies. This approach could drive companies like TSMC and Samsung to shift toward China's larger, more open market. Additionally, Trump's stance on Taiwan, accusing it of "stealing" U.S. semiconductor business and demanding more security payments, may strain U.S.-Taiwan semiconductor relations, benefiting China given Taiwan's critical role in advanced AI chip production. On the other hand, optimism about China-U.S. AI governance is unwarranted. Both sides recognize that controlling AI technology means reshaping the global order, and losing the strategic window in AI development would mean losing competitive dominance. Thus, tensions in the AI field will remain comprehensive and intense.
With Trump's return to the White House, the trend of the two countries vying for dominance in emerging AI technologies has intensified and will continue to do so, and there will be some new issues and challenges in China-U.S. AI governance. In combination with the "Prisoner's Dilemma” theory, the dilemma of China-U.S. AI governance mainly manifests as a second-order dilemma (see Figure 1).
Figure 1: The "Prisoner's Dilemma" of China-U.S. AI Governance
The first-order dilemma is that the U.S. AI policy has shifted from "hitting the brakes" to "stepping on the gas," prioritizing national interests at the potential expense of China and others. This reflects a first-order dilemma in game theory, where individual decisions to maximize self-interest can harm collective interests. While the Biden administration emphasized AI governance and regulation, Trump's approach focuses on deregulation and rapid AI development. Trump has already rescinded Biden's 2023 executive order on AI, which aimed to address risks like privacy and security, arguing that overregulation stifles innovation and disadvantages U.S. competitiveness.
In contrast, China's AI policy has consistently prioritized development over governance, adopting a "development first, governance later" approach. This shift from "asynchronous and heterotonic" competition under Biden to "synchronous and homotonic" competition under Trump means both nations may engage in direct, intense competition in AI sectors like autonomous driving and IoT. Consequently, both countries may downplay AI governance, adopting a laissez-faire strategy that fuels innovation but risks neglecting critical regulatory concerns, leading to heightened AI rivalry and reduced investment in governance.
The second-order dilemma arises as competition and mutual distrust between China and the United States hinder cooperative AI governance. Drawing from the prisoner's dilemma theory, this scenario highlights how individuals, while seeking to maximize their own interests, must also account for the reactions and strategies of others. This dynamic can create a cyclical dilemma: even if both parties recognize that cooperation would benefit the collective, the lack of trust and interaction prevents effective collaboration, ultimately harming global interests. AI risks are pervasive and affect all nations, necessitating global cooperation for effective governance. However, if China and the U.S. remain trapped in a governance dilemma fueled by distrust, it could destabilize the global AI system. Despite the internet and intelligent technologies promoting openness and inclusiveness, "camp confrontation" and Cold War mentalities risk spilling into the AI domain. This could result in the emergence of "parallel worlds," as some scholars suggest, where the U.S. and China lead separate, isolated AI systems. Such fragmentation would hinder scientific progress and economic growth, ultimately leading to a lose-lose outcome, akin to the adage, "There are no winners in a gunfight."
To address the second-order dilemma in China-U.S. AI governance, both nations must establish a transactional "strategic stability dialogue" mechanism. First, they need to identify shared interests in AI governance, such as economic revitalization, political achievements, and long-term strategic goals. Past failures, like the cybersecurity dialogue, highlight the importance of mutual understanding and avoiding self-centered negotiations. Second, a contract spirit of mutual respect and fair trade is essential. Both countries, despite fierce competition, share complementary strengths—China excels in AI applications, while the U.S. leads in research and development. This symbiotic relationship can foster cooperation rather than zero-sum competition. Third, they should maintain "dislocated competition" rather than resonating competition, leveraging their respective advantages while ensuring transparency in negotiations. For instance, China leads in AI patent applications, while the U.S. dominates in AI models. Finally, dialogue mechanisms must remain open, even amid bilateral tensions. Drawing lessons from Cold War-era U.S.-Soviet nuclear dialogues, sustained communication can build understanding and eventually lead to agreements, even without immediate trust. Small, incremental steps can pave the way for larger collaborations in AI governance.
