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The Coming Technology Picture

Feb 07, 2023
  • Wang Jisi

    President, Institute of International and Strategic Studies, Peking University

1. Foreword

Advanced technologies have become the focus of strategic competition in recent years between China and the United States, with trends in their comparative strengths attracting broad attention. China has developed into an influential scientific and technological power. In terms of such fundamental indices as research paper publication and citation, spending on research and development, number of highly talented researchers and patent applications and approvals, China has assumed a leading role worldwide, even quantitatively surpassing the U.S. in a few subcategories. However, the U.S. still maintains critical advantages overall, and outmatches China in indices that reflect quality.

Since innovation is a matter of system engineering — with dynamic impacts from different levels of policy, production, academics, research and application — comparing some basic indices alone doesn’t suffice for  a full picture of the two countries’ comparative technological strengths. In-depth study of each industrial subsector is required.

This study considers three representative fields for analysis in China-U.S. competition: information technology, artificial intelligence and aerospace technology. These not only have dual importance — in science and technology and in economy and trade — but also directly involve China-U.S. interaction at the national security and strategic levels. Analysis in each field will be carried out from the angles of comparative technological strength, security topics, talent cultivation and competition, the setting of technology standards and technological decoupling.   

2. Information technology

China-U.S. competition in the IT field is mainly focused on such aspects as integrated circuits, information communications equipment, operating systems and industrial software. With integrated circuits, while the U.S. is dependent on foreign firms for such links as wafer manufacturing, it still boasts overall technological advantages. China is at a stage of rapid progress and has achieved full coverage of all integrated circuit products and industrial sectors. But Chinese companies — which are numerous but not strong (and massive projects overlap in some areas) — remain subject to external constraints in such basics as mask aligner equipment. Breakthroughs may be unrealistic in the near term.

In telecommunications technology, especially 5G, China has got a head start and enjoys certain technological advantages, yet it remains reliant on foreign suppliers when it comes to such high-end equipment as 5G radio frequency parts and high-speed photonic chips.

In the field of operating systems, the U.S. possesses core technologies and has obvious advantages in the market. Chinese operating systems still lack core competitiveness.

In industrial software, Chinese companies have obtained some market share in its domestic market, but they have always had trouble making breakthroughs in the global high-end markets. They lag far behind their American peers in design software. 

As IT is increasingly linked to security concerns, there has been increasing friction between China and the U.S. over network and data security. Chinese civilian network security has deteriorated and is at high risk of a technological blockade and cyberattacks. Considering the momentum of bilateral ties and domestic political conditions, the two countries’ worries about network and data security, as well as general mutual distrust, will further increase the intensity of technological competition.

In talent cultivation for such fields as integrated circuits, operating systems and industrial software, China suffers from a shortage of high-end and interdisciplinary talent. In recent years, Chinese governments at different levels have actively promoted the integration of industry and teaching. Multiple colleges have set up corresponding schools or specialties and made substantial progress in basic research, but the country is still behind the U.S. in such aspects as industry-education-research cooperation, as well as in creating a biosphere for startups.

As for technological standards, while Chinese companies have maneuvered breakthroughs in such broad and important areas as 5G tech standards and participated actively in the setting of international IT standards, their say in international standard-setting for such subdivision technologies and product segments as storage units, Bluetooth, and Wi-Fi remains very limited compared with their American counterparts.

Technological decoupling has a tremendous impact on the Chinese IT industry. At present, as the number of Chinese entities subject to U.S. sanctions continues to grow, such companies as Huawei have suffered frequent suppression by the United States. Global information infrastructure, even technological progress, has displayed a “dual-track” tendency. In such an atmosphere, some Chinese entities that are not sanctioned have also been influenced in normal business operations, as well as in cooperation and exchanges in the U.S. and other countries. 

3. Artificial intelligence

China and the U.S. are far ahead of the rest of the world in the field of AI. In basic research, China and the U.S. are closely matched rivals in the publication and citation of AI research papers, but the latter has obvious advantages in original, trailblazing research. In industrial technologies, as the original inventor of such core technologies as AI chips and machine learning, the U.S. has advantages in algorithms and computational capabilities.

Thanks to the open-source biosphere, there are limited gaps, and no generational ones, between China and the U.S. in software, modeling and algorithms. In applied technologies, based on its advantage of a massive database, China leads in such areas as face recognition, speech recognition, computer vision and diagnostic imaging. The U.S. has introduced machine-learning into biosynthesis and pharmaceutical R&D, and made significant breakthroughs. The U.S. also leads in the military application of AI technologies, increasing the computerization levels of weapons and equipment, as well as enhancing the application of big-data processing and machine-learning in intelligence work and operational decision-making.

As China-U.S. strategic competition escalates, the field of AI is increasingly subject to the influences of national security and politics. The U.S. raised AI to the level of national security and development, believing China constitutes a serious threat to long-term U.S. technological superiority. Meanwhile, the U.S. has linked AI to domestic political security. Some Americans believe foreign actors have taken advantage of AI to create disinformation and intervene in U.S. elections. More people criticize China for its application of AI surveillance technologies. All of this adds deeper ideological color to China-U.S. technological competition, making such topics as data security, information communication and public opinion monitoring even more sensitive.

In talent cultivation, the U.S. is the first-choice destination for global AI talent seeking education and employment, and it boasts a complete training regime. China began adding AI majors to its college curriculums only in 2018, and the number of professionals employed has been swelling. But the country has yet to form a complete talent-cultivation regime, and its talent pool for high-end R&D lags far behind the U.S.

The U.S. advantages in talent and R&D derive mainly from its open education and research systems, as well as its characteristics as a nation of immigrants. China is a major source of undergraduate AI talent reserves, but not a popular place to work, and most of China’s top AI talent pool has chosen to work in the U.S. after completing education there.

China and the U.S. continue wrangling over AI technological standards and norms of governance. The U.S. participates actively in international discourse, and strongly opposes any proposal by the Chinese side. It seeks to formulate a technology alliance of “democracies” to restrict the application and international promotion of Chinese AI technologies.

China has engaged in active science and technology diplomacy and takes part in international dialogue on AI ethics, governance and technological standards. However, owing to lack of coordination between government agencies, there have been divergences between Chinese voices and the extent of participation through different international platforms.

The Biden administration has basically sustained the decoupling measures of the Trump era. The U.S. National Security Commission on Artificial Intelligence has proposed targeted disengagement measures for guaranteeing U.S. national security, an open-source technological biosphere and intellectual property rights, with options including more precise export controls and investment scrutiny, reducing reliance on Chinese technologies and promoting international technological standards that conform to American values. Yet, despite these restrictions, cooperation and exchanges between Chinese and American companies and scientists have not stopped. 

4. Aerospace

In the realm of aerospace, China and U.S. compete in technology, security and industry. Technological competition is fundamental. In such aspects of space technology as transport, manned space programs, satellite navigation and deep-space exploration, the U.S. is the absolute leader. China has its own independent technologies and equipment systems, and is developing rapidly, but is still way behind the U.S.

China-U.S. competition in aerospace security is gradually gaining momentum. In military aviation, competition is focused on aircraft engines, missiles, missile defense and hypersonic weapons. In space security, based on the capability for situational awareness — which is connected closely to nuclear security — competition is concentrated on anti-satellite capabilities and is therefore highly complex and sensitive. The Trump administration formally established the U.S. Space Force, accelerated the militarization of space and took China as the imagined enemy. China actively presses ahead with its airspace integration defense undertakings, opposes militarization of space, along with Russia, and has clashed with the U.S. frequently at United Nations arms control meetings.

When it comes to such key aviation technologies as aircraft engine, avionics and aviation materials, the U.S. has all-around advantages. While China is advancing rapidly, it is in the second tier, along with Russia, Britain, and France. China-U.S. technological and security competition has been escalating, but the relationship to industrial competition is highly asymmetrical. 

Talent cultivation is the foundation of China-U.S. competition. American colleges lead the world in such fields as astronomy, space science and atmospheric science. Chinese colleges are only at the second and third tiers, but have some advantages in engineering because China has its “national team” as its backbone, with funds and technological resources highly concentrated on it. But in the overall amount of financial input and number of professional technological workers, the U.S. far outshines China.

The competitive relationship between China and the U.S.  and their respective capacity for standard-setting are highly asymmetrical. In commercial space undertakings, the commercial rocket launching business in the United States has no rival worldwide, and GPS accounts for more than 60 percent of global satellite navigation services. In civil aviation, the U.S. boasts the most technology patents. While China is rapidly bridging the gap, it has limited core patents, and even fewer of those have been transferred into marketable technologies.

The U.S. also wields tremendous influence on the international civil aviation organizations that set global civil aviation standards. However, China’s Beidou navigation system and civilian drone industry have made impressive progress, with a rapid increase in international market share. The Chinese company DJI has even become the world’s No.1 civilian drone maker, and has the potential to become an industry rule-maker. 

Owing to restrictions by such factors as the Wolf amendments, technological decoupling has more or less become a matter of fact between China and the U.S. in aerospace. China may develop an independent space and military aviation technology system, and by and large achieve technological independence. However, in the civil aviation industry, which follows market logic, China still relies on purchasing entire airplanes or core parts from Western countries. Because of the restrictions, it is difficult for Chinese firms to get core technologies even by corporate acquisition.  

5. Prospects

The above analysis shows that China has been making rapid progress in a small number of sub-fields, even achieving a leading role in some fields, but its disadvantages in many aspects are also evident. The U.S. maintains comprehensive advantages in most fields and leads by great margins. Our study suggests this is a fair sampling of the contrast between overall Chinese and U.S. technological strengths.

Taking the U.S. as the bench mark, China has entered a phase in which it follows in most areas, advances shoulder to shoulder in a few areas and leads in an extremely small number of areas. The U.S. will continue to be the No.1 science and technology power in the world for some time.

China, which has long been “crossing the river by feeling the stones,” as an old saying goes, may approach or surpass the U.S. in more fields of technology and on key indicators, but it will find it very difficult to realize all-around transcendence. In reality, in different subsectors, the possibility of China surpassing the U.S., China continuing to lag and China and the U.S. progressing shoulder to shoulder may exist at the same time.

In the future, the U.S. will likely adopt a strategy of “precision decoupling” and “precision coupling,” taking advantage of its technology alliances to control the core technologies China badly needs — and without which it cannot realize self-sufficiency. It will likely relax export controls on industries where the two countries are basically at same level and on those with low technology and low added value.

Currently, independent Chinese innovation and U.S. precision decoupling/coupling may actually result in a trend of “two-way decoupling,” which will directly affect the two countries’ comparative technological strengths. The decoupling trend appears to be unstoppable. The two sides will need dynamic evaluations, adjustments and adaptations in the process. 

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