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Is Tech ‘Cold War’ between US, China Irreversible?

Nov 27, 2019
  • Junyang Hu

    Research Associate for U.S.-China PAX sapiens, One Earth Future Foundation

Deteriorating relations between China and the United States over information technology is one of the top concerns of 2019, as China’s emerging technology sector could be subjected to new export controls. Now, such under-the-table moves have been surfacing. From ZTE Corp to the “Review of Controls for Certain Emerging Technologies”-  a proposed rule by the Industry and Security Bureau on Nov. 19, 2018, and the recent Huawei saga, they are described as a prelude for all-out war in the technological sector. The term “tech cold war” is frequently used, being highly publicized and pinching the nerves of both the U.S. and China.

However, is this really a technological cold war between the two giants?

I don’t think so. The intensifying U.S-China technological rivalry, which we admit as a fact, still differs from the meaning of tech cold war. To understand, it is important to clarify the connotation behind the term “cold war.”

In the postwar world, the United States and Soviet Union flirted with nuclear Armageddon, the so-called Cold War over the decades was unlike any great-power rivalry seen before. It must be regarded not only as a contest for power but also a collision between the two evangelical ideologies. As Nick Bisley once commented, each side believed their respective ideologies — liberal capitalism and Soviet communism — represented universal and fundamentally superior ways of constructing society. By wooing those fighting for their independence and the newly free to join its side, the Soviet Union and the U.S. craved overwhelming superiority in global influence. As a consequence, the world was torn apart and divided into dueling blocs.

But if we look at the status quo in the 21st century, society is no longer on the same trajectory. We are currently facing a new world order characterized by fragility, temporariness, vulnerability and an inclination toward constant change. In other words, the world cannot simply be separated into two camps. Because of the complex interdependence of global players, along with the protean change in the balance of power, the U.S. cannot disengage from China or the rest of the world. Disputes about climate change, anti-terrorism and bilateral investment are common cases in point. For instance, Statistics of Rhodium Group indicates that, at odds with the trade stalemate, the investment of U.S. companies into China actually increased to $6.8 billion in the first half of this year, 1.5 percent more than in the same period over the past two years, highlighting the most significant growth in the high-tech industry. Similarly, cumulative Chinese investment in the U.S. reached $40.8 billion, 3.7 percent of total Chinese overseas direct investment. Between 2004 and 2015, the average growth rate of China’s investment in the United States was 58 percent, 14 percentage points higher than the overall 44 percent increase in China’s ODI.

To some extent, the case mentioned above also shows that in the technology sector, both sides are highly complementary. Visible progress has been made collaboratively in agricultural science and technology, clean energy, biomedicine, wireless communication technology and other sectors. The research of China-US Focus reveals that, on the commercial side, there are more than 130 U.S. research and development centers in place in Beijing, and the U.S. share accounts for about 36 percent of all foreign R&D centers in Beijing. And that is just one metropolis of China, not to mention Shanghai and Shenzhen.

On the other side of academia, the number of co-authored science and engineering papers between China and the U.S. has been growing rapidly over the last two decades. The proportion of U.S.-China co-authored papers to the total number of co-authored papers of the U.S. with all countries rose from 3 percent in 1995 to more than 13 percent in 2010.

Admittedly, Beijing is trying to develop its own tech ecosystem, leading some experts to warn of the bifurcation of the internet into Chinese and Western dominions. This growing competition highlights divergence in Chinese, EU and U.S. approaches toward technology and data regulation and putting pressure on the rules and norms of governing technology. It is substantially raising a request for all countries, and other multiple actors, to work together to establish guidelines for the use and development of sensitive technologies in the future, rather than dividing us.

Be cautious about the statement that China and the U.S. have fallen into a technological cold war trap. It is exaggerated and will push the countries toward the abyss.

This thought on emerging science and technology is mainly reflected in the confrontational cognition of different ideologies, the one-sided understanding of authoritarianism, the rising vigilance of China and the narrow understanding of artificial intelligence. It should also be noticed that the development of artificial intelligence would promote a balance of power and possibly the construction of a shared human community. These new trends in technology might actually boost detente and slow the negative perceptions in the international order.

Plus, we cannot rule out the possibility that certain factors might trigger a shift in the current hawkish U.S. policy toward Chinese tech. First, pressure will come from the U.S. commercial tech giants. A large number of U.S. enterprises are growing their presence in China to include R&D centers to reduce costs and improve the competitiveness of products. Google is an example. According to Wall Street Journal, Google’s investments in China this year have included $550 million for a 1 percent stake in local online retailer, along with investments in Chushou, a video livestreaming site, and Manbang Group, a truck-hailing company. If this transborder channel is blocked, it will cause the loss of billions of dollars to these U.S. companies. As that is the last thing they want, it is possible that those tech giants will endeavor to press and lobby the White House to adjust policy and patch things up with China.

Deep down, U.S.-China tensions are not about technological rivalry. There’s still hope that the escalation of tech rivalry is just part of U.S. trade war posturing and could be resolved as part of broader negotiations.

But China happens to be caught, unfortunately, between the dream of regaining its rightful place in Asia (not the world yet) and the fear that America will block its rise. For Beijing, similar situations will always occur. What it needs to do is to get prepared to exhibit a national image with more responsibility. By creating a full range of emerging technologies and actively engage in global governance, China is expected to drag itself and the whole world out of this vicious cycle. 

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