China is Beating the US in Tech War
December 17, 2021
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by Stephen Kanyi

For a long time in the 90s, the world’s fastest-growing country that was China was known as the ‘global copycat.’ Like many developing countries at the time, their main strategy for rapid industrialization was imitation; just copy what the West has done but do it cheaply.

And it worked, almost too well. By imitating Western technology China was able to multiply its gross domestic product by almost 30 times in the span of just over a decade.

This rapid development lifted more than 700 million people out of extreme poverty and gave birth to a giant. At the turn of the century, China was well on its way to becoming one of the largest economies in the world. Today it is second and predicted to overtake the United States before 2030.

America however, still leads the world in a number of relevant sectors. It is, as aforementioned, still the largest economy in the world, has the world’s most fearsome military and more relevantly, still the global leader in technology.

Technology is the key to the future. Technologies such as AI and cloud technology have the potential to generate not only trillions of dollars in revenue but will power the next generation’s military. For China, becoming a global leader in technology is not just a desire but a necessity if they seek to secure their place at the top.

To do that, however, will require them to do something they have not done before, innovate instead of imitating.

Fortunately for China, the CCP recognized this early enough in the 2010s and embarked on another ambitious plan to be the global leader in these key technologies by 2030.

Rise of Chinese Technology

And in classic Chinese efficiency, the nation is well on the road to achieving this goal.

According to a new report by Harvard’s Belfer Center on the “Great Technological Rivalry” between the US and China, the latter has made extraordinary leaps in technological advancement that it is now a “full-spectrum competitor.”

The report compares the two giants performance in key areas of technology. These are artificial intelligence, 5G wireless, biotechnology, quantum information science and green energy, all of which China is at per with or has already surpassed the US as the global leader.

In telecommunication, for instance, China manufactures 50% of the world’s computers and mobile phones while the US produces only 6%.  Counterintuitively, even in green energy, where China is blamed as the top polluter, it leads in the production of solar panels; manufacturing 70 solar panels for each one produced in the United States. China also sells four times the number of electric vehicles as the US and has nine times as many 5G base stations as the United States with network speeds five times as fast as the American equivalents.

In artificial intelligence, arguably the technology bound to have the greatest effect on economics and security in the near future, China is well ahead of the US in relevant areas. A National Security Commission report on AI warned that China is poised to take the number one global spot by 2030.

For instance, while in the US the number of students earning PHDs in math, science and technology has remained constant since 1990, China is on track to graduate twice the number of students as the U.S by 2025.

The US still however still retains the dominant position in the semiconductor industry; a sector that has been a particular thorn in China’s side for a long time. Beijing felt the pinch of this particular weak point when Trump cut off the world’s largest smartphone manufacturer from chips.

And, despite investment by the government in the order of billions of yen, China is still unable to meet its demand for microchips which it relies on to fuel its extremely large electronics industry. China’s biggest chipmaker SMIC has been unable to meet demand since the country was cut off from U.S technology.

As a result, China has been forced to import much of their microchips, a fact they are not particularly proud of. Talking to the New York Times tech analyst Rebecca Arcesati said “I think they’re really worried. They know that without access to those technologies, they won’t be able to reach their targets.”

China wants to reduce its dependency on the world — not to reduce its trade and interaction but to ensure that it is not vulnerable to the kind of strategic blackmail against China that it has historically used against others,” said Daniel Russel, a former American diplomat who is now a vice president at the Asia Society Policy Institute.

And even here China is looking to solve its microchip shortage and with it a leap in technology with innovation and billions of dollars to back it. That investment is starting to pay off. This year eight of the fastest companies to reach unicorn status globally are Chinese. This is a pretty impressive feat considering they were ranked only 14th globally in 2020 for the most innovative countries.

Companies like Hisense a leading electronics manufacturer and Xiaomi which is now the second-largest smartphone manufacturer in the world are changing the old Chinese ‘copycat’ narrative. Using genuine innovation they are pushing the country to a new era of global technical domination.

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