On July 29, 2021 the Institute for Peace and Diplomacy (IPD) hosted ‘Geopolitics of Asia and Chinese Perceptions of Security in the Multipolar World,’ the third panel in its running series on U.S.-China relations. This event’s focus was on the geopolitics of U.S.-China technological competition and the prospects for managing economic interdependence.
Bijan Ahmadi, IPD’s Executive Director, shared opening remarks to begin the discussion.
The panel convened four distinguished guests, including:
- Rogier Creemers, Co-founder, DigiChina, New America and Stanford University and Assistant Professor, University of Leiden
- Paul Triolo, Managing Director, Global Technology Policy, Eurasia Group
- Steven Weber, Professor, U.C. Berkeley and Faculty Director, Berkeley Center for Long Term Cybersecurity
Rebecca Fannin, founder of Silicon Dragon Ventures, served as moderator.
Rogier Creemers opened the discussion by suggesting that an acute dimension of China’s technological catch-up is its intellectual challenge. Given the West’s post-Cold War victory, Creemers said that policymakers have been mired in hubris over conventions of market- and freedom-driven innovation. This attitude has “created an enormous blindspot.” He argued that liberal democracies have underestimated the policy competency of Beijing. Out of this lack of imagination, Creemers said that the West now has “this boogeyman running up at us from the shadows of the loopholes in our own narratives.”
Given this state of affairs, he suggested that the West is entering a period where the hangover from its rush into technology is now apparent. The inclination to regulate industry monopolies illustrates a backlash to the euphoria of earlier decades. Creemers offered the example of the EU and its self-imagined reputation as a regulatory leader. To this end, he argued that it is China that on many regulatory frontiers is “the only game in town.” This places Beijing in a “powerful position in terms of influencing decision making in other governments” and moreover in “a first-mover position the moment that it comes to global governance on these issues.” In this light, Creemers expressed his belief that the West has ceded the field of regulatory innovation to Beijing.
Speaking from the industry perspective, Paul Triolo shared a similar assessment of ‘regulatory lag’ and the gap between Beijing and Western capitals. He picked up on the theme of a technological Cold War and the acceleration of recent policies to decouple certain supply chains. Triolo said it was important to trace the origin of American alarmism to the outspoken ambitions of Chinese policy initiatives under President Xi. Triolo suggested that US misperceptions of the aspirational nature of these documents were potently mixed with concerns around military-civilian fusion. In his view, these tropes were “memes that have grown to be a part of what people call the Washington consensus” and have remained unquestioned into the Biden administration.
On some policy fronts, attempts under Biden to disentangle interdependencies with China are sheer inertia from the White House under Trump. On other matters, however, Triolo foresaw some of these ‘memes’ as having much greater staying power. He said that narratives about a “long-term struggle for these key technologies” and more fundamentally an exportable “techno-authoritarianism” will likely be taken up by Biden’s successors. Triolo stated that it was undeniable that China had an advantage in absorbing sensitive technologies due to the openness of U.S. markets relative to its own. He cautioned, however, that the U.S. has fallen into a tendency to overreact to Chinese capabilities and their promised trajectories in public planning.
Here, Triolo saw fit to highlight major policy decisions to expand US export controls, particularly over semiconductor technology. In his perspective, these were unprecedented moves in “the weaponization of supply chains” with implications that gave rise to today’s global chip shortages. On the geopolitical level, these actions had the knock-on effect of elevating Taiwan as a key node in technology competition and as a greater risk in the bilateral relationship as a whole. That said, Triolo was certain that Washington had “not really articulated what its China strategy is other than to continue a lot of the policies that were started in the Trump era.” An underlying factor is the deployment of export controls that were originally crafted for clear, Cold War-era security objectives. Triolo argued that neither of the past administrations have treated the definition of those objectives with the same clarity.
Steve Weber entered the discussion and questioned what the terminology of a ‘race’ intended to convey. He suggested that tensions over next-generation telecommunication networks were “a proxy for the competition over the control and use of data.” Framing 5G as a system of control or an enabling infrastructure would generate different policy demands and different assessments of what concern is key to policymakers. On the matter of U.S. strategy, Weber disagreed with Triolo. He suggested that Washington was adopting a “whole-of-government approach” to Chinese companies that is being strategized in “whole-of-society” terms.
Weber also returned to Creemers and the dogmas of the state-led economy’s relationship to innovation. In his mind, “the last decade has falsified that set of arguments” and presented the West with a “profoundly destabilizing and troubling conclusion.” He suggested that U.S.-China rhetoric on fencing telecom buildouts from one another was myopic. Neglected in this competition was the issue of development and – in particular – Beijing’s role in widening access to cost-effective infrastructure for other emerging economies.
At this point, Rebecca Fannin opened up the conversation to allow back-and-forth discussion and questions from the audience. Triolo disagreed with Weber’s openness to employing a Cold War analogy, stating that decoupling remains an unknown quantity and that inadequate data exists to predict its effects. More substantively, he argued that no one has truly examined whether or not Western markets outside of China have the means to support an alternative technological ecosystem without Beijing. Triolo suggested that it is a matter that “nobody has really asked to run the numbers on.” With the tech competition framed in a zero-sum mentality, Triolo expressed concern that the lack of empirical thinking has fed into a lack of strategy.
Creemers added that the conversation on decoupling had to be based on reality, not “expensive, think tank-approved slogans in the DC Beltway.” He reiterated that many of the hallmarks of American innovation would not have proliferated without interdependency with Chinese production. He noted that much of the talent and background engineering for U.S. technologies are tightly woven into niches undertaken by China. Triolo agreed, but also stated it would be no easy feat for China to accomplish its own wishlist for domestic innovation. Without relationships with Western firms, U.S. strikes on China’s supply chain pose “a real constraint” in the immediate term.
Weber contended that there was a “demonstrated willingness” on both sides of the Pacific “to unscramble a surprising percentage of the omelet.” Given this picture, he cast doubts on the optimism for cooperation. Triolo echoed this outlook, raising sentiments from China’s diplomats that have stated Beijing’s unwillingness to selectively collaborate if the “rest of the relationship is going to be confrontational.”
Fannin asked the panelists how technological tension would unfold in the event of greater internationalization of the renminbi. Creemers was of the opinion that Beijing’s commitment to currency control would create complications. Weber, however, observed that China was “looking for ways not so much to confront the dollar” but rather “to root around” it. Both he and Triolo viewed Beijing’s central bank digital currency as a genuine indicator that warranted attention.
Amid technological friction, much of the panel also agreed on the need to recognize the agency of third countries in the U.S.-China relationship. As China matures as an alternative supplier to emerging economies, so too will it continue to develop viable consumer innovations that will challenge Western competition in their home markets. On this note, all of the speakers warned that mistaken assumptions continued to endanger an accurate gauge of China’s innovation potential.
Johnsen Romero is a Policy Research Assistant for the Asia Program at IPD.
