The US-China technology race - to determine global leadership
An excellent article in the AFR on 20/3/2018 summarises some of the key things But first an observation: This technology race feels similar to the arms race between USA and the Soviet Union in the 1980s which led to the downfall of the Soviet Union which basically when bust in pursuing this race. I am not predicting that the loser will go bust in this race, but the winner will hold the keys to dominance in a range of technologies which are likely to determine economic power and dominance over the next century. So the race is important to win, and China has a singular focus (and the resources) to win it. Here are some key quotes:
The US and China are in a high-stakes arms race for technological supremacy. Technology and innovation will determine who will dominate the modern digital economy, cyber space and defence systems for the 21st century.
Though China was not involved in the deal (Broadcom takeover of Qualcomm), the Committee on Foreign Investment in the United States (CFIUS) warned Trump the gobbling up of Qualcomm could endanger America's ability to compete in developing cutting-edge 5G wireless networks against China's Huawei, probably the world leader.
Dinny McMahon, author of the new book China's Great Wall of Debt, says President Xi Jinping is directing tens of billions of dollars into new high-tech sectors such as semiconductors, robotics and electric vehicles to try to avoid the dreaded "middle income trap" that has impaled dozens of emerging economies transforming from a cheap-manufacturing economy. Artificial intelligence, 5G and revolutionary quantum computing are also high on Beijing's industrial play book – not just for economic reasons but also geo-strategic manoeuvring.
Alarm is rising among the defence and intelligence establishment in Washington that China's momentum in these technologies could give Beijing the upper hand.
China's deep public purse is funding much of the impressive domestic technological development, strategic acquisition of offshore innovators and blatant pilfering of foreign intellectual property. In contrast, US National Intelligence Director Daniel Coats warned last month America's unsustainable $US21 trillion – and growing – public debt was a risk to the country's long debt national security. A budget-constrained US relies heavily on the private sector, chiefly Silicon Valley, to continue to give it the technology edge. Arthur Herman, scholar at Washington's conservative Hudson Institute, worries China's $US10 billion investment in exponentially faster quantum computers could enable a "foreign creator to end America's dominance of the information technology industry and the global financial system".
The big problem for the US and Europe is that their homegrown 5G players have slipped behind the slick Huawei, a fact not lost at the most senior levels in the Turnbull government.
China is winning in the wireless technology that will not only enable a super-fast mobile phone network, but also underpin the speedy transfer of data to power the so-called "internet of things", driverless cars, industrial robots and medical equipment.