‘Superpower marathon’: U.S. may lead China in tech right now, but Beijing has strength to catch up

The United States might be leading in some areas of its technology race with China — but experts warn against the world’s largest economy resting on its laurels, urging instead for cooperation with allies and shifts in domestic policy.

Alongside trade war developments between the U.S. and China, both parties have been embroiled in growing competition to dominate various fields of next-generation technology, such as 5G networks and artificial intelligence (AI). 

5G refers to the latest mobile networking technology that promises super-fast download speeds and the ability to underpin critical infrastructure. That’s one reason why it is seen as crucial technology for both countries. 

In the last few years, Beijing has laid out a number of plans it hopes will turn China into a world leader in various tech areas:

The China Standards 2035 blueprint is essentially the technical specifications and rules that define how many of the technologies that are in use everyday, like mobile networks, operate. Being able to influence what those look like could have wide-ranging implications for power Beijing wields in various areas of technology globally. 

“U.S.-China competition is essentially about who will control the global information technology infrastructure and standards,” said Frank Rose, senior fellow for security and strategy in the Foreign Policy program at The Brookings Institution, at a webinar earlier this month.

A recent report by Citi that studied AI competitiveness of 48 economies found that the U.S. still leads significantly. The other 47 economies included in the index would face “severe difficulties in catching up to the U.S.’s AI industry in 2020-30,” the report said. 

This was attributed to the U.S.’s strength, particularly in AI patents, investment and academic research. Citi said the ranking was not a surprise, given that major software companies are headquartered in the U.S.

The ranking was calculated by weighing five factors, namely: academic research, patents, investment, labor and hardware in the field of artificial intelligence.

However, the report also found that only China, ranked second behind the U.S. in the index, would be likely to “cultivate an independent strong ecosystem for the AI industry due to both economic and geopolitical reasons.”

China would still need to catch up in two areas, namely jet engines and semiconductor, according to Michael Brown, director of the defense innovation unit at the U.S. Department of Defense.

“So they’re (China) not quite there yet, but I think we can’t rest on our laurels,” he said at the Brookings Institution webinar. “I think they very much can compete, and that’s what makes me very concerned, if we don’t wake up and see what we need to do to compete.”

Even though many countries have invested efforts to boost their domestic biotech sector, China is the “only one whose scale could potentially … pose a threat to American pre-eminence” in biotech, said Scott Moore, director of the Penn Global China Program at the University of Pennsylvania, during the same webinar. 

China’s policy target is for biotech to account for roughly 4% of Chinese GDP by 2020, and in comparison, biotech makes up around 2% of the U.S.’s GDP, Moore said. 

Experts have pointed out that the U.S. could tap on alliances with other nations and re-orientate domestic policy to increase competitiveness.

“The U.S. and its allies comprise almost two-thirds of global R&D and there’s extraordinary ways we can try to leverage that pool of research and development and coordinate on shared priorities,” said Andrew Imbrie, senior fellow with the Center for Security and Emerging Technology at Georgetown University during the webinar. 

Investing in research undertaken by both the government and academia is a “proven strategy” from the Cold War era that can be used again in this current situation, Brown said. However, “the more important and more difficult strategy” would involve the “need to reform our business thinking, and our capital markets, to move away from short-term thinking, to be more long-term oriented,” he argued. 

He pointed to the short-term thinking that is ingrained in the business community in the U.S. — a result, he said, of measures including a focus on quarterly earnings, increasing short-term stock price, and shorter periods for holding stock.

In contrast, China takes a very long-term view, and sees technology and innovation as key to developing national capability as part of its overall national strategy, he said.

Short-term thinking is not the right approach if the U.S. is preparing for a “superpower marathon” with China, Brown said. “We have to reform this or we’re not going to be successful in competing with China.”