The Great Rewiring ahead: US and China battle for global technological dominance

The Great Rewiring ahead: US and China battle for global technological dominance
President Joe Biden speaks as he makes a statement at the South Court Auditorium at Eisenhower Executive Building February 10, 2021 in Washington, DC. President Biden made a statement on the coup in Burma. (Photo by Alex Wong/Getty Images)

The Biden administration’s tough stance on China, while leaving room for cooperation on issues such as global warming, is not so much a continuation of the Trump administration’s crude tactics of trade wars and name-calling as a complete rewiring of the US economy and international relations.

The Biden administration holds its first high-level meeting with China in Anchorage, Alaska, on Thursday 17 March, against a backdrop of growing fears that the two economic superpowers are heading into another Cold War. Has one already begun, as many in Washington believe?

The administration has signalled its intention to take on China as the two superpowers fight it out for global technological dominance. It is a battle that Biden’s National Security Adviser, Jake Sullivan, who will be at the meeting, has framed as between “authoritarian capitalism” and “market democracy”.

The administration’s tough stance on China, while leaving room for cooperation on issues like global warming, is not so much a continuation of the Trump administration’s crude tactics of trade wars and name-calling (“the China virus”) as a complete rewiring of the US economy and international relations.

Sullivan co-authored a seminal article in Foreign Policy magazine last year with Jennifer Harris, a fellow at the Roosevelt Institute, advocating the end of the neoliberal era – the ideology of limited government intervention in the economy that began under Ronald Reagan.

The paper argued for a return to the kind of industrial policy – government action to reshape the economy – that drove the US’s post-World War 2 boom. This they hope to achieve by focusing on “large-scale tasks like putting a man on the moon or achieving net-zero emissions” that require innovation across many different sectors. 

To take on China, it is believed, the US needs to become more like China – and start thinking long-term.

Biden’s massive infrastructure bill, due to be rolled out in the next few weeks, could be seen as part of this initiative, a once-in-a-generation attempt to “build back better” by fixing the country’s crumbling infrastructure through what is effectively a Green New Deal and spending billions on research and innovation.

The two geostrategic goals are clear: to combat global warming and to compete with China, but having China as a competitor makes it easier to sell formerly unpalatable stuff to the US public.

epa09070241 National Security Advisor Jake Sullivan speaks at a news briefing at the White House in Washington, DC, USA, 12 March 2021. EPA-EFE/JIM LO SCALZO

The US team at the meeting will be headed by Secretary of State Antony Blinken and Sullivan, and the Chinese team leaders will be Communist Party politburo member Yang Jiechi and Foreign Minister Wang Yi.

The race for technological dominance, especially in the fields of artificial intelligence and quantum computing, will be fought on a global battlefield – as we have already seen with attempts to keep Huawei out of markets and to limit its access to US technology such as high-end semiconductors. Last week Huawei was listed by the US Federal Communications Commission as a threat to national security, which indicates that the new administration is not going to ease up on China. This battle also involves global standards for a safe and open global system for technology.

While the major European powers have expressed hesitation about joining an alliance of “techno democracies”, countries closer to the sharper edge of Chinese power have banded together as the “Quads” – India, Japan, Australia and the US – a fledgeling security alliance dedicated to pushing back against perceived Chinese aggression and to preserving open trade in the Indo-Pacific region. 

Blinken was this week accompanied on a tour of key partners in the Pacific region, including South Korea and Japan, by Defence Secretary Lloyd Austin, which indicates that it was about more than diplomacy.

Tensions in the region have escalated. This is attributed by the US and its allies to a tougher line by China, especially in its own backyard, under Xi Jinping who became president in 2013.

During the last year, there have been a number of maritime confrontations off Malaysia and Vietnam as Chinese ships have adopted increasingly forceful tactics; Indian troops were killed in hostilities along their disputed border in the Himalayas; Chinese jets constantly overfly Taiwanese airspace; and US warships have been sent to patrol the South China Sea.

In an op-ed in The Washington Post this week, Blinken declared that the Indo-Pacific region is “increasingly the center of global geopolitics”.

In a departure from previous administrations, he made clear a willingness to hold China accountable for human rights abuses in Xianjxing – where some groups have claimed a genocide is under way against the Uighurs – and Tibet; for eroding autonomy in Hong Kong; and for threatening democracy in Taiwan.

After the US puts its cards on the table, what will be the response of China? That will determine how cold or hot the temperature goes.

The buffoonery of the Trump era was, in a sense, easier to parlay than a more strategic challenge from the Biden administration, especially if the US is able to pull together a set of allies.

For African countries, there is always the concern that they will get trampled when the bull elephants come out to fight. The first Cold War was a disaster that brought proxy wars, coups, assassinations and economic malaise to the continent.

But while there is concern about what the current tensions could escalate into, African nations do have bargaining power and there are advantages to having global players shower one with the gifts of soft power. Vaccine diplomacy for instance could speed up immunisation on the continent.

Furthermore, if the US and its allies succeed in “decoupling” – unwinding some of the global supply chains that go through China – it could create millions of manufacturing jobs in Africa.

If the Biden infrastructure plan proceeds, it will spur higher prices of commodities, adding to the scramble already under way for climate-friendly high-tech minerals such as cobalt, nickel, lithium and rare earth.

At the centre of the US’s newfound defence of democracy is a commitment to crack down on corruption, including offshore tax havens, those sinkholes in the global financial system in which billions of dollars are hidden or extracted from African economies and which undermine the global trading system.

The fallout from a new Cold War will be extensive and not all positive.

The greatest challenge for the US is to show the developing world that democracies (even imperfect ones like the US) represent a better pathway to economic and technological growth than the extraordinary efficiency and productivity of the Chinese system that has been on display since the beginning of the pandemic. That will prove no easy task. DM


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