September 03, 2019

Welcome to the New Phase of US-China Tech Competition

The previous era entwined the two economies. This one is splitting them apart.

By Ashley Feng and Lorand Laskai

It came without a breaking news alert or presidential tweet, but the technological competition with China entered a new phase last month. Several developments quietly heralded this shift: Cross-border investments between the United States and China plunged to their lowest levels since 2014, with the tech sector suffering the most precipitous drop. U.S. chip giants Intel and AMD abruptly ended or declined to extend important partnerships with Chinese entities. The Department of Commerce halved the number of licenses that let U.S. companies assign Chinese nationals to sensitive technology and engineering projects.

Even as Washington debates the relative merits of decoupling technologically and economically with China, policymakers need to consider that the point may be moot: Decoupling is already in motion. Like the shift of tectonic plates, the move towards a new tech alignment with China increases the potential for sudden, destabilizing convulsions in the global economy and supply chains. To defend America’s technology leadership, policymakers must upgrade their toolkit to ensure that U.S. technology leadership can withstand the aftershocks.

Read the full article in Defense One.

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