Competing with China

Dare I say, it is nearly impossible to find accurate and unbiased information about the current state of play in the global competition between the United States and China.

We seem to believe that we are competing on a moral playground, where we are going to win or lose depending on human rights abuses. China seems to believe that they are playing in a high tech arena, where technological prowess will out.

We regulate. We denounce. We sue. We arrest. We are self-righteous. We are moral beacons who excel at virtue signaling. We know that China is evil and that it does bad things to good people. So, we are confident that we will out. 

Our children are failing math and science, but our moral superiority will drag us across the finish line. What else is wokeness about?

Well, this competition has been ongoing for quite some time now. And we ought at least to evaluate the state of play. Yesterday in the Wall Street Journal Harvard professor Graham Allison and former Google CEO, Eric Schmidt offered up some data.

Our government has been tracking the game. And it has not arrived at very optimistic conclusions:

A new report on the “Great Technological Rivalry” from Harvard’s Belfer Center answers: Yes. The report isn’t alarmist but nonetheless concludes that China has made such extraordinary leaps that it is now a full-spectrum peer competitor. In each of the foundational technologies of the 21st century—artificial intelligence, semiconductors, 5G wireless, quantum information science, biotechnology and green energy—China could soon be the global leader. In some areas, it is already No. 1.

In some high tech areas, China is ahead of us. In some it is catching up. Do you find that to be reassuring?

In the world of production, when it comes to manufacturing the gadgets that now control our lives, China has moved largely ahead:

Last year China produced 50% of the world’s computers and mobile phones; the U.S. produced only 6%. China produces 70 solar panels for each one produced in the U.S., sells four times the number of electric vehicles, and has nine times as many 5G base stations, with network speeds five times as fast as American equivalents.

Did you catch that? It’s not just a rounding error. Nine times as many 5G base stations. Speeds five times as fast as those we have. By the way, the company leading the world in these activities is Huawei, China’s largest private company. Our response to it all was to have the chief financial officer of Huawei held under house arrest for three years. Explain to me what we gained by that action. Did we make friends and influence people?

As for artificial intelligence, topic that Kai Fu Lee has been warning us about for yo these many years, China is now either catching up or pulling ahead:

In the advanced technology likely to have the greatest effect on economics and security in the coming decade—artificial intelligence—China is ahead of the U.S. in crucial areas. A spring 2021 report from the National Security Commission on AI warned that China is poised to overtake the U.S. as the global leader in AI by 2030. U.S.-born students are earning roughly as many doctorates each year in AI-related fields as in 1990, while China is on track to graduate twice as many science, technology engineering and mathematics Ph.D.s as the U.S. by 2025. The Harvard report adds that China now clearly tops the U.S. in practical AI applications, including facial recognition, voice recognition and fintech.

When it comes to semiconductor manufacturing, China is catching up. It is fair to mention that South Korea and Taiwan lead the world in producing these things. Of course, we recently heard that Samsung is going to open a plant in Texas-- hopefully, they will find enough qualified technicians to do the job. You do not think that they are going to staff it with social justice warriors.

The U.S. still has a dominant position in the semiconductor industry, which it has held for almost half a century. But China may soon catch up in two important arenas: semiconductor fabrication and chip design. China’s production of semiconductors has surpassed America’s, with its share of global production rising to 15% from less than 1% in 1990, while the U.S. share has fallen from 37% to 12%.

As for 5G, the news is not good for us. Compared with China, we are technologically retarded. 

In 5G, the Pentagon’s Defense Innovation Board reports that China is on track to replicate the economic and military advantages America gained from being the global leader in 4G. China has installed 950,000 base stations to America’s 100,000. By the end of last year, 150 million Chinese were using 5G mobile phones with average speeds of 300 megabits a second, while only six million Americans had access to 5G with speeds of 60 megabits a second. America’s 5G service providers have put more focus on advertising their capabilities than on building infrastructure.

The same applies to robotics. Apparently, the president of China, a man who is routinely denounced as the sum of all evils, has been promoting technological innovation:

China also plans to extend its lead in robotics to sustain its position as the manufacturing workshop of the world. In May, Xi Jinping clearly stated his judgment that “technological innovation has become the main battleground of the global playing field, and competition for tech dominance will grow unprecedentedly fierce.” It is striking how successful China has been in meeting its ambitious technology targets.

The authors recommend that we organize a national response. It is a good idea. We generally support it. As for where we will find the human capital to lead this enterprise or even to participate in it, we can always do what Silicon Valley does. We can import it from China.

Unless the U.S. can organize a national response analogous to the mobilization that created the technologies that won World War II, China could soon dominate the technologies of the future and the opportunities they will create.