There can be little doubt (surely) by now that China is aiming to be the most powerful country in the world. Dreams that growing prosperity would make Beijing want to play nice have proved to be just that, dreams.
And no small part of China’s push toward that goal will be in the technological side. As Xi has put it:
Technological innovation has become the main battleground of the global playing field, and competition for tech dominance will grow unprecedentedly fierce.
It will, it has, and China is doing rather well at it. Just how well was set out in a recent report from Harvard’s Belfer Center, which is a grim, but essential read. Writing for the Wall Street Journal the other day, Graham Allison and Eric Schmidt noted that:
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.
I discussed that article and the report at some detail in the latest Capital Letter, at the end of which I wondered what the U.S. should be doing. Schmidt and Allison call for “a national response analogous to the mobilization that created the technologies that won World War II.” I wasn’t so sure:
Better precedents (for now) can be perhaps found in the steps taken in the U.S. after the Soviets took an early lead in space, and another in the public–private sector cooperation that worked so well with Operation Warp Speed. One thing, however, is abundantly clear (as has increasingly been acknowledged in Washington). Where China is concerned, there can be no room for business as usual.
Quite what no more “business as usual” should mean is an area of legitimate area of debate, but, where possible, stopping U.S. exports that can help give China a technological edge in areas that matter ought to be an easy decision to make. This report was, therefore, encouraging.
The Biden administration is considering imposing tougher sanctions on China’s largest chipmaker, according to people familiar with the situation, building on an effort to limit the country’s access to advanced technology.
The National Security Council is set to hold a meeting on Thursday to discuss the potential changes, said the people, who asked not to be identified because the deliberations are private. Agencies represented through their deputies will include the Commerce, Defense, State and Energy departments.
The proposal that’s being examined would tighten the rules on exports to Shanghai-based Semiconductor Manufacturing International Corp. If one proposal is adopted, companies such as Applied Materials Inc., KLA Corp. and Lam Research Corp. may find their ability to supply gear to SMIC severely limited.
Current rules specify that machinery “uniquely required” for making advanced chips can’t be exported. One proposal being considered at the meeting would change that to “capable for use,” which would include machinery that’s also used for making less advanced electronic components . . .
A related issue concerns American capital being used to fund Chinese technology, and so this was worth noting.
The Biden administration will place eight Chinese companies including DJI, the world’s largest commercial drone manufacturer, on an investment blacklist for their alleged involvement in the surveillance of the Uyghur Muslim minority.
The US Treasury will put DJI and the other groups on its “Chinese military-industrial complex companies” blacklist on Thursday, according to two people briefed on the move. US investors are barred from taking financial stakes in the 60 Chinese groups already on the blacklist.
The measure marks the latest effort by US president Joe Biden to punish China for its repression of Uyghurs and other Muslim ethnic minorities in the north-western Xinjiang region.
This week, SenseTime, the facial recognition software company, postponed its planned initial public offering in Hong Kong after the Financial Times reported that the US was set to place the company on the blacklist.
The other Chinese companies that will be blacklisted on Thursday include Megvii, SenseTime’s main rival that last year halted plans to list in Hong Kong after it was put on a separate US blacklist, and Dawning Information Industry, a supercomputer manufacturer that operates cloud computing services in Xinjiang.
Also to be added are CloudWalk Technology, a facial recognition software company, Xiamen Meiya Pico, a cyber security group that works with law enforcement, Yitu Technology, an artificial intelligence company, Leon Technology, a cloud computing company, and NetPosa Technologies, a producer of cloud-based surveillance systems.
The principle here is (clearly) the funding of technology that can be put to assist in the repression (and, by extension, genocide) of the Uyghurs.
Interestingly:
All eight companies are already on the commerce department’s “entity list”, which restricts US companies from exporting technology or products from America to the Chinese groups without obtaining a government licence.
Good.
Today’s chutzpah prize is won by Zhao Lijian, a Chinese foreign-ministry spokesman, who observed that “China has always opposed the US’s generalisation of national security concepts,” a bold complaint given the way that China is integrating its technological companies within its broader geopolitical strategy. The “harnessed capitalism” that is a feature of the Chinese regime — and was, of course, a characteristic of other fascist regimes in the past — is what it is.