China

A report detailed the tech gap between China and the U.S. Then it disappeared.

A top Chinese think tank found that China might fare worse than the US from a tech decoupling.

Two puzzle pieces with the U.S. and Chinese flags.

“Both the U.S. and China will lose from ‘decoupling,’” the researchers wrote. “And at this point, it looks like China’s loss may be greater.”

Photo credit: Henrix_photos/Pixabay

China and the United States are in a race to develop the newest, hottest technologies of the 21st century as a technological decoupling looms. But the effects won’t be felt equally — according to a new report from one of China’s most prestigious think tanks, a full-blown tech decoupling will be even worse for China in the end.

The Peking University Institute of International and Strategic Studies (IISS) published its findings just days before the new year — China’s biggest holiday — and the beginning of the 2022 Beijing Olympics. The introspective report clashed with the festive vibes spreading across the country, as it concluded China will come out worse than the U.S. as tech competitions continue to escalate between the two nations.

“Both the U.S. and China will lose from ‘decoupling,’” the researchers wrote. “And at this point, it looks like China’s loss may be greater.”

The report was pulled from the internet within a few days of its publication, but by then, the text of the piece, titled, “U.S.-China Strategic Competition in Technology,” had already circulated widely on the Chinese internet. The IISS didn’t respond to Protocol’s request for comment.

The analysis assessed China’s technological competitiveness and weaknesses relative to the U.S. in three key areas where both countries are competing to see who will lead in the future: information technology, artificial intelligence and aerospace.

The researchers claimed that although China has made huge progress in catching up with cutting-edge technologies, and has even gained a leading edge in certain areas, its tech innovation still lags behind the U.S. in many fields.

“In the future, China may narrow the technological gap with the U.S. and achieve ‘autonomous control’ in some key sectors,” the report reads. “But China faces a long uphill battle surpassing the U.S. in tech.” The report was signed off by Wang Jisi, the head of IISS and a bigwig in international relations, according to an archived copy of the report obtained by Protocol.

The introspective assessment about China’s technological gap with the U.S. stands in stark contrast to the indisputably bullish messaging nationalist media and social media influencers have adopted in the past few years. And the conclusions are similar to those that U.S.-based researchers have drawn.

“I do think there is a small group of cool-headed Chinese scholars who take a realistic view on these critical issues, and some of them have direct communication channels to top leaders,” Xiaomeng Lu, director of Geo-technology at Eurasia Group, told Protocol. ”But their perspective is not necessarily in line with the political message tailored for the broader audience – which is more nationalistic and has a ‘feel good’ twist to it.”

IISS researchers acknowledged that China faces a critical shortage of talent to make integrated circuits, operating systems and industrial software. “In recent years, although Chinese firms have made breakthroughs in important and wide-ranging areas such as [making] 5G communication technology standards,” the report says, “their voices are limited when it comes to setting international technology and product standards in memory chips and automotive-grade chips.”

Information technology

IISS researchers said U.S. sanctions of Chinese telecommunications firms such as Huawei particularly have hurt China’s information technology sector. Business exchanges between Chinese companies not under sanction and the U.S. and other countries have also been hampered. “In contrast,” the report adds, “the direct impact of ‘technology decoupling’ on the U.S. IT industry is not yet evident at this stage.”

AI

China and the United States are “far ahead of” other countries in AI, according to the report. “The U.S. leads in computing power and algorithms, while China’s strength lies in big data,” the authors write. China has a comparable number of AI papers being published and cited, “But the U.S. has a clear advantage in original, groundbreaking research.”

Again, the authors find, China grapples with a lack of talent. Only 10% of the Chinese nationals who studied AI in the U.S. returned to work in China, according to the report, and the field so far hasn’t seen a clear trend of Chinese scientists returning from the U.S. due to worsening U.S.-China relations. That said, there’s an upside: While the overall exchange of scientific and technological talents between the U.S. and China has lost momentum in recent years, the AI academic community in the two countries remains open in sharing research results.

Aerospace

The U.S. is “the absolute leader” in space transportation, human spaceflight, satellite navigation and communications and deep space exploration, the Chinese researchers asserted. China, with an independent technology and equipment system, ranks in a second tier along with Europe and Russia.

“In space technology and military aviation, China has been able to independently develop a large and comprehensive technology system under conditions of near ‘technological decoupling’ from the U.S,” IISS researchers said. “However, in the civil aviation industry, which relies on market players and obeys commercial logic, China's disadvantage is obvious.”

IISS researchers suggested that to approach the so-called “tech war” with the U.S., China should encourage academic exchanges and international collaborations, continue to invest in R&D and build a solid talent pipeline for future innovation. “We should keep the gap in the lagging areas from being further widened, or narrow it as much as possible, and fight for dominant positions in the competitive emerging technologies,” the researchers wrote.

U.S.-based researchers studying U.S.-China tech tensions broadly agree with their Chinese peers’ conclusions. Matt Sheehan, a fellow at the Carnegie Endowment for International Peace, and Emily Weinstein, an analyst at Georgetown’s Center for Security and Emerging Technology, both seconded Chinese researchers’ concern about China’s lack of talent in key tech sectors. But it’s hard to come up with an overriding take on which country would hurt more from a tech decoupling, at least on the talent front.

“15 years ago, it was very clear. Nobody was worried about Chinese technology,” Sheehan told Protocol. “[A tech decoupling] would have hurt a lot of things, but it would have hurt China most. Today, I think it's very unclear, and it really depends on the industry.”

Lu, the Eurasia Group analyst, said the IISS piece is “one of the most comprehensive and meaty reports” she’s read about U.S.-China competition in AI and other critical technologies. The assessment of China’s AI research and talent lines up with what she’s heard from the AI community stateside, she told Protocol. “U.S. scientists created many open-source AI algorithms that their Chinese counterparts heavily rely on to build advanced applications,” Lu said. “Despite recent U.S. regulatory focus on AI, from the now-blocked TikTok ban to ongoing debate around putting more export control restrictions on AI, these fundamental technical architectures have remained open to Chinese developers.”

Lu also agrees with the Chinese researchers’ sober observation that though China has increasingly taken a forward-leaning posture on technology diplomacy, the lack of cross-agency coordination “points to Beijing’s uneven participation at international organizations and inconsistent messaging to outside stakeholders.”

As to why the IISS piece was removed only days after its publication, without an answer from IISS, one can only speculate.

“China is not afraid of admitting weakness publicly,” Weinstein told Protocol. “In this case, I would speculate that the piece was likely pulled out of concern that it would be weaponized against China, at least in terms of messaging … The Chinese government is likely very eager to keep up its image, particularly in the context of technology competition.”

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