U.S. President Joe Biden meets with China's President Xi Jinping during a virtual summit from the Roosevelt Room of the White House in Washington, DC, November 15, 2021. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)
Photo: Mandel Ngan/AFP via Getty Images

Biden’s phantom tech cold war

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Good morning! The U.S. is turning up the heat in its cold war with China. But what happens next might be up to China to decide.

The chip cold war

The Biden administration is fighting a phantom technology cold war. In the past, under the guise of national security, the U.S. and others have deployed export control laws to try to prevent bad actor nations from obtaining key parts of weapons already in use today.

Now, the U.S. is turning its attention to technology that doesn’t yet exist. The recently unveiled measure to try to block China’s access to key chip tech is intended to blunt the country’s progress on still-emerging fields like artificial intelligence and quantum computing.

  • It follows other moves, like increased scrutiny of foreign investments in U.S. companies, as well as heightened attention on top Chinese businesses like TikTok.
  • Overall, the recent actions signal a more coordinated approach than the scattershot method of regulation previously employed by both Biden and Trump.
  • “All of these moving parts are integrated and increasingly synchronized,” said Scott Jones, a non-resident fellow at foreign affairs think tank Stimson. But “we are trying to develop controls for technologies that have not been weaponized,” he added.

The key question now is how far allies — like Japan, Israel, the U.K., and others — are willing to go to match the U.S.'s aggressive actions. And ultimately, there is skepticism over just how much of an impact Biden, as well as future White Houses, can have on their own.

  • Ever since China released its 2025 roadmap, which identified the technologies the country would invest in, political leaders around the world have increasingly used more dire talking points to warn about the negative consequences of the rapid expansion of China’s IT sector.
  • “We are [at] the crescendo of rhetoric,” said Jones. “But it remains to be seen what this will actually look like on the ground in other countries.”

It makes sense that the Biden administration and other world leaders are worried about the national security implications posed by China’s growing tech prowess. Especially so, given China’s sprawling surveillance apparatus and reports on how the country uses it to suppress its own citizens, coupled with the increasingly frosty relations with the West.

But there’s also an economic factor outside of national security that’s driving countries to act. Or, at least, use more intense language.

  • For the past decade, nations around the world have tried to prop up copycat “Silicon Valleys” within their own borders. It’s unlikely any of the burgeoning tech hubs ever rival the power and prestige of the greater San Francisco area. But emerging areas like AI and quantum, as well as areas of growing importance like semiconductors, are serving as an accelerator.
  • For example, semiconductors are poised to be at the heart of the major technological advancements of the next decade and beyond. It’s why the U.K., Japan, and others have passed their own Chips Act-like laws to prop up domestic chip production.
  • And countries like Austria and Denmark are pouring billions of dollars into quantum computing research, a still theoretical but maturing field that could one day obliterate classical computers and have a significant impact on the global balance of power.

China is providing a solid, if not convenient, talking point for backers that want to galvanize support from their respective governments to help advance such technology. But as more money is funneled into emerging areas like quantum, there are growing concerns that countries could increasingly use export controls to protect those investments.

  • The Russian invasion of Ukraine has shown that corporations and countries are willing to act quickly to limit trade and business dealings with nefarious actors.
  • But China is no Russia. And it’ll be much harder to convince other countries to take sweeping action against one of the largest and most lucrative markets in the world.
  • Still, “the U.S. does have a lot of control on its allies,” said Marina Zhang, an associate professor at the University of Technology Sydney’s Australia-China Research Institute.

Ultimately, none of this may matter. While it’s possible that the Biden administration could slow the maturation of China’s semiconductor industry, which remains quite nascent, China has nearly limitless capital to invest.

The U.S. just significantly ratcheted up the global tech cold war. All eyes are now on China’s response.


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