By Doug Kelly, CEO of American Edge

China has surged ahead of America in 37 of 44 categories of critical technologies, a comprehensive new report finds, and in some cases China is approaching a near-dominant position in that technology. American policymakers at all levels need to act quickly upon these findings, as China’s technology gains could fundamentally shift geopolitical power and influence to the authoritarian nation and away from the United States.

The report, published by the respected Australian Strategic Policy Institute (ASPI), examined 2.2 million data points for nine strategically important technology categories. China has significant leads in advanced materials and manufacturing, energy, biotechnology, sensors, and certain elements of artificial intelligence (AI), while the United States leads in design and development of advanced microchips, quantum computing, and vaccines. The countries are roughly tied in the defense/space category. Disturbingly, the report notes that these gains have positioned China “to excel not just in current technological development in almost all sectors, but in future technologies that don’t yet exist.”

ASPI’s study is the latest in a series of reports that document significant Chinese technology and innovation gains. A Harvard University report found that China is well ahead of the United States in high-tech manufacturing and 5G, could soon beat the U.S. in quantum computing, and is also investing heavily in advanced weaponry and space exploration. A study from The National Security Commission on Artificial Intelligence found that China is poised to overtake the United States as the world leader in AI by 2030.

China’s Three-Part Plan For Global Technology Leadership

China’s gains are not unexpected. President Xi Jinping vowed to “win the battle” in core technologies against the United States and has engaged his nation in a relentless, decade-long effort. To make China the global technology and innovation leader, Beijing is executing a three-part plan to build up its domestic tech capabilities; steal what it can’t build; and make the world – especially the West – increasingly dependent on Chinese technology to gain geopolitical leverage. Details include:

  • Build Its Capabilities: China has invested trillions in developing its own technology and innovation capabilities including its “Made in China 2025” initiative to boost China’s advanced manufacturing capabilities, an “Internet Plus” plan to modernize and digitize the country, and a rolling series of initiatives in semiconductors, quantum computing, AI, and most recently, extended reality.
  • Steal Our Technology: Every year, China steals more than $500 billion in intellectual property (IP) from the U.S. The Cyber Corps, one of China’s most secretive units, has more than 100,000 hackers, language specialists, and analysts focused on conducting multi-year campaigns against critical U.S. firms, including high-tech targets, vaccine makers, pharmaceutical companies, and more.
  • Make The World Dependent on China: To increase its power, China seeks to make Western countries increasingly dependent on goods it supplies, including on its technology. In fact, in a 2020 speech, President Xi Jinping explicitly stated, “we must tighten international production chains’ dependence on China, forming powerful countermeasures and deterrent capabilities based on artificially cutting off supply to foreigners.”

Implications If China Wins The Tech Race And What We Can To Prevent That

The ASPI report warns that if China’s lead in researching new and emerging technologies is left unchecked, it could lead to a shift in global power and influence to the authoritarian state, where the development and application of strategic technologies isn’t open and transparent. It could also lead to China having a stranglehold on the global supply of certain critical technologies, and making the United States and our allies increasingly reliant on foreign platforms in areas such as national defense, critical infrastructure and communications technologies. These associated risks would be severe and are unacceptable.

So how do we prevent China from building an insurmountable technology advantage? The ASPI authors urge democratic nations to “pursue a strategic critical technology step-up” and collaborate to catch up to China. They lay out nearly two dozen policy recommendations, including increasing investments, establishing better visa programs to improve talent pipelines, and pushing through comprehensive tech legislation that accelerates innovation. Many of these, along with additional policy ideas, are found in the American Edge Project’s Economic Policy Agenda, released last year.

Lawmakers on both sides of the Atlantic must also stop targeting the American technology industry with onerous new regulations that would slow research and development, thwart innovation, and inadvertently hand China a lasting advantage. American tech companies and their products help advance democratic values across the globe and, as the Lexington Institute has argued, our private sector tech firms are an essential element in protecting American security and ensuring that the United States, not China, leads the world in innovation. ​​

It matters greatly which country builds the future. Will it be China, who sees technology as a tool for censorship, control, and surveillance? Or will it be America, who sees technology as a way to increase security, create new economic opportunities, and to advance democratic values? The world is counting on us to act and to get it right.