China’s ‘techno-nationalism’ and the innovation war with the US

The race for supremacy is at the heart of Beijing’s US$1 trillion investment program to dominate the technology landscape

Jiang Jinquan is hardly known outside of China. But the new director of the Central Policy Research Office has revealed the depth of Beijing’s state-run model when it comes to winning the race for technological supremacy.

In a detailed glimpse into government policy, he talked candidly about the innovation challenges facing President Xi Jinping’s ruling Communist Party.

His views make compelling reading and illustrate to the rest of the world China’s idea of “sharing technology.”    

“[We must] rid ourselves of our dependence on foreign countries – especially Western countries – for technology, equipment, and components [in critical sectors],” he wrote in the influential Study Times.

Since Jiang is part of Beijing’s high-tech brains trust, his remarks will carry the CCP stamp of approval.

Major speech

They also contradict Xi’s address last week at the World Economic Forum aimed at an international audience. Speaking via a video link, he outlined a vision of an “open world economy” and “technological  cooperation.”

The reality is slightly different and Chairman Xi created it.

For his part, Jiang was simply setting out the key points of a major speech made by his boss to provincial leaders last month. It has yet to be officially released.

“At present, the United States is imposing a technology blockade over our country to significantly disrupt our external technology exchanges and cooperation. It’s an inevitable choice [for China] to seek a self-empowerment strategy in the technology sector,” he said.

But Beijing does not only want to rival major competitors such as the US, Japan and Europe, it plans to surpass them.

Driving force

At least US$1 trillion of government investment is being pumped into the high-tech sector in the next five years as part of the “Made in China 2025” program. The policy was rolled out five years ago and it has been the driving force in reshaping the country’s technology landscape.

Massive government spending has also blurred the lines between state and private companies, fused under the Party leadership.

By “its sheer size,” China “has an inherent edge.” The country “already spends more on research and development than Japan, Germany and South Korea combined,” according to the US Senate Foreign Relations Committee.

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“Looking ahead, the US and its allies must begin to confront the task of deterring Chinese coercion – both military and economic,” Lindsey W Ford, of the Center for East Asia Policy Studies, and James Goldgeier, of the Brookings Institution, said. 

“The US should [establish] new multilateral forums between European and Indo-Pacific allies, pooling innovation advantages to counter China’s growing technological influence,” they wrote in a commentary.

Moreover, the challenges should not be underestimated.

With a fusion of state and private capital, China is now at the cutting-edge of R&D in AI or artificial intelligence, robotics and quantum computing.

Critical technologies

To speed up the process, Central Policy Research Director Jiang has called for a nation-wide plan to develop critical technologies by building “national research teams.”

The initiative includes marginalizing overseas competition in the high-tech arena despite President Xi’s “opening up” mantra. 

Reading between the lines, the aim would be to utilize the approach which spawned “national champions,” such as Alibaba, Tencent and Baidu, by freezing out foreign firms.  

Preferential state contracts would also be used in a way that has helped Huawei and ZTE dominate the 5G sector, as well as Hikvision’s AI security networks.

Still, in a move to combat Beijing’s goals, there have been calls for the US Bureau of Industry and Security to be handed a new “mandate” in dealing with issues involving national security and technology.

‘Core mission’

“The Bureau’s mandate [has] to reflect a rapidly changing world and ideological challenges [posed by] China,” James Mulvenon, of SOS International, said about the agency linked to the Department of Commerce.

“As a core mission, [it] should begin by placing the interests of the US ahead of the near-term financial interests of Silicon Valley, Wall Street, and other multinationals, which are not always aligned with US interests,” he wrote in an analysis for War On The Rocks.

“[Also,] integrate the export control agenda into the domestic “Build Back Better” [policy of President Joe Biden’s administration] to revitalize the American economy and industrial base. The old view of export controls does not match the current global or technology environment,” Mulvenon added in an essay entitled World Divided: The Conflict with Chinese Techno-Nationalism Isn’t Coming – It’s Already Here.

Along with Jiang’s remarks, Mulvenon’s comments will further resonate with Biden’s policy wonks in Washington. They will also be carefully studied in Beijing.