Advancing common interests
Sound global tech governance calls for US-China cooperation, end of anti-Beijing policies
The United States has continuously ramped up export controls and investment restrictions in a bid to slow down China’s technological progress. The relentless escalation of US tech pressure on China will be a drag on innovation for both countries.
For China, export controls targeting Chinese entities hinder their access to specific advanced technologies, materials, and equipment, impeding technological progress in related industries. Some of China’s high-tech products are being squeezed out of developed markets, reducing the profits and growth opportunities for Chinese businesses.
The uncertainty in the business climate has significantly reduced both Chinese investment in the US and the inflow of US capital to China. Chinese direct investment in the US has plummeted from $23.4 billion in 2017 to $3.2 billion in 2022. In 2021, US investors reached 426 deals with Chinese tech startups, with total funding of $87 billion. But in 2022, the numbers dropped to 283 deals and $46.3 billion respectively.
For the US, severing ties with the Chinese tech market and talent pool poses significant challenges for its tech industries and other sectors. In the field of artificial intelligence (AI), the US is highly dependent on Chinese talent. In clean energy, China has successfully reduced the manufacturing costs of solar and wind energy equipment, and plays an irreplaceable role in promoting a low-carbon economy and addressing climate change.
Erecting barriers to technology and capital flows to contain China reflects the US’ economic and technological nationalism and protectionism. The US has deliberately excluded competitive Chinese innovations from major world markets, forcing other countries to choose higherpriced and lower-quality products. Attempts to suppress China’s voice in the formulation of cutting-edge tech standards and rules create division.
The absence of US-China cooperation in the tech sector will increase the difficulty of global technology governance. Global technology governance can be divided into three aspects: governance of global issues related to technology, governance of the risks inherent in technological development, and governance rules for technological innovation. In the governance of technological issues, the lack of collaboration between the two countries impedes the effectiveness of relevant international mechanisms while weakening the impact of using their respective technological strengths to promote the resolution of relevant issues.
As for the governance of the risks involved in technological development, the ideological framing of technological issues can lead to delays in risk governance. From AI to biotechnology, many emerging technologies have already presented safety and ethical risks, necessitating discussions and strategies to be developed by major countries.
A competitive mindset may also lead to divisions in the governance of rules for technological innovation. The US’ efforts to rally its allies in international standards and international scientific and technological organizations to exclude Chinese representation may stimulate the formation of two separate systems in various aspects, such as technological concepts, standards, supply chains, and markets. Such actions lead to a reversal of globalization and the reduction of its benefits. As time goes by, emphasizing the competitive aspect of technology will have increasingly serious and far-reaching negative consequences. Therefore, it is necessary for China and the US to engage in indepth dialogue on the key issues as soon as possible. During the leaders’ summit in San Francisco, the two sides agreed to initiate negotiations to renew the China-US Science and Technology Cooperation Agreement and to establish a government-to-government dialogue mechanism on AI. These are both positives.
The technology ecosystems of China and the US are highly interdependent. The two sides still share broad common interests, which forms the basis for establishing a positive relationship for competition and cooperation in the tech sector. Both sides can make efforts in the following areas.
First, it is important to restore and expand communication channels, strengthen discussions among think tanks and scholars on strategic and directional issues in bilateral relations, and work toward restarting official strategic dialogues.
Second, both sides should focus on building their own capabilities, developing their comparative advantages, and avoiding disruptions to the international technology ecosystem. Once both sides choose not to deliberately exclude each other, more opportunities for cooperation can be identified.
Third, it is imperative to clarify rules and broaden the shared interests. In the economic and social application of technologies, the two sides can cooperate to some extent on cost reduction, mutual learning of business models, and market segmentation.
Fourth, the two sides should engage in dialogues to jointly address global challenges, such as climate change, environmental transformation, energy security, infectious diseases, and biodiversity protection, moves that will help the two sides build mutual trust. They can also hold discussions on the responsible application of tech to establish behavioral norms.
China and the US share a common responsibility for global technology governance. They should cooperate to jointly tackle the major technological challenges related to the future of humanity.