National Review

Why China Is Winning the War for High Tech

Close up image of a CPU socket and motherboard. (Getty Images)
Close up image of a CPU socket and motherboard. (Getty Images)

"China Demonstrates Most Powerful Quantum Computer.” That was the headline from the Australian scientific journal Cosmos this July, which came with this subject line: “Google trumped as physicists set a new quantum computing record.”

The story told how China’s Zuchongzhi programmable quantum computer had surpassed Google’s best quantum computer in solving the kind of complex problem that would stump even the fastest supercomputers, such as factorizing large numbers. The announcement is one more indication that China is on track to achieve what every cybersecurity expert fears, and every politician outside Beijing should fear: the creation of a large-scale quantum computer that is able to break into every public encryption system currently in existence.

Controversy and skepticism met the Chinese claims of what is known as “quantum advantage,” just as Google took criticism when it made similar claims a year ago. But from the point of view of understanding China’s strategy with advanced technologies such as quantum computers, the claim is almost as important as any reality behind it. The truth is that China sees all these technologies, from quantum to AI and biotech, including advanced viral research, as tools in its bid for global hegemony — and for crushing the U.S. and its democratic allies under its wheels.

The other truth is that we do not see the world this way. Americans, along with most of our Western counterparts, still think of technologies like quantum and biotech as extensions of science, or perhaps opportunities for business enterprise. That assumption, laudable though it may be from an ethical and free-market perspective, has allowed America’s commanding lead in one aspect of advanced technology after another to erode, to China’s benefit. We are now facing a point where the lead may be passing permanently to China.

In August 2018 I published an article in National Review on how China and the U.S. were stacking up in this high-tech competition. I wrote: “What’s really going on is a struggle for the future not just of the U.S. but of the world, with China pushing for global hegemony and the U.S. belatedly pushing back. At stake is the future not only of the American economy but also of the economies of our allies in Europe and Asia.”

Where are we, nearly three years later?

One useful benchmark is how China is doing in the top five high-tech areas targeted for “strategic national science and technology projects” in its 14th Five-Year Development Plan, which President Xi unveiled this spring. The plan calls for increasing R&D spending on these and other advanced technologies by 7 percent per year from 2021 to 2025. Together with Made in China 2025 and China Standards 2035, the plan forms a clear blueprint for Chinese domination of science and technology in the 21st century — a blueprint the United States still lacks.

It is striking that the list fails to include one of the areas where U.S.–China competition has been keenest in the past three years, namely 5G wireless technology. That’s almost certainly because China thinks it’s won that contest. A March 2021 article by the Council on Foreign Relations’ David Sacks all but declared as much. It noted that the ban the Trump administration had pushed against Huawei, the telecom-equipment giant that was leading China’s 5G effort, in the end found only eight countries willing to join — compared with the 90-plus countries that have signed up with Huawei, including NATO members Hungary, Iceland, the Netherlands, and Turkey, as well as Saudi Arabia and the UAE. A principal reason why the United States has had trouble persuading countries not to use Huawei is that we haven’t offered a viable alternative that involves a full stack of 5G equipment from microchips to radio networks — something Huawei has offered for three years running.

The 14th Development Plan also doesn’t list supercomputers, a topic covered in my previous article. Here, too, the Chinese must feel like winners, since the latest list of global top-500 supercomputers puts China as the No. 1 owner of the world’s fastest supercomputers for the eighth time since November 2017, accounting for nearly 40 percent of all the machines on the list (the U.S. comes in at No. 2, at around 36 percent). But the real reason why supercomputers are off the list may be that China’s focus is already shifting to next-generation technology, starting with machine learning and artificial intelligence (AI).

In fact, AI heads the list of technologies China seeks to dominate in its Development Plan.

Last March the U.S. National Security Commission on Artificial Intelligence, headed by former Google CEO Eric Schmidt, warned in a report that China is poised to replace the U.S. as the world’s “AI superpower.” Schmidt himself added that the U.S. “is not prepared to defend or compete in the AI era.”

It was in 2017 that China adopted the New Generation Artificial Intelligence Development Plan, with the aim of becoming the center of global innovation with policy support, government coordination, and total investments worth $150 billion. As of March 2019, the number of Chinese AI firms had reached 1,189, second only to the U.S., which has more than 2,000 active AI firms. It’s not clear how many more companies have been added to the number, but most are focused on the kinds of AI applications that support China’s military and intelligence.

The second technology on the list is quantum. Although, thanks to U.S. companies such as Google, IBM, and Microsoft, we still hold a strong lead in quantum computing and quantum-computing patents, it is widely recognized that China dominates the field of quantum communications (i.e., using photon entanglement to encrypt messages between users) and now has more total patents across the full spectrum of quantum technology. A Scientific American article on July 15 of this year quoted Mitch Ambrose, a science-policy analyst at the American Institute of Physics: “It’s such a new problem for the U.S. to be facing. It was ahead [in quantum technology] for so long, and in so many areas, that it hasn’t really had to do much thinking about what it means to be behind.” The news about the Zuchongzhi computer’s prowess suggests the U.S. lead in quantum computing may be eroding as well.

Third on the list is semiconductors. While China still holds only 7.6 percent of the market for global chip sales, the Chinese government is making serious efforts to close the gap with the goal of reaching 70 percent self-sufficiency by 2025. Buoyed by a booming market — China produces 36 percent of the world’s electronics — and these government investments, a July 2021 Semiconductor Industry Association report found that China is poised to be increasingly competitive in some key semiconductor market segments.

The money being poured into China’s semiconductor effort is staggering. China’s National Integrated Circuits Industry Development Investment Fund (known as the “Big Fund”) was set up in 2014 with $21 billion in state-backed financing. A second round of government funding in 2019 exceeded $35 billion. “In addition,” the SIA report notes, “China has announced more than 15 local government IC funds for a total of $25 billion in dedicated funding to Chinese semiconductor companies. Combined with the National Fund, this amounts to $73 billion which is unmatched in any other country.” Combined with China’s $50 billion in additional government grants, equity investments, and low-interest loans, the total investment easily dwarfs the $50 billion the Biden administration says it wants to use to sustain our faltering domestic semiconductor industry, including the creation of a National Semiconductor Technology Center.

The fourth area on the list is brain science, or “brain–computer fusion tech,” as enthusiasts call it, which enables new neurotechnologies that have far-reaching implications for medical science and other advanced technologies, as well as national security. The United States and China are the biggest spenders in this sector. The U.S. BRAIN Initiative was started in 2013 under the Obama administration and includes plans for $6 billion of funding through the year 2025. The China Brain Project was announced three years later, along with the country’s 13th Five-Year Plan, giving an estimated funding of $1 billion through the year 2030.

That is a small amount compared with our BRAIN Initiative, and the difference is that China has a clearer focus on using brain–computer interfaces for military purposes as well as civilian use. The China Brain Project’s goals also more strongly align with the military rhetoric of the People’s Liberation Army, which hopes to use this emerging technology to achieve high-performance equipment systems from drones and robots to enhancing the human intelligence of their operators.

Even scarier is China’s focus on the fifth area on its list, namely genomics and biotech. Given the strong evidence that the COVID-19 virus came from a Wuhan bioresearch lab, and may have been part of China’s work on a bioweapon strategy, the fact that President Xi sees biotech as a major focus of research and development in the future makes one wonder whether COVID was simply a prelude to developing an even deadlier and more contagious super-virus as a bioweapon.

The point is that from code-breaking quantum computers and AI to semiconductors and brain–computer fusion, all these technologies have deep military implications. Chinese military leaders believe that such emerging technologies will inevitably be weaponized, often pointing to a quotation by Friedrich Engels: “Once technological advancements can be used for military purposes and have been used for military purposes, they very immediately and almost necessarily, often violating the commander’s will, cause changes or even transformations in the styles of warfare.”

If we want to know why China is winning the high-tech war with the U.S., and why the U.S. continues to lose ground in this high-stakes contest, the short answer is that China has discovered the secret of how the U.S. prevailed over its enemies during World War II, and then during the Reagan revolution: by investing in technologies that support its military to catalyze an economic and technological revolution. Just as our World War II mobilization led to the development of nuclear power, jet propulsion, and the first computers, so the Reagan revolution produced the innovations of the digital age, from fast and cheap microchips to the Internet. As commentator David P. Goldman has noted, “The Soviet Union folded in the face of America’s superior arms and entrepreneurial growth. China watched and learned.” China expects America to do a Soviet-style abdication when China finally dominates the high-tech field.

China has also been careful to funnel its funding into targeted research institutes with a clear strategic focus, such as the National Integrated Circuits Industry Development Investment Fund. The U.S. has no similar centers of gravity for funding and for implementing a long-term strategy. Instead, who gets funding and how much in AI, quantum, or semiconductor manufacturing is left to the vicissitudes of the budget cycle and who controls Congress and the White House.

China also enjoys a deep bench in STEM talent to draw upon for its national initiatives. Compared with the U.S., the numbers are discouraging. A recent Georgetown University Center for Security and Emerging Technology report predicts that China’s Ph.D. graduates will be nearly double those in the U.S. by 2025. In fact, 80 percent of Chinese Ph.D. grads are in STEM fields.

All in all, the picture is somber. I predicted in my article three years ago that China would overtake the U.S. in patent filings by 2020. China decided not to wait that long. The World Intellectual Property Organization, which oversees a system for countries to share recognition of patents, said China filed 68,720 applications last year while the United States filed 59,230. In fact, China first knocked the United States from the top spot two years ago in 2019.

China has drawn up a clear blueprint for victory and is deploying massive and targeted funding to win the high-tech war. We are doing neither. Unless and until the U.S. finds a way to mobilize the energies and resources that animated our World War II victory and our moon shot, and can turn around an American education establishment more obsessed with CRT than with STEM, China will continue to move ahead in that struggle, as the public wonders why we keep falling behind.

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