Exploring the US-China tech war, including the effectiveness of US regulatory measures, China's pursuit of advanced technologies, the shift from decoupling to de-risking in US foreign policy, and the impact of US-China tech competition on the rest of the world.
US regulatory measures may not be effective in curbing China's ability to produce high-end semiconductor chips and proliferate its technology.
Chinese entrepreneurs are now more incentivized to develop and rely on the domestic technology ecosystem for business continuity due to restrictions on US technology.
Deep dives
Mood in China towards the US during Trump's presidency
During Trump's presidency, many Chinese viewed his ascendance with shock, bemusement, and dread. As time went on, the sense of dread grew due to escalating tariffs and regulatory actions imposed by the Trump administration, targeting not only Huawei but many other Chinese technology companies. The Chinese leadership and people felt less happy, trusting, and goodwill towards the US, perceiving an escalating rhetoric that made them feel besieged throughout the Trump years. The election of Biden did not substantially change this perception as Biden continued many of Trump's technology measures.
Impact of US restrictions on China's access to advanced semiconductors
The October regulations limiting China's access to high-end semiconductors and sophisticated equipment have had a substantial impact. While the exact extent of the impact is still unclear, Chinese companies are facing restrictions and are no longer able to do certain things as efficiently. However, the full business impact is yet to be seen as some Chinese companies have not yet figured out the actual consequences. The US government's goal is to slow down China's progress in AI processing, but the restrictions may not prevent China from meeting domestic needs and building up its domestic ecosystem.
Responses and perceptions within the Chinese tech community
The Chinese tech community has experienced a sense of shock and a realization that they can no longer depend on US technology due to the restrictions imposed by the Trump administration and continued by the Biden administration. Chinese entrepreneurs, educated in the US and familiar with American technology, feel uncertain about future business transactions and the stability of their access to advanced technologies. As a result, they are now more incentivized to develop and rely on the domestic technology ecosystem, not out of political loyalty or proving a point, but for business continuity.
China's technological advancements and the perception of smoke and mirrors
China's technological progress includes both genuine advancements and some elements of smoke and mirrors. While there is evidence of Chinese companies deceiving others in certain instances, it is undeniable that China has made significant advancements in various areas, especially clean technologies. China has become a major player in industries such as electric vehicles, solar technologies, and wind turbines. However, in terms of AI, there is a level of confusion and skepticism as China's progress in consumer AI has been limited. The effects of regulation and control on China's technological rise are still uncertain.
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Relations between the United States and China are characterized by growing competition and tension. This is true in a wide range of arenas, but particularly so when it comes to technology. US policy in recent years—from the move to keep companies such as Huawei out of US infrastructure to the CHIPS and Science Act enacted in 2022—is aimed at both preventing Chinese spying and containing China’s very ability to access high-end computing power. But where is US-China tech competition headed? In this episode—part of an episode swap with FP Live, produced by Foreign Policy—you’ll hear from Dan Wang, who explores that question along with Ravi Agrawal, Foreign Policy editor in chief. A visiting scholar at Yale Law School’s Paul Tsai China Center, Wang explains whether US regulatory measures are effective in actually curbing China’s ability to produce high-end semiconductor chips and proliferate its technology around the world. He also describes his pessimism about China’s long-term economic rise and his belief that the continued rapid pace of China’s technological development is not inevitable.