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Beijing will come out of decoupling worse off than the US, say Chinese academics

China will suffer a greater loss than the United States from “tech decoupling” and trails its rival in key areas, Chinese academics have warned.

In a report published by Peking University’s Institute of International and Strategic Studies on Sunday, researchers compared the development of China and the US in areas of competition between the two, including information technology, artificial intelligence (AI) and space and aerospace technology.

“While the current US administration has not yet determined the boundaries of decoupling, certain consensus has already been formed in key tech areas such as chip manufacturing and AI,” the researchers led by institute president Wang Jisi said.

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“Industries that are still ‘linked’ will only be those that are low-tech or have low added value.

“On both technological and industrial levels, both China and the US will face loss from decoupling, and it appears that it would cost China more.”

The researchers said the US’ decoupling strategy would also involve the forming of an “alliance of tech democracies” to completely isolate China.

“This competition of political leadership that is tightly linked with countries’ capacities and international order has been very impactful in affecting the direction of the China-US tech comparison,” they said.

“This has also increased a lot of difficulties for China in importing key components from other countries, in gaining hi-tech technology and attracting talent.”

Tech rivalry is becoming a central element of geopolitical competition between the US and China, and researchers in both countries have offered assessments.

These assessments have also often been seen as an indicator of whether Washington’s tech-decoupling policies – stronger restrictions for sensitive American technology that could be exported or used by China – have been effective in blocking China’s target of becoming an independent “technology power”.

In December, the Belfer Centre for Science and International Affairs at the Harvard Kennedy School, forecast that in the next decade China, which had displaced the US as the world’s top hi-tech manufacturer, would gain on – if it had not already overtaken – the world’s largest economy in the 21st century’s foundational technologies, including AI, 5G, quantum information science, semiconductors, biotechnology and green energy.

However, in the report published on Sunday, Chinese researchers appeared to be more worried than their US counterparts about the pace of the country’s catch-up with the US.

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“China has taken the lead in some small areas, but also obviously lagged behind in others, which are in a vacuum and have hit a bottleneck,” the report said.

Researchers said the tech-decoupling between China and the US had been having a “huge impact” in the information technology industry.

“With more Chinese enterprises being sanctioned by the US, companies like Huawei being pressured by the US in the international market … the daily research and operations of sanctioned Chinese companies and institutions have been limited and many Chinese students find it difficult to plan their studies in the US,” the report said.

“In comparison, the decoupling has no apparent impact on the information technology industry in the US.”

China “lags far behind the US” in AI, with the country starting only three years ago to foster talent in the area while American universities have long cultivated such students.

While not detailing the source of the data, the report said only 34 per cent of the top AI “talents” in China had stayed in the country for work while 56 per cent had moved to the US. For Chinese nationals who studied in the US, 88 per cent remained there with only 10 per cent returning to China for work.

“It does not seem that Chinese scientists in the AI industry have been brought back to the country due to the worsening of China-US relations,” the report said.

Researchers noted that space and aerospace technology was the arena in which the two countries had the least cooperation and dependency. In aerospace and military aerospace technology, China has developed a comprehensive technology system.

While US aerospace technology was ahead of China’s – which was on a par with that of Russia and the European Union – there was no huge “generational difference” in their overall abilities, and they could even be considered on an equal footing in some areas.

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“However, China is at a disadvantage in the area of civil aviation that highly relies on the commercial market. China relies heavily on the US and other Western countries in the purchase of aircraft or core components,” the report out of China said.

Researchers concluded that China should open up academic exchange mechanisms, continue investing in research and development and opt for international cooperation and comprehensive systems to build talent to ensure the gap with the US does not get wider.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.

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