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President Biden portrays U.S. relations with China as a clash of values: democracy vs. autocracy.
But his rhetoric obscures the administration’s more pragmatic approach of cobbling together groups of countries to work jointly on technology. The goal is to stay ahead of China in semiconductors, artificial intelligence and other advances that are expected to define the economy and military of the future.
Preliminary conversations with U.S. allies have begun, though the effort is expected to take months, said senior administration officials.
The strategy has both offensive and defensive components. By combining efforts, the U.S. and its allies can vastly outspend China, whose research-and-development budget now nearly matches the U.S. The alliances can also coordinate policies to deny China the technologies it needs to try to become a global leader.
“We have a very strong interest in making sure that the techno-democracies come together more effectively so we are the ones who are doing the shaping of those norms and rules,” said Secretary of State Antony Blinken at his confirmation hearing.
The U.S. plans to organize different alliances depending on the issue, said a senior administration official, who called the effort a modular approach. The different groupings generally would include most of the industrial powers of the Group of Seven nations, plus some others. (The idea is sometimes called the Democracy 10 or the Tech 10.)
An alliance focused on artificial intelligence, for instance, might include Israel, whose researchers are considered leaders in the field. One involving export controls would probably include India, to make sure China is blocked from importing certain technologies. To encourage countries wary of offending China to join the alliances, the administration may not announce their participation, said the senior administration official.
Crucially, say those who have worked on the concept, the alliances must be flexible and avoid bureaucracy. “Creating another international institution will lend itself to big announcements without anything being done,” said Anja Manuel, a former Bush State Department official. “With technology, you have to be nimble.”
Among the areas considered ripe for alliances are export control, technical standards, quantum computing, artificial intelligence, biotechnology, 5G telecommunications and the rules governing surveillance technology. The list needs to be narrowed, say technology experts. Too many efforts would take too long to organize and overtax government officials.
Semiconductor technology is at the top of the administration’s list because computer chips power the modern economy. China is the world’s largest semiconductor market, but more than 80% of the chips—especially advanced ones—are either imported or produced by foreign companies in China.
Beijing has spent tens of billions of dollars over the past few decades to try to build a world-class domestic industry but still lags behind Western rivals. The Biden administration wants to keep it that way.
During the Trump administration, the U.S. worked with the Netherlands to block the sale of Dutch-made semiconductor manufacturing equipment to China’s largest chip maker, Semiconductor Manufacturing International Corp., which could have helped it produce leading-edge chips. The Trump Commerce Department also restricted sales of chip-making equipment to SMIC.
The Biden administration is following up on the curbs. In February, national security adviser Jake Sullivan spoke with his Dutch counterpart, Geoffrey van Leeuwen, about China and advanced technology, among other subjects, according to a White House statement.
Technologists describe semiconductor manufacturing equipment as a “choke point technology” because it is dominated by just three countries—the U.S., Japan and the Netherlands—making it relatively simple to restrict. A semiconductor alliance would also probably include big chip producers in Europe, as well as South Korea and Taiwan.
Along with restricting technology to China, the members could pool work on advanced R&D, including financing multibillion-dollar semiconductor manufacturing facilities outside of China.
A high-profile effort is bound to stir concern—and possible retaliation—from Beijing, which is working to lessen dependence on foreign technology. Beijing has used its economic heft to try to cow U.S. allies, including cutting off imports of wine and coal from Australia after Canberra pressed for an investigation into the origins of the coronavirus pandemic.
Adding Taiwan, a major semiconductor producer that Beijing regards as a renegade province, would add to China’s concern.
A U.S.-led semiconductor alliance “violates the principles of market economy and fair competition, and will only artificially separate the world and destroy international trade rules,” said China’s Ministry of Foreign Affairs in a statement.
Beijing has plenty of levers to pull. China is the world’s major supplier of so-called rare earths—minerals that are indispensable for producing mobile phones, electronics and military equipment. In 2010, China limited rare-earth shipments to Japan during a fight over ownership of islands in the East China Sea, although China denied it was involved in coercion.
China recently started a new round of regulations of rare earths and has quizzed foreign companies about their dependence on Chinese production, which some technology experts view as a warning shot. China’s Foreign Ministry said Beijing is “willing to meet the legitimate needs of all countries in the world as far as possible in accordance with the actual capacity and level of China’s rare earth resources.”
Mr. Sullivan has lauded past allied opposition to China’s rare-earth restrictions and Mr. Biden nominated the Obama administration’s point person, Katherine Tai, as U.S. Trade Representative.
Mr. Biden also recently ordered a study of U.S. dependence on foreign supply of rare earths. American officials have been working with Australia and other nations to boost production and create synthetic substitutes for the minerals.
Cutting off rare-earth exports would backfire by undermining China’s commercial reputation and encouraging mineral production elsewhere, said Martijn Rasser, a technology analyst at the Center for a New American Security, a Washington, D.C., think tank.
Technology alliances are worth the risk of blowback, he said. “Ultimately, the U.S. wants to reduce or eliminate Beijing’s ability to use coercion.”
https://www.wsj.com/articles/u-s-enlists-allies-to-counter-chinas-technology-push-11614524400
But his rhetoric obscures the administration’s more pragmatic approach of cobbling together groups of countries to work jointly on technology. The goal is to stay ahead of China in semiconductors, artificial intelligence and other advances that are expected to define the economy and military of the future.
Preliminary conversations with U.S. allies have begun, though the effort is expected to take months, said senior administration officials.
The strategy has both offensive and defensive components. By combining efforts, the U.S. and its allies can vastly outspend China, whose research-and-development budget now nearly matches the U.S. The alliances can also coordinate policies to deny China the technologies it needs to try to become a global leader.
“We have a very strong interest in making sure that the techno-democracies come together more effectively so we are the ones who are doing the shaping of those norms and rules,” said Secretary of State Antony Blinken at his confirmation hearing.
The U.S. plans to organize different alliances depending on the issue, said a senior administration official, who called the effort a modular approach. The different groupings generally would include most of the industrial powers of the Group of Seven nations, plus some others. (The idea is sometimes called the Democracy 10 or the Tech 10.)
An alliance focused on artificial intelligence, for instance, might include Israel, whose researchers are considered leaders in the field. One involving export controls would probably include India, to make sure China is blocked from importing certain technologies. To encourage countries wary of offending China to join the alliances, the administration may not announce their participation, said the senior administration official.
Crucially, say those who have worked on the concept, the alliances must be flexible and avoid bureaucracy. “Creating another international institution will lend itself to big announcements without anything being done,” said Anja Manuel, a former Bush State Department official. “With technology, you have to be nimble.”
Among the areas considered ripe for alliances are export control, technical standards, quantum computing, artificial intelligence, biotechnology, 5G telecommunications and the rules governing surveillance technology. The list needs to be narrowed, say technology experts. Too many efforts would take too long to organize and overtax government officials.
Semiconductor technology is at the top of the administration’s list because computer chips power the modern economy. China is the world’s largest semiconductor market, but more than 80% of the chips—especially advanced ones—are either imported or produced by foreign companies in China.
Beijing has spent tens of billions of dollars over the past few decades to try to build a world-class domestic industry but still lags behind Western rivals. The Biden administration wants to keep it that way.
During the Trump administration, the U.S. worked with the Netherlands to block the sale of Dutch-made semiconductor manufacturing equipment to China’s largest chip maker, Semiconductor Manufacturing International Corp., which could have helped it produce leading-edge chips. The Trump Commerce Department also restricted sales of chip-making equipment to SMIC.
The Biden administration is following up on the curbs. In February, national security adviser Jake Sullivan spoke with his Dutch counterpart, Geoffrey van Leeuwen, about China and advanced technology, among other subjects, according to a White House statement.
Technologists describe semiconductor manufacturing equipment as a “choke point technology” because it is dominated by just three countries—the U.S., Japan and the Netherlands—making it relatively simple to restrict. A semiconductor alliance would also probably include big chip producers in Europe, as well as South Korea and Taiwan.
Along with restricting technology to China, the members could pool work on advanced R&D, including financing multibillion-dollar semiconductor manufacturing facilities outside of China.
A high-profile effort is bound to stir concern—and possible retaliation—from Beijing, which is working to lessen dependence on foreign technology. Beijing has used its economic heft to try to cow U.S. allies, including cutting off imports of wine and coal from Australia after Canberra pressed for an investigation into the origins of the coronavirus pandemic.
Adding Taiwan, a major semiconductor producer that Beijing regards as a renegade province, would add to China’s concern.
A U.S.-led semiconductor alliance “violates the principles of market economy and fair competition, and will only artificially separate the world and destroy international trade rules,” said China’s Ministry of Foreign Affairs in a statement.
Beijing has plenty of levers to pull. China is the world’s major supplier of so-called rare earths—minerals that are indispensable for producing mobile phones, electronics and military equipment. In 2010, China limited rare-earth shipments to Japan during a fight over ownership of islands in the East China Sea, although China denied it was involved in coercion.
China recently started a new round of regulations of rare earths and has quizzed foreign companies about their dependence on Chinese production, which some technology experts view as a warning shot. China’s Foreign Ministry said Beijing is “willing to meet the legitimate needs of all countries in the world as far as possible in accordance with the actual capacity and level of China’s rare earth resources.”
Mr. Sullivan has lauded past allied opposition to China’s rare-earth restrictions and Mr. Biden nominated the Obama administration’s point person, Katherine Tai, as U.S. Trade Representative.
Mr. Biden also recently ordered a study of U.S. dependence on foreign supply of rare earths. American officials have been working with Australia and other nations to boost production and create synthetic substitutes for the minerals.
Cutting off rare-earth exports would backfire by undermining China’s commercial reputation and encouraging mineral production elsewhere, said Martijn Rasser, a technology analyst at the Center for a New American Security, a Washington, D.C., think tank.
Technology alliances are worth the risk of blowback, he said. “Ultimately, the U.S. wants to reduce or eliminate Beijing’s ability to use coercion.”
https://www.wsj.com/articles/u-s-enlists-allies-to-counter-chinas-technology-push-11614524400
