“For years, Silicon Valley looked down on China tech and believed it was only copying. But today, there is awareness that China is innovating and getting ahead in certain tech arenas,” says Rebecca Fannin, author of “Tech Titans of China.”
Fannin further added:
“The US-China trade war is hurting both sides. China’s ambition is unstoppable to become a global leader in tech, trade war or not”.
The worst foreign-policy decision by the US of the last generation was the “war of choice” that it launched in Iraq in 2003 for the stated purpose of removing weapons of mass destruction that did not, in fact, exist. Understanding the illogic behind that disastrous decision has never been more relevant, because it is being used to justify a similarly misguided US policy today.
The decision to attack Iraq followed the illogic of then-US Vice President Richard Cheney, who declared that even if the risk of WMDs falling into terrorist hands was tiny – say, 1% – we should act as if that scenario would certainly occur.
Such reasoning is often guaranteed to lead to wrong decisions. So Far, the US and some of its affiliates are now using the Cheney Doctrine to attack Chinese technology. The US government claims that because we can’t know with certainty that Chinese technologies are safe, we should act as if they are certainly dangerous and restrict them.
Right decision-making applies possibility estimates to alternate actions. A generation ago, US policymakers should have considered not only 1% risk of WMDs falling into terrorist hands, but also the 99% risk of a war based on flawed premises. By focusing only on the 1% risk, Cheney and many others distracted the public’s attention from the much greater likelihood that the Iraq War lacked justification and that it would seriously destabilize the Middle East and global politics.
The world’s second-largest economy is already showing some good progress in its push on homegrown industries such as artificial intelligence and chips.
Council on Foreign Relations (CFR) said in a recent report:
“China is closing the technological gap with the United States, and though it may not match U.S. capabilities across the board, it will soon be one of the leading powers in technologies such as artificial intelligence (AI), robotics, energy storage, fifth-generation cellular networks (5G), quantum information systems, and possibly biotechnology.”
The problem with the Cheney Doctrine is not only that it decrees taking actions predicated on small risks without taking into the consideration the potentially very high costs. Politicians are invited to incite fears for hidden purposes.
Over 99% of Chinese web-users access the internet on their mobile devices, according to official government statistics. In the U.S. just over 92% of internet users access it on mobile, separate statistics from eMarketer show. That mobile focus in China has helped companies roll out products quickly and on a large scale.
And China’s rise is threatening America’s historically strong position in technology.
Eoin Murray, head of investment at Hermes Investment Management told CNBC’s “Squawk Box Europe” last week:
“We have a technology grip from the U.S. that is actually being torn apart by China at this point.”
The US leaders are again creating a panic over Chinese technology companies by raising, and exaggerating, tiny risks. The most significant case (but not the only one) is the US government attack on the wireless broadband company Huawei. The US is closing its markets to the company and trying hard to shut down its business around the world. As with Iraq, the US could end up creating a geopolitical disaster for no reason.
Huawei’s 5G equipment is low cost and high quality, which is currently at the forefront of many competitors, and already rolling out.
Its superior-performance results from years of considerable spending on research and development, scale economies, and learning by doing in the Chinese digital marketplace. Given the technology’s importance for their sustainable development, low-income economies around the world would be foolhardy to reject an early 5G rollout.
If the Trump administration “succeeds” in dividing the world into separate technology camps, the risks of future conflicts will grow. The US championed open trade after World War II not only to improve global efficiency and expand markets for American technology, but also to reverse the collapse of international trade in the 1930s. That collapse stemmed in part from protectionist tariffs imposed by the US under the 1930 Smoot-Hawley Act, which amplified the Great Depression, in turn contributing to the rise of Hitler and, ultimately, the outbreak of World War II.
The debate over Huawei rages in Germany, where the US government threatens to curtail intelligence cooperation unless the authorities exclude Huawei’s 5G technology. Perhaps as a result of the US pressure, Germany’s spy chief recently made a claim tantamount to the Cheney Doctrine: “Infrastructure is not a suitable area for a group that cannot be trusted fully.” He offered no evidence of specific misdeeds.
Chancellor Angela Merkel, by contrast, is fighting behind the scenes to leave the market open for Huawei.
In international affairs, no less than in other domains, stoking fears and acting on them, rather than on the evidence, is the path to ruin. Let’s stick to rationality, evidence, and rules as the safest course of action. And let us create independent monitors to reduce the threat of any country using global networks for supervising of or cyberwarfare on others. That way, the world can get on with the urgent task of harnessing breakthrough digital technologies for the global good.