It seems we are headed down the slippery slope of a technology dis-engagement between the United States and China. If you add up all the threads, it seems both governments are organizing themselves to prevent each other’s companies and enterprises from sharing too much technology or too much investment. The logic seems so powerful that I suspect newly elected President Biden will embrace at least some aspects of what President Trump has begun.
The Americans want “clean” communications networks, which implies they will have to build them to exclude Huawei, Zoom and TikTok (and maybe WeChat). Huawei already has built communications networks in dozens of countries, so the Americans will have to create a separate Internet that is walled-off or protected in some way. The latest news that the U.S. administration will block U.S. investments in entities supporting the People’s Liberation Army could be the beginning of something much bigger. In view of China’s “military-civil fusion,” every Chinese “civilian” entity engaged in semiconductors, cameras, AI, etc. will be suspect.
The Trump Administration has made extensive use of an “entities” list to choke off the flow of American-related technology to some Chinese companies and enterprises. The Chinese government is now said to be preparing its own “entities list” of American companies it does not want to obtain Chinese technologies.
I don’t think American technology company CEOs can stop this and I don’t think they understand what is happening. They’re still trying, desperately, to play both sides.
Microsoft, Intel, AWS, Apple, Cisco and others helped build the Great Firewall and have contributed mightily to China’s technological emergence and employ, directly or indirectly, hundreds of thousands of people in China.
The challenge for us is not to bust up or punish our tech giants but rather to subtly reposition them as part of the American technology sphere as it confronts a Chinese technology sphere. We need to gradually persuade them to become better USA team players. Microsoft, for example, is responsible for training some of China’s best AI scientists, according to the new book, China’s Quest for Foreign Technology. Threatening our tech giants with dismemberment would not create the right climate to get them to recalibrate their behavior.
This is an incredibly high-stakes set of issues and it will require true statesmanship to achieve just the right balance.
