Microsoft’s LinkedIn unit decided to pull out of China, as widely reported in today’s papers. The New York Times calls a “move that completes the fracture between American and Chinese social networks.” The Wall Street Journal calls it the biggest retreat of an American technology company from China in years.
I’d say we’re still in the early stages of a tech decoupling, the full scope of which is not fully understood. China’s Xi Jinping is wiping out China’s private sector, which included very successful companies such as Alibaba, Baidu and TenCent. Those companies, and all their data, must now serve the interests of the Communist Party. I have not seen any published reports but I’m certain that Western tech companies operating in China are feeling the same kind of pressure.
In view of China’s ambition to leapfrog the United States and every other nation in terms of its technological sophistication, which has direct military consequences, the West has not yet gotten serious about controlling the sales of its advanced technologies, particularly semiconductors, as Dave DeNoon of New York University and formerly the Pentagon, advocated in this piece recently.
The most difficult piece of the puzzle is that America’s big tech companies are trying to play both sides. They believe they can be Xi’s best buddies, as Microsoft showed in training China’s top AI experts and sharing the source code of its Window operating system. Apple is notorously in bed with the Chinese party-state, which used Apple smart phones to track and monitor its Uighurs in Xinjiang Province. Amazon Web Services is incorporated in China as a Chinese entity, making it completely vulnerable to having its systems compromised.
We are not going to be able to staunch the flow of technology to China’s party-state until we stop the bleeding at home. Our IT systems have been thoroughly compromised by the Ministry of State Security. And the espionage in our laboratories continues unabated. The U.S. government may be about to grant $50 billion to the semiconductor industry and $200 billion to other technologies. But if the Americans don’t protect the new research, the ideas flow out the back door, straight to shadow laboratories in China.
So yes, the LinkedIn news is interesting, but it is not the final shoe to drop. For more, read A Grand Strategy: Countering China, Taming Technology, and Restoring the Media, available here.
