China’s high-tech rise sharpens rivalry with the United States
China’s high-tech rise sharpens rivalry with the United States

China’s high-tech rise sharpens rivalry with the United States

Threatening tensions: a screen in Beijing shows a virtual meeting between US President Joe Biden and Chinese President Xi Jinping in November 2021 © Kevin Frayer / Getty Images

As preachers of China’s rise to superpower status grow, Washington’s urge to disengage from its “strategic competitor” intensifies. But by 2022, the increasingly bipolar world that results from this fundamental dynamic will cause a host of geopolitical headaches for smaller powers and multinational corporations.

The second half of 2021 was marked by revelations of a sharp recovery in China’s strategic strength. Beijing shocked the Pentagon and the American intelligence community in July by firing one hypersonic weaponin a test that suggested the Chinese military could hit targets anywhere in the United States with nuclear weapons.

General Mark Milley, chairman of the US Joint Chiefs of Staff, reacted by saying the event was close to a “Sputnik moment” – citing the Soviet Union’s launch of an artificial satellite in 1957, which demonstrated Moscow’s growing prowess and intensified competition from the cold. war.

Milley’s comment is part of a pattern. In an article in early December, Graham Allison of Harvard University and Eric Schmidt, the former CEO of Google, argued that “China will soon lead the United States in technology.”

But as China’s technological know-how grows, so does the setback from Washington. In a recent example, the United States last month put the Chinese Academy of Military Medical Sciences and 11 affiliated biotechnology research institutes on a blacklist for export, allegedly for helping the Chinese military develop “brain control” weapons.

Exactly what such weapons entail remains unclear, but a senior U.S. official said China used new biotechnologies to develop future military applications – including “re-editing, improving human performance” [and] brain-machine interfaces ”. The head of the U.S. National Counterintelligence and Security Center, Michael Orlando, identified biotechnology as one of five key sectors in which Chinese players are trying to acquire U.S. technologies.

Force demonstration: Soldiers of the People's Liberation Army march past the Forbidden City in Beijing.  China's growing military capacity is causing unrest in Washington
Force demonstration: Soldiers of the People’s Liberation Army march past the Forbidden City in Beijing. China’s growing military capability is causing unrest in Washington © Bloomberg

Taken together, these developments show the depth of a rivalry between the United States and China that seems to characterize 2022. Not only is China’s rise to the leading heights of technology obvious in several sectors, but the dividing line between civilian and military use of technology is also becoming thinner. .

Xi Jinping, China’s leader, has no illusions. “Technological innovation has become the most important battleground in the global arena, and the competition for technological dominance will grow incredibly fierce,” he said last year.

As a result, momentum towards “decoupling” has intensified in both countries. U.S. investors have been banned from investing in about five dozen Chinese groups that have been blacklisted by the Treasury Department. Washington accuses them of being involved in a Chinese military-industrial complex that commits human rights violations against Uighurs and other ethnic minorities in the northwestern region of Xinjiang.

Beijing, for its part, has said that domestic companies must obtain approval before they can be listed abroad if they operate in sectors that are considered illegal by foreign investors. The move appears to throw a pallet of IPOs on US markets from Chinese companies, jeopardizing a fundraising path that had given 248 Chinese companies worth a total of $ 2.1 tn in May last year to list on US stock exchanges.

All of these strains come into play and get impulses from the biggest strategic bugbear between the two superpowers: Taiwan. The island 161 km off China’s southeast coast is zero for superpower rancor. China claims Taiwan as part of its territory and threatens to attack if Taipei declares independence. For the United States, Taiwan is a crucial ally in Asia – although Washington and Taipei do not have formal diplomatic relations.

Helicopters display the Taiwanese flag during the celebration of the island's national day in 2021

Helicopters display the Taiwanese flag during the island’s National Day in 2021 © LightRocket via Getty Images

Taiwanese forces participate in a military exercise. The island is a source of tension between China and the United States © NurPhoto via Getty Images

Last December, US Secretary of State Antony Blinken warned of “terrible consequences” in the event of a Chinese invasion. “We are committed to helping Taiwan develop and maintain the ability to defend itself,” he said, adding that no one wanted to see a conflict develop.

Away from geopolitics, China’s role in the world is changing in other important ways. For several years, China has contributed more to global GDP growth than any other country, and before the coronavirus pandemic hit, it often accounted for too close to a third of world growth.

But by 2021, China contributed only about a quarter of global GDP growth the real estate sector lost momentum, birth rates fell and debt levels rose. This headwind is unlikely to disappear in the near future. What is in sight now is a shift in the nature of China’s growth model: less reliance on real estate and infrastructure investment and greater reliance on high-tech manufacturing and consumer spending to create prosperity.

In this context, Beijing has put forward two major political mantras: common prosperity and dual circulation. Each of them is likely to be highlighted further this year and for several years to come.

Joint prosperity means an intention to raise the standard of living of about 600 million Chinese who “do not have”. Dual circulation leads to a shift towards greater self-reliance, primarily by locating China’s supply chain.

China’s place in the world is changing. From an international perspective, its growing power seems to create further rivalry with the United States and other Western powers. Meanwhile in this country, a growing growth profile, combined with a strong incentive to locate, can make the legendary Chinese market an increasingly difficult market for multinational companies to navigate.

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