China and the race for technological supremacy

China’s rise to the top over the last ten years has been spec­tac­u­lar, espe­cially with regards to tech­no­logy. In many indus­tries, it would appear they are aim­ing for tech­no­lo­gic­al suprem­acy. Is this part of a grand strategy? Was it predictable?

On more than one occa­sion, the Chinese Com­mun­ist Party has been sur­prised by the con­sequences of their own policies. At the end of the Cul­tur­al Revolu­tion, when China star­ted its eco­nom­ic reform, the coun­try didn’t take into account the impact of a large cohort of edu­cated youth who had been sent down to the coun­tryside and came back to the cit­ies. Because of their “bad” class back­grounds, they couldn’t get gov­ern­ment jobs. Many became entre­pren­eurs. Nobody had factored this in, but over time we saw this entre­pren­eur­ship tak­ing hold.

China’s tech­no­lo­gic­al devel­op­ment was partly a haphaz­ard pro­cess, which the author­it­ies tried, if not to con­trol, to man­age. With ICT, the Chinese lead­er­ship proved to be very good, with a top-down view that cre­at­ing a free-mar­ket envir­on­ment would enable experimentation. 

The Party simply sat back and watched as com­pan­ies fought amongst each oth­er, with the most suc­cess­ful ones mak­ing it to the top, before pro­gress­ively mov­ing in to exer­cise con­trol over these entit­ies. The tech giants behave in a way sim­il­ar to what Shoshana Zuboff called “sur­veil­lance cap­it­al­ism”: anti-com­pet­it­ive­ness, abuse of con­sumer data. The Party is now work­ing on reg­u­lat­ing these com­pan­ies, for­cing them to leave space for new entrants and to stop exploit­ing their cus­tom­ers digit­al surplus.

There is a get out clause: the state can access all of this data whenev­er it wants. China is also col­lect­ing large volumes of West­ern data, stored in digit­al ware­houses around the coun­try, and private sec­tor com­pan­ies are pushed to sift through them to find inform­a­tion that could help the Party.

West­ern gov­ern­ments are still imbued with the idea that not all inform­a­tion needs to be pro­tec­ted. We are only begin­ning to real­ise that, aggreg­ated togeth­er with oth­er data­sets and ana­lysed through­out the fil­ter of arti­fi­cial intel­li­gence, data which in and of them­selves would appear innoc­u­ous can be very reveal­ing – in ways that we might not want them to be.

What kind of suprem­acy is China work­ing to achieve?

As China became a more con­fid­ent tech­no­lo­gic­al power, it began to real­ise that it could use its grow­ing cap­ab­il­it­ies to shape the inter­na­tion­al arena. In areas of cyber-gov­ernance and cyber­se­cur­ity, China has real­ised that if they can estab­lish their tech­no­logy stand­ards as the glob­al ones, they can then use their over­whelm­ing man­u­fac­tur­ing power and eco­nom­ic reach to become glob­ally dom­in­ant in key areas. This is what the USA did dur­ing 20^th Cen­tury and what we the Brit­ish did in the 19^th Cen­tury with tele­graphy. When you wire the world, it gives you a lot of influ­ence and power.

A key object­ive is to enhance the inter­na­tion­al accept­ance of China’s polit­ic­al and value sys­tems, hence provid­ing secur­ity for a Com­mun­ist Party that lives in con­stant para­noia. There is also the mil­it­ary dimen­sion. China has been work­ing hard to become a cred­ible com­pet­it­or to the USA and is on its way to achiev­ing this goal. It is indeed ahead in some areas of mil­it­ary tech­no­logy such as hyper­son­ics. There is also a huge advant­age for China in terms of intel­li­gence as it rolls out its digit­al “Silk Road,” which is a sub­set of a much wider glob­al strategy. 

While Rus­sia has con­sid­er­able cyber strengths, nobody is going to buy a Rus­si­an oper­at­ing sys­tem or a Rus­si­an com­puter. Though Rus­sia has been act­ively think­ing about issues of cyber secur­ity and cyber gov­ernance, it is China that, through its dom­in­a­tion and abil­ity to com­mer­cial­ise this tech­no­logy, is much bet­ter placed to make the weath­er in these areas.

How is the West reacting?

It is now an art­icle of faith amongst the Chinese lead­er­ship that the USA is bent on pre­vent­ing China’s rise. This is a dan­ger­ous situ­ation. Mark Twain said, “his­tory doesn’t repeat itself, but some­times it rhymes”. If you look at Imper­i­al Japan in the 1930s, there are sim­il­ar­it­ies. Put bluntly, if China is backed into a corner and has no oth­er option, it may lash out.

Com­mer­cial integ­ra­tion used to be a factor of peace. But this trend has reversed. There has been an over­con­cen­tra­tion in the man­u­fac­ture of stra­tegic com­mod­it­ies in China. Before the Cov­id-19 crisis the private sec­tor was already start­ing to diver­si­fy its sources. This move­ment is gain­ing momentum. The golden era where China was the world’s fact­ory is com­ing to an end. 

Earli­er this year Chinese For­eign Min­is­ter Wang Yi said the big ques­tion is wheth­er the USA is will­ing to coex­ist with a coun­try with a very dif­fer­ent cul­ture, val­ues and stage of devel­op­ment. Its extern­al dis­course is about coex­ist­ence. How­ever, the intern­al mes­saging is one of exist­en­tial com­pet­i­tion between cap­it­al­ism and socialism.

The ques­tion is: is there any room for Europeans in this glob­al con­test? The EU and the UK lack a basic cor­pus of expert­ise and under­stand­ing of China. They have great schol­ars, but their know­ledge doesn’t feed through into polit­ic­al aware­ness. Besides, polit­ic­al and com­mer­cial interest might diverge, both at nation­al level or with­in the EU between net export­ers and net importers.

China’s pref­er­ence would be to deal with Europe as a single, pre­dict­able block. Where­as, in real­ity, it is a kal­eido­scope of 27 states, each with very dif­fer­ent object­ives. The tempta­tion to divide and rule is overwhelming.

Does tech­no­logy rein­force these trends? So far, it has been uni­fy­ing the world, but it might become a bar­ri­er between two sep­ar­ate worlds in the near future. 

I always sug­gest my Chinese friends to read Karl Pop­per on the poverty of his­tor­icism. They won’t read Pop­per because he’s very rude about com­mun­ism. But his basic point is that you can’t pre­dict the future because you can’t pre­dict how tech­no­logy will evolve.

Tech­no­logy can be an empower­ing force for all coun­tries, not just China and the USA. Take the example of the cheap Turk­ish drones that were able to alter the mil­it­ary bal­ance in Nagorno Kara­bakh. Europe can shape its own des­tiny if it gets the fun­da­ment­als right. We need to cre­ate an enabling envir­on­ment for European tech­no­logy, and then devel­op applic­a­tions of exist­ing tech­no­lo­gies that would add value and give the Europeans some leverage.

In quantum com­put­ing, Europe has a few cham­pi­ons. How do you keep these com­pan­ies afloat long enough?  In the USA such start-ups would be taken over by one of the big tech com­pan­ies: in China they would receive gen­er­ous state sub­sidies. Can Europe find a way to sub­sid­ise its tech start-ups until they can com­mer­cial­ise their research?

5G is stalled at the moment, just deliv­er­ing faster down­load times for video. It will stay that way unless we devel­op the actu­al applic­a­tions. If you don’t invest in autonom­ous vehicles or in robot­ics, if you don’t author­ise adven­tur­ous applic­a­tions for arti­fi­cial intel­li­gence, 5G will not ful­fill its potential.

Europe should also start to move away from the pre­cau­tion­ary prin­ciple and catch up with tech­no­logy lead­ers in fields like AI, biotech and robot­ics. Data pri­vacy is also an issue: there is a bal­ance between pri­vacy and innovation.

Emer­ging tech­no­lo­gies can serve mankind’s interests if used prop­erly. Maybe in every gov­ern­ment com­mit­tee ded­ic­ated to these top­ics, there should be a couple of career crim­in­als, to be able to anti­cip­ate how malign act­or might abuse these tech­no­lo­gies and hence pre-empt abuse. In any case we need vari­ous competencies. 

As such, tech­no­logy issues should be at the very centre of the polit­ic­al agenda. Last year the Chinese Polit­buro spent two days look­ing at block­chain tech­no­logy. This is how you do it if you want to under­stand, and to shape, the future.