The Fight Over High-Tech Supremacy Isn’t New. We Just Haven’t Learned Our Lesson
The U.S. is intensifying its competition with China for high-tech supremacy. Just two weeks ago, the Department of Justice released a major indictment against Chinese telecommunications company Huawei for allegedly violating U.S. sanctions against Iran. But that’s just one piece of a much larger puzzle.
Over the last two years, the U.S. has invoked a wide range of instruments to restrict Chinese access to cutting edge technology. Conditions for foreign investment in U.S. based high-tech firms were tightened. It has become more difficult for Chinese graduate students to get visas to study in sensitive fields like robotics. And concerns about China acquiring more advanced A.I. have led to calls for stronger controls on exports of this technology.
But the confrontational approach the Trump administration is now using against China is not a new strategy. The current U.S. policies echo those of the 1980s when the national security threat posed by the Soviet Union’s illegal acquisition of Western technology converged with fears about Japan’s powerful economic competition. Back then, rapid technological evolution and economic globalization changed the way Americans thought about the relationship between trade, knowledge sharing, and national security, a shift which laid the groundwork for the U.S. policies towards China now.
Indeed, many of the elements of the current U.S. campaign against China were contested in Japanese-U.S. relations 30 years ago. Like today, the debate revolved around computer technology—especially computer chips. Rapid development in chip capabilities revolutionized commercial and national security technologies by creating hugely profitable new products (like the personal computer) and transforming high-tech weapons system in areas like missile guidance. Chips manufactured in Japan for civilian devices cost a fraction of those made in the U.S. for defense contractors, and Japanese firms like Toshiba and Fujitsu quickly dominated the global market.
The U.S. responded by accusing Japanese companies of using joint ventures with U.S. businesses to get access to commit industrial espionage, circumvent export controls against U.S. enemies, and engage in unfair trade practices.
Critics of Japanese market power advocated for placing restrictions on the sharing of knowledge with Japan, hoping to address what they saw as a twin crisis: the decline of America’s economic power and its military strength. National security, they argued, was not simply a matter of military preparedness. It also depended on dominating the market in emerging and powerful dual-use technologies. To achieve that domination, knowledge was the key resource and had to be shielded from Japanese competition: tariffs were introduced, as were special screenings of Japanese foreign direct investment by the Committee on Foreign Investment in the U.S. (CFIUS) and controls over information sharing.
This push for protectionism went against the grain of a global economy that was based on the principle of open knowledge sharing, and undermined American technological leadership by restricting access to the global pool of knowledge.
Similarly, the Trump administration’s “economic security” policies against China oversimplifies the reality of a world in which high-tech companies have become even more globalized and interdependent than in the 1980s. Ignoring that reality damages U.S. economic interests as well as national security.
National security depends on balancing the risks of technology loss against the need to stimulate entrepreneurship, penetrate global markets, secure access to the global pool of knowledge, and respect academic freedom. The government, corporations, and the research community have to work together to make the political and technical judgments needed to strike this balance. In a globalized economy, protectionism of our national knowledge cannot be the answer. Japan’s—and now China’s—economic rise should have made that abundantly clear.
Mario Daniels is the DAAD Visiting Professor at the BMW Center for German and European Studies at Georgetown University. John Krige is the Kranzberg Professor at the School of History and Sociology at Georgia Tech. Their work focuses on the history of the U.S. regulatory system.