Finding the same wavelength

China and the US share broad common interests that offer a solid foundation on which to build cooperation in tech sector

The United States has continuously ramped up its export controls and investment restrictions in a bid to slow down China's technological progress. The relentless escalation of US tech pressure on China will be a drag on innovation for both countries. For China, export controls targeting Chinese entities hinder their access to specific advanced technologies, materials and equipment, impeding technological progress in related industries. Some of China's high-tech products are being squeezed out of developed markets, reducing the profits and growth opportunities for Chinese businesses. The uncertainty in the business climate has significantly reduced both Chinese investment in the US and the inflow of US capital to China. Chinese direct investment in the US has plummeted from $23.4 billion in 2017 to $3.2 billion in 2022. Many Chinese tech companies have voluntarily withdrawn from the US market or halted the expansion of their operations. In 2021, US investors reached 426 deals with Chinese tech startups, with a total funding volume of $87 billion. But in 2022, the numbers dropped to 283 deals and $46.3 billion respectively, and by the first four months of 2023, they further decreased to fewer than 50 deals and $8.1 billion.

For the US, severing ties with the Chinese tech market and talent pool poses significant challenges for its tech industries and other sectors. In the field of artificial intelligence, the US is highly dependent on Chinese talent, which accounts for 30 percent of the talent pool in the AI sector. In clean energy, China has successfully reduced the manufacturing costs of solar and wind energy equipment, and it plays an irreplaceable role in promoting a low-carbon economy and addressing climate change for the US. A study published in Science magazine in 2022 warned that the risk of the US decoupling from China in clean technology would outweigh the benefits. In the biotechnology sector, the US not only relies on Chinese companies for important materials and services but also international students from China. The US also needs international cooperation, including with China, to share the massive costs and risks of research and development.

Erecting barriers to technology and capital flows in an effort to contain China in the technological sector fundamentally reflects the US' economic and technological nationalism and protectionism in recent years. Putting America first, the US has deliberately excluded competitive Chinese innovations from major international markets, forcing other countries to choose higher-priced and lower-quality products. In doing so, it has increased the cost of obtaining high-end products and services for other nations. Its attempts to deliberately suppress China's voice in the formulation of cutting-edge technology standards and rules are also creating a division in the technological system.

The absence of cooperation in the tech sector between China and the US will increase the difficulty of global technology governance. Global technology governance can be divided into three aspects: governance of global issues related to technology, governance of the risks inherent in technological development, and governance rules for technological innovation. In the governance of technological issues, the lack of collaboration between the two countries impedes the effectiveness of relevant international mechanisms while weakening the impact of using their respective technological strengths to promote the resolution of relevant issues.

As for the governance of the risks involved in technological development, the ideological framing of technological issues can lead to delays in risk governance. From AI to biotechnology, many emerging technologies have already presented safety and ethical risks, necessitating discussions and strategies to be developed by major countries. These risks are borderless by nature, and a purely competitive mindset limits the discussion of related issues to specific countries, delaying the risk control of new technologies and the establishment of relevant ethical frameworks.

A competitive mindset may also lead to the divisions in the governance of rules for technological innovation. The US' efforts to rally its allies in international standards and international scientific and technological organizations to exclude Chinese representation may stimulate the formation of two separate systems in various aspects, such as technological concepts, standards, supply chains, and markets. Such actions lead to a reversal of globalization and the reduction of its benefits.

Additionally, the indiscriminate application of a national competition perspective in regard to new technologies may trigger large-scale humanitarian disasters. For example, AI technology is now applied in various military areas such as situational awareness, data analysis, intelligence reconnaissance and unmanned warfare. In the future, the development of weapons that are increasingly intelligent and miniaturized will significantly amplify the catastrophic consequences of international conflicts.

As time goes by, emphasizing the competitive aspect of technology will have increasingly serious and far-reaching negative consequences. Therefore, it is necessary for China and the US to engage in in-depth dialogue on the key issues as soon as possible. During the leaders' summit in San Francisco, the two sides agreed to initiate negotiations to renew the China-US Science and Technology Cooperation Agreement and to establish a government-to-government dialogue mechanism on AI. These are two positive signals sent by the two sides.

The technology ecosystems of China and the US are still highly interdependent. The two sides still share broad common interests, which forms the basis for establishing a positive relationship for competition and cooperation in the tech sector. Both sides can make efforts in the following areas.

First, it is important to restore and expand communication channels, strengthen discussions among think tanks and scholars on strategic and directional issues in bilateral relations, and work toward restarting official strategic dialogues. Second, both sides should focus on building their own capabilities, developing their comparative advantages, and avoiding disruptions to the international technology ecosystem. Once both sides choose not to deliberately exclude each other, more opportunities for cooperation can be identified. Third, it is imperative to clarify rules and broaden their shared interests. In the economic and social application of technologies, the two sides can conduct cooperation to some extent on cost reduction, mutual learning of business models, market segmentation, or engage in differentiated competition. Consensus can be reached on how to expand increments and fairly distribute benefits. Fourth, the two sides should engage in dialogues to jointly address global challenges, such as climate change, environmental transformation, energy security, infectious diseases, and biodiversity protection, and this would also help the two sides to accumulate mutual trust. They can also hold discussions on the responsible application of technology in order to establish behavioral norms. China and the US share a common responsibility for global technology governance. They should cooperate to jointly tackle the major technological challenges related to the future of humanity.

The author is deputy director of the Department for International Strategic Studies at the China Institute of International Studies. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn