USChina TechnoNationalism And The Decoupling Of Innovation
The hybrid cold war between the US and China is spreading into areas previously considered untouched by geopolitics.
The technology space has seen a steady progression from tight and strict controls on technology exports, followed by restrictions on access and use of data, and more recently new controls that would hinder the free movement of capital and growth. Man
All these restrictions will accelerate the separation of Chinese supply chains, digital platforms and knowledge networks. But the latest constraints on human capital – especially when it comes to collaborative and knowledge-intensive activities – will change the way universities and global innovation hubs operate.
The driving force behind all this is techno-nationalism: mercantilist behavior that links a country's technological and entrepreneurial capabilities to national security, economic prosperity, and social stability.
In the future, technocracy will affect the academic and innovation landscape in three ways.
First, affected institutions distance themselves from blacklisted Chinese universities and academic programs.
Second, a growing web of export controls and restrictions will put more pressure on firms to comply with increasingly stringent regulations.
Third, new legal frameworks and indicators of good governance in academia and innovation will emerge.
They are a necessary response to decades of Beijing's innovative mercantilism and the role played by the Chinese state apparatus in the systematic transfer of strategic intellectual property, technology and human capital to the world's best universities.
This article explores these issues in more detail and describes how techno-nationalism will affect Sino-US cooperation in technology and technological development.
Human capital as a strategic asset
Talent pools, educational networks, research and development (R&D) institutions, and innovation networks have become key strategic assets in the US-China hybrid Cold War.
A microcosm of this competitive environment thrives in the semiconductor sector, where two Chinese state-owned companies, Guanxin Integrated Circuit Manufacturing (QXIC) and Wuhan Hongxin Semiconductor Manufacturing Co. (HSMC) has recently enjoyed attractive financial incentives. Hire 100 engineers from Taiwan's TSMC, the world's leading contract chipmaker, thanks to government subsidies. The Made in China 2025 initiative alone is estimated to have attracted around 3,000 Taiwanese engineers to the mainland.
The efforts reflect Beijing's urgent need to expand its semiconductor manufacturing capacity, which lags behind companies in the United States, Japan, South Korea and Taiwan.
Meanwhile, Taiwan's government is looking for ways to subsidize the wages of local companies to match the lucrative packages offered by Chinese state-owned enterprises (SOEs) and impose anti-competitive restrictions on Taiwanese engineers going to mainland companies.
The Taiwanese government has tightened controls on intellectual property transfers and enforcement actions, including monitoring engineers at strategic Taiwanese semiconductor companies whose offices are occupied by full-time national security officers.
Academic institutions are the new epicenter
Technonationalism will affect most of the world's leading universities and research institutes, most of which are located in the United States, Europe, and other liberal democracies. Beijing has made it its mission to maximize access to these institutions to gain access to the world's best subject matter experts, research networks and innovation communities.
As a result, policymakers are taking steps to make it harder for adversaries to exploit the openness of the education system to prevent collateral damage to channels of human capital that technologists see as a net advantage. .
The intersection of knowledge networks
In June 2020, the US blacklisted several of China's top universities, including the Harbin Institute of Technology (HIT), dubbed the "MIT of China". The consequences of the limited legal status were immediate: HIT faculty and students no longer had access to important American research and simulation software, such as MATLAB, which was widely used in research and development programs.
Other consequences include the termination of exchange programs between HIT and the University of Arizona and UC Berkeley. More broadly, the list of HIT-restricted organizations reveals other Chinese academic institutions that are part of a larger research network funded by the Chinese Communist Party (CCP) and the Chinese People's Liberation Army (PLA). This "civilian-military" combination of Chinese academic institutions raises the possibility that more will be added to Washington's list of restricted organizations.
As one of China's leading educational institutions, Tsinghua University plays a central role in China's state-sponsored semiconductor research and closely cooperates with Chinese state-owned enterprises. If the US approves it, it will have an immediate impact on some of the world's leading universities, many of which collaborate and exchange partnerships with Tsinghua.
Meanwhile, India, the world's largest democracy, is trying to capitalize on the US-China divide by investing in US-India educational ties. Thus, while the flow of Chinese scientists and STEM students to the United States has declined, India's techno-nationalist vision envisions attracting American universities to India while creating more domestic human capital. Balance two-way innovation. pipeline from the United States
Beijing's strategic relations with world universities
China's Thousand Talents program targets top scientists and other foreign professionals. Providing significant financial support to move to China to conduct research on future high-tech industries and technologies and participate in China's key scientific programs to support China's high-tech development plan, such as the "Made in China 2025" program, played an important role. role. role. Giving Beijing immediate access to research and development, strategic intellectual property, and talent pools that have taken years to develop at US and European institutions.
Thus, for many Chinese viewers, the Thousand Talents program is associated with Beijing's attempts to acquire hybrid intellectual property, including the use of donations, fraud, coercion and outright theft.
These suspicions are exacerbated by China's National Intelligence Law, which requires Chinese citizens and companies to assist state intelligence and security services upon request. So, rational or not, Chinese scholars and students working and studying on overseas campuses are increasingly suspicious.
In January 2020, Charles Lieber, a nanoscientist and former chair of the Department of Chemistry and Chemical Biology at Harvard University, was arrested for allegedly failing to disclose his ties to China's Thousand Talents program.
In Lieber's case, Yanqing Ye, a Chinese graduate student, was also arrested for failing to disclose that he was a PLA lieutenant when applying for a nonimmigrant visa to study physics at Boston University. Chemical and biomedical engineering. He is accused of spying for the PLA. According to federal documents, devices seized from him showed him visiting US military sites, researching US military projects and collecting information for the PLA from two US citizens with expertise in robotics and computer science.
Other such cases underscore the challenges academic institutions and government officials face as they adjust to the technological Cold War between the United States and China.
More generally, growing calls for China's Confucius Institutes to be banned from Western university campuses, alleging that Beijing uses them to influence propaganda and monitor Chinese students abroad, have also added to the pressure.
Export controls and technological restrictions
In the future, US export controls will become more stringent at the world's leading academic institutions. They must comply with increasing compliance rules and standards, such as:
- export controls over software, digital networks, computer code and other intellectual property rights;
- Adding academic partners (foreign academic institutions) to the list of persons with limited access;
- blacklists of persons (scientists and students of target countries and institutions);
- Fee and admission threshold for international students by nationality;
- Reduction or prohibition of funding from foreign organizations.
Failure to comply with these rules could, for the first time, lead to fines and sanctions against universities and research institutes previously reserved for oil companies and big banks.
Many of these rules go against the principles of an open and democratic learning environment. However, China's decades-long techno-nationalist agenda and its innovative business system have positioned Beijing in the role of provocateur. In many ways, the CCP's challenges to the global academic community represent the same dilemma that its statist economic model poses to the world's multilateral institutions: existing rules and regulations are designed to operate on the principles of transparency and reciprocity. . , does not adapt to predatory behavior.
The next phase of techno-nationalism will create tension between public policy and open academic environments in the US, Europe and elsewhere.
Therefore, to remain places of vibrant learning, these institutions must begin to implement risk management measures that properly address the complexities of techno-nationalism and technological competition between the United States and China.
New Rule Structure
The academic community must work with policymakers and law enforcement to address the challenges of US and Chinese technocracy. This includes implementing governance structures and administrative practices that can transform the education community into a highly regulated service industry.
Conflict of interest checks (by third parties) and due diligence will become mandatory in the banking sector, as will Know Your Customer (KYC) standards. These checks will apply to faculty and graduate students conducting applied and specialized research.
Academic and research institutions will see strengthened research integrity standards and increased penalties for violators (including faculty, students, and the entire academic body) not disclosing their affiliation with Chinese institutions and programs.
There will also be full disclosure and transparency standards that will be audited and enforced by an independent third party as required by mutual and affiliated academic institutions.
As the technological cold war between the United States and China intensifies, academic and research institutions around the world must learn to adapt. However, many organizations, often faced with the choice between implementing complex and increasingly risky compliance processes or simply leaving their Chinese associations, choose the latter.
Alex Capri is a Hinrich Foundation Fellow and Senior Lecturer at the National University of Singapore Business School and a lecturer at the Lee Kuan Yew School of Public Policy. This article is based on Capri's long report for the Heinrich Foundation, The Race . Between the United States and China on Technology and Innovation."
