Decades of misguided pro-China policies by globalists opened the door for astounding wealth and technology transfer to the People’s Republic of China. The Chinese have exploited international entities like the World Trade Organization by implementing and maintaining opaque mercantilist and protectionist practices aimed directly at developing Chinese manufacturing and production capabilities at the expense of the US. The Chinese have also leveraged bought-and-paid-for US politicians like the Clintons, Dianne Feinstein, and the Bidens to facilitate technology and knowledge transfers from the US to China while bribing them to ignore Chinese industrial espionage and theft of hundreds of billions of dollars of US intellectual property. Meanwhile, US universities are flooded with Chinese transfer students and “visiting Chinese professors” who serve as vacuums for Chinese intelligence services in their ongoing efforts to steal US technology secrets, as noted here.

Amazingly, the Chinese have told us for years what their plans are. For example, the goals of their “Made in China (MIC) 2025” initiative are to raise “the domestic content of core components and materials to 40 percent by 2020 and 70 percent by 2025. The plan explicitly referred to how much of China’s technology market could be controlled by Chinese companies and how many component parts in different products needed to be ‘Made in China.’” How they get there is the issue, as the Chinese pursue industrial espionage, theft of trade secrets, and the use of joint ventures to steal intellectual property, technology and production capabilities.

President Trump and US Trade Representative Robert Lighthizer have made rebalancing US-China trade a top priority since Inauguration Day 2017, and Lighthizer fully recognizes the threat to US economic security posed by MIC 2025:

“China’s government is aggressively working to undermine America’s high-tech industries and our economic leadership through unfair trade practices and industrial policies like Made in China 2025”— USTR Robert Lighthizer, June 15, 2018

While the MIC 2025 plan states as a basic principle that the government will “comprehensively deepen reform” and give markets the “decisive role in allocating resources,” critics contend that the plan represents a state-directed industrial policy intended to reduce not only China’s dependence on foreign technology but to help Chinese firms become dominant global players in numerous advanced industries. Concerns have been raised that the Chinese government will provide extensive financial assistance to Chinese firms involved in the plan, such as through state-directed investment funds and preferential access to credit from state banks. Another concern is that the Chinese government is funding and directing acquisitions of foreign technology firms and intellectual property (IP) to advance MIC 2025 goals. Another major aspect of the MIC 2025 plan that raises considerable concern among foreign businesses has been the listing of date-specific percentage targets for the domestic content value of certain products that are sold in China.

On March 22, 2018, the USTR announced action against four broad Chinese policies, including (1) forced technology transfer, (2) unfair licensing requirements, (3) government-backed cyber-theft of U.S. trade secrets, and (4) efforts by China to acquire U.S. technology and IP through acquisitions to support its industrial plans.

At the forefront of the US-China technology competition are the next-generation information technologies centered around fifth-generation (5G) mobile networks. 5G networks are expected to provide new user experiences (maybe eventually holographic capabilities long envisioned by science fiction buffs), as well as interconnect new industries for increased information transfer and collaboration. 5G will eventually deliver multi-Gigabit-per-second peak rates, ultra-low latency, massive capacity, and more consistent user interfaces on mobile devices. There are presently three non-US companies who lead the world in 5G technology development: Ericsson (Sweden), Nokia (Finland), and Huawei (China).

The importance of 5G technology development and the competition with China was discussed in a panel at the Conservative Political Action Conference (CPAC) in Washington, DC just over a week ago:

  • James Carafano (The Heritage Foundation): We have to win the fight for privacy rights and IP protections with our friends and allies, too, not just here in the US. 5G is the transformative technology for data that is coming. 5G capacity across the entire economy plus the computing power of quantum computing coupled with artificial intelligence (AI) technology is the future. We need to get it right with an American solution.
  • Matthew Whitaker (former acting AG and now at Axiom Strategies): Drafting worldwide standards for interconnecting phones and data is a key step. If the Chinese aren’t open to interoperability standards and privacy rights protections, they should be shut out from helping to determine those standards and implementing the future 5G-AI-quantum computing infrastructure.
  • Gordon Chang (Chinese expert and Fox News contributor): The Chinese violate international standards all the time, e.g., for genetic engineering. They don’t have a good track record in cooperating on international standards.
  • Carafano: The Chinese are involved in technology-laundering operations through joint ventures. They develop the tech in the joint venture, then steal it and duplicate it in a Chinese-owned company. Winning the 5G fight is just one part of the battle. There is a security competition, a human rights battle, a facial recognition battle, and other battles that must be won.

Computing infrastructure is key to developing and deploying 5G networks. Supercomputers are used for all kinds of research, development and test applications that involve computationally-intensive tasks in fields as diverse as climate research, quantum mechanics, oil and gas exploration, military vehicle tests in simulated combat environments, pilot simulators, big data analysis, and information technology research and development.

With the implications of the aforementioned in mind, this recent article from The Financial Times discusses the ongoing US-China supercomputer race.

Get ready for a spate of headlines about the latest computing “space race” between the US and China. The next generation of supercomputers is about to come on stream, bringing with them the era of so-called exascale computing. If China is the first to fire up one of the new machines, it will no doubt lead to hand-wringing in the West — though the US is close to breaking the exascale barrier as well, with its own monster systems, each costing about $600m.

The spotlight about to fall on the supercomputing race is occasioned by the imminent launch of the first computing systems capable of handling a billion billion calculations a second — a feat known as an exaflop. That is roughly five times as much as the current world leader in the supercomputing stakes, an IBM system that in 2018 wrested the title of world’s most powerful computer back to the US from China for the first time in five years.

The first of three exascale systems being built for the US Department of Energy is set to be delivered next year, though it is likely to be 2022 before it is fully operational. It may well be preceded by the first of three exaflop systems being developed in China.

Not surprisingly, it is the hardware that gets all the attention, and, given the current state of the tech cold war between the US and China, it is the focus of attempts to protect national supercomputing prowess. The White House last year banned US companies from selling to five entities involved in China’s exascale supercomputing projects.

Yet the obsession with hardware does not get to the heart of the issue. While the US may be pouring $1.8bn into building its three exascale systems, it is spending as much again on the software needed to make use of them. This is where the real national advantage may lie. If the US edge in chip technology is narrowing, its lead on the software side is much greater.

The next generation of supercomputers combined with quantum mechanics and artificial intelligence technologies is the next big tech wave that will change the information infrastructure of the world and have far-reaching economic and national security implications for the US. It’s a race we can’t afford to lose, and our edge remains software engineering and development, as the creative incentives required for innovative software development are derived from personal and economic freedoms in America that can never be matched by the ChiComs.

Thankfully, we finally have a US president in the Oval Office who actually realizes that Communist China is an existential economic threat and is acting accordingly by using trade and tariffs as economic leverage against Beijing.

The end.

Stu Cvrk
Stu Cvrk served 30 years in the US Navy in a variety of active and reserve capacities, with considerable operational experience in the Middle East and the Western Pacific. An oceanographer and systems analyst through education and experience, Stu is a graduate of the US Naval Academy where he received a classical liberal education which serves as the key foundation for his political commentary. He threads daily on Twitter on a wide range of political, military, foreign policy, government, economics, and world affairs topics.
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