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Sino-US Competition
in Global Information
Infrastructure, Critical Regional Studies
Vol 42, Issue 1
Technologies and Its pp.96-129
© 2024 IRS
Implications http//irs.org.pk
P-ISSN: 0254-7988
E-ISSN:2959-5459
Nabila Jaffer∗ Date of Acceptance: 4 April 2024
Published Online: 25 July 2024

Abstract
The competition over technologies is becoming central to the rivalry between
China and the United States (US). The US achieved superpower status as a result
of its unmatched political influence, economic strength, and military
technological leadership. But China has recently made great strides in building its
information infrastructure, which is essential for both the nation's military might
and economic growth. China currently has the second-largest economy in the
world. This paper examines how China is emerging as a competitor to the US in
major critical technologies such as cyberspace, 5G, Artificial Intelligence (AI),
quantum computers, and space. The US is taking preventative actions against
China in order to protect its superiority and both countries are working to
establish independent capabilities in these technologies which have major
implications. Power transition theory and neorealism provide an explanation for
the Sino-US drive for technological superiority and how it is influencing the global
power structure. Techno-nationalism stemming from competition for
semiconductors and microchips, techno-politics through technology-driven
political interests and alliances, economic gains, market control, automation of
weapons, and challenges to governance of these technologies and cyber-security
are some of the implications of this ongoing competition. This article proposes a
global agreement on governance and regulation of these technologies.
Keywords: China, US, strategic competition, global information infrastructure,
critical technologies, semiconductors, cyber security

∗ Ms. Nabila Jaffer is a Research Analyst and leads the China Program at the
Institute of Regional Studies (IRS), Islamabad.
E-mail: nabilajaffer22@gmail.com
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Introduction
In the era of innovations, the development and spread of
cutting-edge information-based technologies in unprecedented ways
has made great power competition more complicated and
consequential. Following the disintegration of the Soviet Union, the
United States gained the status of superpower due to its unmatched
technological leadership, economic might, military supremacy, and
political influence. The US upheld its dominance and safeguarded the
liberal order it had established with its fellow western powers based
on democracy, human rights, freedom of speech, capitalism, and open
trade. To preserve this order, the US also did not hesitate to implement
regime change policies in many places. This also led the US to involve
in various military and armed conflicts. Until China became the
second-largest economy, there was no other country to challenge the
US hegemony.
Following Sino-US diplomatic relations in 1978, the US made
significant investments in China, making them major trading and
business partners in the coming decades. Ever since joining the World
Trade Organization (WTO) and obtaining Foreign Direct Investment
(FDI), China has remained a significant actor and partner in the
promotion of US-led global order. China maintained a pragmatic and
rational approach toward relations with other countries. The primary
reason for the US apprehension about China was rooted in China’s
emergence as the biggest manufacturer in the world in 2010 and
2011,1 which also gave an unchallenged legitimacy to a one-party
governance system of ‘socialism with Chinese characteristics’ under
the leadership of Communist Party of China (CPC).
Initially, the driver for China’s focus on developing its
information infrastructure was its fear of the US regime-change policy
after the 2010–2011 Arab Spring, in which US–led digital platforms
and information campaigns played a crucial part in the movement
against autocratic rulers. In addition to China’s economic boom, there
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were also other factors which pitched it as a rising challenge to the US


primacy such as its incremental claims and assertiveness in the South
China Sea, and the announcement of the Belt and Road Initiative (BRI)
in 2013, i.e., a mega infrastructural, industrial, digital, and trade
corridor connecting Asia with the rest of the world. To counter China,
the US broadened its Asia rebalancing strategy to Indo-Pacific
Strategy.
It was China’s extraordinary economic rise and distinct political
system that prompted the US to designate it as a strategic rival to its
global power in the National Security Strategy (NSS) 2017. In terms of
commerce, the two countries' imbalance was reported to be $53
billion in 1997 and increased to $367.4 billion in 2022. The US
increased its propaganda against China in 2019 by focusing on its
political system, which was seen in its criticism of the 2019 protests in
Hong Kong, human rights in the autonomous regions of Xinjiang and
Tibet and China being the origin of the COVID-19 pandemic.
Additionally, the US increased its arms trade with Taiwan, which
agitated China. Thus, the US implemented a comprehensive
containment strategy against China.
The integration of information technology in all sectors of the
modern world makes it a major tool to influence economic, military,
and political domains, globally. The domination, control, and
destabilisation of other countries can be achieved through
information rather than by material means alone. The major reason for
the US to classify China as the most "comprehensive and serious
challenge" to US security in its NSS 2022 has been its rapid
advancement in scientific and innovative capabilities, especially in
information infrastructure and critical technologies.2 As per the
document, China is the only rival that possesses the capability to alter
the global order and the intention to do so, along with growing
economic, diplomatic, military, and technological might. To maintain
its technological superiority, the US Senate earlier in 2021 passed the
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United States Innovation and Competition Act 2021. This law


recognised China as a rising science and technology power.3 The US
not only announced new strategies to regain its leadership in
technology but also raised preventive and protectionist policies
against high-tech cooperation with China.4
There are a wide range of cutting-edge technologies in which
China is increasing its capabilities. However, this paper attempts to
measure China’s emerging competence vis-à-vis the US in cyberspace,
5G, Artificial Intelligence (AI), quantum computers, and space which
bear the potential to seriously undermine US dominance and have
significant implications. This paper uses the qualitative method for the
research and focuses on Global Information Infrastructure (GII) as a
broader term for the new domain of power that is the strategic use of
information manifested in critical technologies. The problem under
focus in this study is the tendency of both China and the US to develop
independent capabilities in critical technologies aimed at achieving
superiority. To address why Sino-US competition is escalating in critical
technologies, and how this factor is significant in altering the global
power dynamics, the explanations provided reflect the underpinnings
of offensive realism and power transition theory.
China now leads in strategically important industries,
according to Information Technology and Information Foundation
(ITIF) Hamilton Index 2023. It is “producing more than any other nation
in absolute terms and more than all but a few others in relative
terms.”5 According to Robert Atkinson, the president of ITIF, the US
and Soviet Union were mainly competitive in military strength during
the Cold War, while present day competition between China and the
US is in economic strength based on technological leadership.6 The
impact of critical technologies is more comprehensive to alter global
power dynamics. The countries which lead in global information
infrastructure, critical technologies, and employing successful
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strategies for adoption of these technologies will have comparative


advantage in both economic and military power.

Global Information Infrastructure and its


Significance for Global Power Dominance
Among all sorts of technologies, the Global Information
Infrastructure (GII) is a comprehensive term used for technologies
related to the strategic use of information with a wider range of its
integration in the industrial innovation and its conversion to critical
technologies and weapons.7 Therefore, the strategic competition is
compounding in this domain between China and the US with far-
reaching consequences in the 4th industrial revolution period for
global power dynamics and a shift in economic centres. Considering
that GII is a system of applications, activities, data storage, data
surveillance, and relationships as well as hardware and software,
whichever country leads its production and control will have sway in
the global power struggle. Now its advancement has led to critical
technologies such space, cyberspace, Artificial Intelligence (AI),
Quantum Computers, and 5G technology. The global chains of
Information and Communication Technology (ICT) and its applications
have become increasingly intertwined with the global trade, financial
and commercial activities, defence and interests of the countries
worldwide.
The US still maintains a competitive edge in the world due to
its leadership in technology and innovation. Due to its robust
institutional foundations, financial options, and dynamic innovation
ecosystem, the US topped the 2018 Global Competitive Index and is
among the top three countries in the Global Talent Competitiveness
Index 2023 of the World Economic Forum.8 It was the technological
superiority and innovation that increased competitiveness of the US
vis-à-vis other countries and led to its global domination.
China since its economic modernisation has remained
dependent on Western technology. It embarked on the initiative for
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independent innovation in science and technology in the 2006 plan


and ‘Thousand Talents Plan in 2008’ to develop research programmes
in China by using the scientific knowledge acquired from the
developed world.9 Indigenous innovation became more important for
China in the new era of digitalisation under the fourth and upcoming
fifth industrial revolutions which are largely dependent on microchips
and semiconductors.10 The most important initiative was in its 14th Five
Year Plan (FYP) in 2015, ‘Made in China 2025’, aimed at reducing
dependence on foreign technology. Under this strategy, China
focused on the production of 10 high-tech technologies including
sophisticated Robots, AI, Electric Vehicles (EVs), as well as other new
energy vehicles, and the next generation of ICT, which have the power
to further stimulate China’s economic growth.11 This initiative is
enabling China to shift its industry from low-end manufacturing to
high-end manufacturing. China’s Research and Development (R&D)
spending also increased to 7 per cent with the focus on leading the
‘Next Industrial Revolution’. The Internet Plus initiative is aimed to
digitalise major sectors of the economy by integration of
industrialisation and information for smart and intelligent
manufacturing aimed at improving quality, competitiveness, and
productivity.12 Despite the high contribution of the agriculture sector
to China’s GDP, the economic production from telecommunications,
software, and information technology totalled $587.4 billion in 2020,
according to the Chinese Ministry of Statistics,13 making China a peer
to the US.

Sino-US Competition in Theoretical Perspective


One of the elements surfacing in Sino-US strategic rivalry is
the quest for power. In the given global structure, from a neorealist
perspective, countries either attempt to rebalance ‘power’ in their
favour or to overtake the contender. The two theories of offensive
and defensive realism have some relevance to the current strategic
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rivalry, particularly in the context of gaining superiority in key


technologies. Kenneth Waltz's defensive realism is accurate in that,
as it explains the actions of both established and developing
powers. Nonetheless, the phenomenon cannot be sufficiently
explained by defensive realism. Given that defensive realism places
a strong emphasis on the balance of power, a particular degree of
strength is thought to be sufficient to feel comfortable. However,
China is growing its autonomous skills in critical technologies,
which the US fears may eventually overtake it. The US, which is
leading in many technologies, is taking action to stop China.
John Mearsheimer's offensive realism can serve as a prism
to view the trends in the race of critical technologies that the
powerful states are using to gain domination. These technologies
have the potential to change power distribution in ways not seen
before. These technologies can not only increase the material
capabilities but their interconnected abilities through information
technology can have far-reaching consequences on distribution of
power through its impact on the economic growth, military
capabilities, global supply chains and also on controlling ideas,
knowledge, and narratives. Although AFK Organski's 1958 power
transition theory is also used to predict wars when a rising and
dissatisfied power tries to overtake or reach parity with the
dominant power, the theory can also explain Sino-US competition.
As this paper will explain in detail, the preventive measures of the
US against China resulted in boosting China’s independent
capabilities in these technologies which have many implications.
Since the US views China as an unsatisfied power with aspirations
to reshape the world order in its favour, it sees China as having
merely profited from the current economic order without
contributing to its creation.
Power transition becomes even more complex in the new
age as it cannot be only altered in material terms. Due to the
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abilities of these technologies in power diffusion, countries need


to increase strength in both these technologies and their
associated policies. As explained by Joseph S Nye, Jr, the elements
of power transitions are different in the world of the 21st century
because of the “burgeoning revolution of information technology.”
The composition in the form of economic, military, and
transnational linkages has different impact on power distribution
at the global level. “Power diffusion may be a greater threat than
power transfer in an information-based world.”14 Therefore, the
increasing prowess in information technology and its
infrastructure can change the power equation between China and
the US, not only through their own capabilities but also by
expanding influence globally for achieving their respective
interests. They will not only compete for acquiring these
technologies but also to adopt policies for their strategic use to
maximise power. On this preposition, James Andrew Lewis,
Director of the Strategic Technologies Programme at the Centre for
Strategic and International Studies (CSIS) points out that “fostering
national power requires creating an environment that promotes
innovation in both technology and strategy and allows its
adoption.”15 China is clearly not just creating critical technologies
but also having a strategy, given its centralised one-party system,
policy continuity, desire of rejuvenation by 2049, and a reformative
outlook on the world order. This is another reason why the US has
decided to take preventative action. The announcement of a $250
billion package under the United States Innovation and
Competition Act 2021 was the first significant action taken by the
US to restructure federal science, innovation, technology, and
research in the country and to produce incredibly small computer
chips in an effort to challenge China's rising dominance in high
technology.16
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The growing trade deficit with China has also been the reason
for the US decoupling with the former. Nevertheless, China’s rapid
success in technologies is central to this measure. As decoupling
would be a slow process, a new strategy of de-risking has been
implemented in which the US curbs China’s access to key strategic
innovation partnerships and investments with China. The US banned
sale and imports of five types of “made in China” communication
equipment from five companies including Huawei and ZTE (a leading
5G company in China) as well as sanctions on the export of microchips
and semiconductors.17 In addition, the US also barred Chinese students
from research and study in the advanced science and technology
research centres and universities.18 Following the recurring US
sanctions, China launched an internal chip industry with state funds
amounting to $40 billion in 2023.19 The US still tops the Global
Innovation Index (GII) in 2022, however, China for the first time in 2023
topped in 24 Science and Technology (S&T) clusters among the top
100 surpassing the US with 21 clusters.20 Given China’s population size,
industrial capacity, R&D spending and successful strategic policies, it
has much larger potential to excel in critical technologies.

China as Competitor to the US


in Critical Technologies
To understand the relevance of Sino-US strategic competition
to global power dynamics, it is important to measure China’s potential
in critical technologies. The rapidly evolving technologies such as
space technology, cyberspace, AI, information infrastructure 5G
technology, and quantum computers are essential for change in
power redistribution because of their broader scope of applications in
economy, military and political domains as explained earlier.
Space Technology
In recent years China has demonstrated major breakthroughs
in space technologies. It is rapidly increasing its capabilities in space
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exploration and independent internet or information capabilities by


launching advanced satellites. China set a national record by
launching dozens of satellite missions to outer space in 2023 alone.21
According to a report, in 2020 China sent more satellites into space
than the US and Russia.22 China’s Zhurong rover successfully landed on
Mars on 15 May 2021, which makes it a peer to the US and Russia.
China did in a single experiment what took the US space agency
National Aeronautics and Space Administration (NASA) decades, as
put by planetary scientist Roberto Orosei.23 Its touch on Mars also
marks China’s participation in planetary exploration. The Chinese
Manned Space Agency (CMSA) launched a low orbit space station
Tiangong at a distance of 217 and 280 miles over the planet in 2021
with its first module Shezhou 12 to send images of earth. This space
station will enable China to conduct experiments in the exploration of
space.24 Tiangong expanded to second and third modules Wentian
and Mengtian in 2022 and 2023, respectively. Efforts by China are in
line with its policy of becoming a world-leading country in space
equipment and technology by 2045.25
Additionally, in June 2020, China built its own international
satellite navigation system, known as ‘BeiDou’. This satellite serves as a
substitute for the Global Positioning System (GPS), which is owned by
the US government. Experts believe that in case of a crisis, this will aid
China’s military systems in remaining operational. Chinese spacecraft
made its first-ever return to Earth in December 2020 carrying moon
rock samples. The US is still leading in overall space capabilities, but
China is rapidly achieving parallels with the US, said Scott Pace,
Director of the Space Policy Institute, Elliott School of International
Affairs.26 China is ahead in its mission to develop a Digital Silk Road to
rewire the global network which shows its quest to achieve maximum
political leverage.27 In this regard, BeiDou will aid in providing
navigation data to its domestic market and will also lead it to the
global market.28
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Cyberspace
Cyberspace as a ‘network of interaction between human users
and information systems’ is an important medium to transmit and
store data through signalling between processors and devices.29
Cyberspace is increasingly becoming the fifth domain of warfare
between rivals after the four domains of traditional warfare such as
land, air, maritime, and space.30 This domain influences policy areas
including elections, trade, defence, and transparency when it comes to
the bilateral relationship between the US and China.
With rapid expansion in the digital industry, the world is
moving towards the next generation of the internet. Currently, IPv4
internet is prevailing and innovation is taking place to move to
another internet protocol which is IPv6, most likely in the next decade.
The Chinese and the US military have already expressed the “desire to
move to IPv6 to support the modernisation of their large networks.”31
The Mandiant Report exposed China’s extensive economic espionage
programme, and Edward Snowden revealed the US PRISM Project in
2013, making cyber-enabled espionage activities the next big
problem.32 It is concerning that these operations result in hundreds of
billions of dollars in annual costs for the US due to cyber theft. Despite
facing new challenges, the US is still leading the world in terms of
offensive as well as defensive cyber capabilities.33 In order to safeguard
its interests and raise its capabilities to the level of the US, China is
building its own independent information infrastructure. In 2014,
China launched the De-IOE programme, to uninstall software made by
American suppliers such as IBM, Oracle, and EMC from its e-commerce
companies and banks.
5G Technology
High-speed Fifth Generation (5G) wireless internet is
revolutionising mobile telecommunication and real-time data transfer
abilities. Coupling with other reinforcing technologies, 5G is emerging
as a driver of the global infosphere. In the near future, around 6 billion
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people will be interacting through 5G capabilities distributed in


everyday appliances such as the Internet of Things (IoT) at an average
rate of once every 18 seconds.34 Keeping in view the amount of data
produced daily, 2.5 quintillion bytes (2.5 quintillion is 2.5 x 1018),35 5G
will enhance data-collecting capabilities by enabling universal internet
connectivity of things and devices. 5G will be instrumental in
enhancing China’s dominance in the science of AI and other means
such as deep learning mechanisms, data science techniques, and the
fields of machine learning.
China is achieving excellence in 5G technology. Former Google
CEO Eric Schmidt and Harvard University Professor Graham Allison
admitted that China is far ahead in 5G technology than the US. China
will own a 5G future if the US does not make it a national priority,
Schmidt and Allison urged Biden Administration in a Wall Street
Journal article.36 China’s target has been to hit 5G coverage to 90 per
cent by increasing numbers of base stations in 2023.37 By September of
2023, China claimed to have the world’s largest 5G network reaching
the target of around 3.19 million 5G base stations. This policy is in line
with increasing 5G in China’s industrial production and management.
The data from the Ministry of Industry and Information Technology of
China shows that “the market scale of the industrial internet industry
has exceeded 1.2 trillion yuan ($167 billion) in the country, with more
than 8,000 5G-plus industrial internet projects and over 89 million
connected industrial devices.”38 5G has been integrated into 70 per
cent of China’s economic sector within three years.39
Additionally, 5G has another significant potential role for
tracking data. Since China has developed its satellite BeiDou combined
with a 5G telecommunication system, it can enable its government to
monitor, store, track, and evaluate the cell phone data of the users.40
The geolocation system through the BeiDou satellite is extended to
China’s BRI partner countries. Hence, 5G will be critical for industrial
and market transformation through geo-targeted advertisements.
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China will not only be able to control the networks on which the data
is transported, but its 5G will also enable it to access that critical data.41
This is the domain in which these technologies have interconnected
abilities which further increases China’s strategic and economic
leverages.
Quantum Computers
Quantum computers are advanced forms of computers based
on quantum physics with larger data storage capacity and greater
computational power than classical computers.42 Since quantum
computers can solve highly complex computations that cannot be
solved by the world’s supercomputers, this invention is another critical
technology. The breakthrough in the quantum computer was first
announced by scientists at Google in the US in 2019.43 They developed
the Sycamore computer which solved a numeric computation in 200
seconds that would have taken 10,000 years to solve by the world’s
most powerful supercomputer. After the invention by Google, the
International Business Machines Corporation (IBM) also announced a
classical bit-based technology that could solve the same problem in
2.5 days. Soon after that a team of Chinese physicists at the University
of Science and Technology at Hefei also announced a photon
computer with the ability to solve the mathematical computation
called the ‘boson sampling problem’ in 200 seconds, an operation that
would have taken a classical supercomputer 2.5 billion years to solve.44
In August 2022, the world’s largest search engine, Baidu Inc. of
China, announced the development of a 36-qubit quantum chip in
addition to its first quantum computer with a 10-qubit processor,
named Qianshi. Joining the global competition, China aspired to
launch this technology to outside users in real-world applications.
Similarly, the US tech-giant IBM and Alphabet Inc’s Google also plan to
launch more advanced forms of quantum computers by 2030.45 In
2023, Chinese scientists developed Jiuzhang 3.0 quantum computer
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prototype that puts China again in a leading position in the field of


quantum computer research and development.46
Quantum computers can have multiple uses including
macroeconomic and global financial markets for complex
computations. Quantum computers can also be used in astronomy to
enable scientists to understand the large universe. Most importantly,
these advanced computers can be instrumental to the safety of critical
data, but at the same time, they can endanger the IT security of other
systems. For now, an encryption system is applied to safeguard the
‘browsing, email, and banking data’. Quantum computers can break
encryptions which depend on the complex algorithms for which
classical computers can take years.47
Due to the unique properties of this invention, particularly its
requirement for data security and also cyber vulnerability, China has
joined the race with the US and the European Union (EU) by investing
heavily in this field, leading them to develop independent capabilities
yet in another field of critical technology. It is anticipated that a $16.4
billion investment would be made by global governments in quantum
development by 2027.48 Keeping in view the importance of this
technology, the competition in the domain seems very intense. China
would strive to overtake the US in this technology to safeguard its
national security interests. According to experts, advancement in this
field can even determine future global dominance among powers.
Artificial Intelligence (AI)
Artificial Intelligence (AI) with its super intelligent and
advanced functions has broad applications including strategic
information, economy, in various services, and in the military.49 China
is rapidly maximising its potential in AI. Around $150 billion are
allocated by China to develop the ‘innovation centre for AI’ by 2030.50
According to the Harvard Business Review, China is becoming a leader
not only in AI publications and patents but also in AI-powered
businesses of applications, i.e., recognition of speech and image.51
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During the presidency of Donald Trump, around $1 billion was


dedicated by the US to AI and quantum computing.52 This was not
enough to ensure the US primacy in this domain. A report by the
National Security Commission on Artificial Intelligence in March 2021
warned the US of its lack of preparedness to compete in and defend the
era of AI. It further warned that China can soon surpass the US in AI
supremacy which will have serious military and economic consequences
for the US. Since then, President Joe Biden has accelerated efforts in
these domains,53 leading to the creation of the National Artificial
Intelligence Research Resource Task Force in June 2021 for AI
innovations.54
In 2021, China’s spending on AI innovation was $10.38 billion,
which increased to $14.45 billion in 2023 and it is expected that
China’s market value of AI will go up to $26 billion in 2026.55More
breakthrough inventions in AI are underway. Despite China’s big
spending on AI, it is facing challenges in emerging as a leader in AI by
2030. The US is using its advantage in key technologies, especially
microchips, required for AI advancement. The US is preventing China
access to advanced microchips through sanctions. Despite challenges,
ChatGPT prompted China to create its own ChatGPT-like tools in
response to the US launching of ChatGPT on 30 November 2022.
China’s Baidu developed its own AI chat bot in March 2023 named
Ernie Bot 4.0.56 The US's desire to prevent China from becoming the
leader in AI demonstrates the technology's enormous potential for
power redistribution on global scale.
Besides China and the US, some other powers including
Germany and Russia, are also racing for increasing spending on AI
development.57 It brings along great potential as well as unpredictable
threats. According to Russian President Vladimir Putin, “Whoever leads
in this area will lead the world.”58 These tendencies reflect both
competition and techno-nationalist efforts, especially among
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countries that are politically and ideologically at odds with China and
Russia.

Implications
Rising Techno-Nationalism and
the Race for Semiconductors
The rapid advancement in technology and its vitality in
increasing national power are giving rise to techno-nationalism. The
way the scientific superiority of a nation, especially in the hi-tech
domain, is linked to its prosperity, and national security, can be termed
‘techno-nationalism’.59 As a response to intensifying technological
competition and keeping in view the technological leadership for
national security, many countries around the world announced
budgets and set goals to achieve national capabilities instead of
dependence on other powers. The EU and the US set targets for
securing maximum production of semiconductors by 2030.60 In the
spirit of national capacity and in response to the US curbs on exports
of microchips, in 2023 alone China imported microchip production
tools worth $40 billion to boost its indigenous production.61
Techno-nationalism is more prominent between China and the
US. It is not only the strategic rivalry; the ideological differences are
fostering ‘competitive techno-nationalist policies’ between them.62
Both countries have varied standards for the regulation and
governance of these technologies. Techno-nationalism shows a
normative divide. Democratic and state-centred governments can
employ technologically-enabled methods to empower drastically
diverse norms on data privacy, censorship, surveillance, digital
currency, transparency, and intellectual property. Internally, China
maintains its independent information and communication system. Its
technology diffusion to the world can give it leverage for controlling
information outside of its country. This has been considered a threat
by the US. This is one of the reasons for the US to prevent China’s
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leadership in these technologies. The techno-nationalist diverse


ideologies can destabilise the international order in unprecedented
ways.63 As quantum computers and specialised chips further power AI
applications, comparative competitiveness and comparative
advantage in these technologies will be central to the US and China’s
competition.64 The special characteristics of quantum computers and
AI will make them indispensable for other technologies in the coming
years. And so, the production of these technologies in large quantities
will also require a larger supply of microchips and semiconductors.
This scenario determines the future competition for rare-earth
resources and semiconductor production which is causing strategic
decoupling in key supply chains between China and the US.65 This will
prompt diversions or protections of markets and services, the key
components, raw material and technical knowledge. The EU and Japan
are also concerned and willing to raise protections against China.
This tendency of techno-nationalism will keep on interfering in
the trade of high-tech infrastructure among countries leading to
alliances and distribution of power. The US is pushing its close allies for
anti-China tech alliances. The alliances will also be defined by interests
of countries and their ideological inclinations. This development poses
challenges and also opportunities to other countries for economic,
strategic and diplomatic benefits. Some countries with advanced
infrastructure for production of these technologies will play neutral
between the two countries. Malaysia is one such example which is
taking advantage of the Sino-US tech competition.66 Malaysia is
becoming a new hotspot for high-tech firms because of its well-
established infrastructure for the production of microchip and
semiconductors.
Private Sector and Control over IT Governing Standards
In the debate over the governing standards of emerging
technologies, there is also the aspect of the private sector which is
heavily involved in developing and controlling advanced
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technologies. In the US, mostly private sector big enterprises control


advanced technologies. The private sector ownership of many high-
tech companies and also their globalised chain of production and
utilisation can scarcely give leverage to the governments to make
policies and regulations. Alibaba, Alphabet (Google), Amazon, Apple,
ByteDance, Meta (Facebook), Microsoft, and Tencent are some of the
examples of big private high-tech companies with potential leverage
in shaping the governing standards of the emerging technologies.67
This is especially true when technologies are created solely for
financial gains and their development paths are completely
determined by market forces. These companies contribute to the
revenues of the host countries. In case the US and China impose
restrictions on these private firms due to their techno-nationalist
tendencies, it will also result in the financial losses and reduction in
further investments.
High-tech enterprises work in the market ecosystem of the US,
China, and other countries. Mostly these enterprises in the US work
independently. Even though Chinese State-Owned Enterprises (SOEs)
are heavily involved in the infrastructural projects of BRI, the private
companies have a greater share of GDP at around 60 per cent.
Moreover, China’s private companies contribute to innovation in the
range of 70 per cent, urban employment at 80 per cent, and new jobs
at around 90 per cent. Similarly, private wealth is also responsible in
China for 70 per cent of investments and 90 per cent of exports.68 The
global 5G revolution is being led by Huawei, which is eager to export
its innovation. Despite the remarkable success of China’s private
technology sector, Chinese government enjoys a certain level of
governance control over these companies. There is a stark difference
in the government systems of the US and China. China maintains a
centralised system. Therefore, the regularisation of its private sector is
also different. However, as compared to China, the US may have less
control over the policies of its private high-tech vis-a-vis its responses
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to China. This may give the US less leverage to undertake protective


measures by prohibiting China-led technology in its economic
ecosystem. The consequences of this potential misuse of these
technologies can be globalised due to the integration of economies
and growing connectivity.69 This is the reason that governing
standards of these technologies prompted US sanctions against
China’s 5G.
Cyber Security Concerns
The mutually reinforcing capabilities of the critical
technologies, their proliferation across all fields, their infosphere in
which data is transferred or received, and different governing
standards of data privacy have potential consequences for
cybersecurity. Cyber threat is not limited to one sector or a single
country. It is now more overarching due to the dependence on the
cyber infosphere worldwide. The information access through Chinese
5G because of its intelligence value is seen from a national security
perspective in the US. The interconnectedness of information-based
technologies, communication, and data privacy remains vulnerable to
breaches and cyberattacks.70
Some of the critical technologies as explained in this paper can
give leverage to one country over another in cyber protection. For
instance, quantum computers may be used to protect as well as attack
other computers for data theft. Data encryption relies on the ability of
computers to generate random secret numbers. Cyberattacks can take
place in case of the random numbers of classical computers. While
quantum computers can generate such random numbers, which may
not be vulnerable to cyber-attacks, quantum computation bears the
potential to threaten the operations of the cryptographic protocol.
According to estimates, a quantum computer will be in existence by
2035 with the ability to crack the crucial RSA2048 cryptographic
scheme which is so far considered as a reliable encryption for the
safety of data.71 The block-chain technologies including the five major
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crypto currencies, “Bitcoin, Ethereum, Litecoin, Monero, and ZCash are


considered to be vulnerable to attacks from upcoming quantum
technologies.”72 There is a private key for storage of crypto currencies
which can be accessed by hackers.
The conflicting governing standards for these technologies
and their role in increasing the country’s overall capabilities will also
have consequences for regulating the proliferation of these
technologies. Big power politics and division can undermine the
effectiveness of many multilateral organisations. Dividing the world
into two camps of techno-political spheres of influence can also have
consequences for future dialogue-related global risks for
cybersecurity. The non-state actors can benefit from this polarisation
and threaten cyber safety in the world.
From Geopolitical to Techno-Political Rivalry
The development and use of information-based critical
technologies underpinned by ideological, nationalist, and political
motives can create a techno-political sphere of influence. The term
‘techno-political’ can be used for the politics in the digital age. It
implies the policies of countries in response to the technology-led
influences on the country’s overall power configuration, political
system and social norms and relations across borders. Given the
broader impact of critical technologies, countries will not only be
involved in geopolitical contentions but the technologically-advanced
countries will be subject to techno-political disputes. As these
technologies are now central to economic, security, and narrative-
building, setting their governing standards for the use of these
technologies is aimed at a greater advantage over the contender.
Since China and the US follow different political systems and values,
they will steer different political objectives to shape the global politics
in favour of their respective objectives. Both the operation of these
technologies and commerce in these technologies will shape political
influence. This techno-political competition is rising between China
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and the US.73As mentioned earlier, both countries are developing


independent capabilities in critical technologies. The impact and
influence of these technologies will also vary with their different
governing standards. China and the US, both have their fears and
concerns about each other. The way the US is threatened by China’s
data surveillance or espionage through its 5G capability, China is also
concerned about the US information war and its liberal agenda.
Countries like Germany and the EU are also concerned about data
privacy due to large-scale Chinese ingress in technology investments.
Apart from cybersecurity concerns of economic losses or
breaching of military and defence-related data, there are also fears of
political manipulations, election results and leveraging these
technologies for geopolitical gains. Transferring these technologies to
allies and like-minded partners can create contending groups and
alliances. Moreover, western countries are also concerned about
increasing authoritarian tendencies. Additionally, European counties
are concerned about how the data surveillance capabilities will have
implications for the democracies. According to them, “Chinese high-
tech businesses not only support authoritarian and oppressive
regimes, but they also encourage the spread of anti-liberal ideas about
government and society.”74 So far, the world has been dominated by
the US-led infosphere. However, China as an emerging leader in the
production of these critical technologies will also be enabled to
control information, big data, eventually creating political influence.
This will create divided governing standards of critical technologies.
Mainly the defence policies of countries are made in response to
geopolitical conditions. Contemporary big power politics will be more
about the techno-political interplay.
China’s Technology-Enabled Economic Gains
The power of technology is more encompassing than military
superiority. In the past, military superiority would give the country a
central place. In the contemporary world, the development,
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production, sale, and, application of critical technologies can increase


all kinds of capabilities. Technology will continue to grow and it will
become a concern for national and economic security. The world’s
economy is now digitalised and the networking of all commercial
activities is dependent on IT. The demand for these technologies is
increasing. The production houses of these technologies have a never-
ending scope for making wealth. Both the hardware and software and
its application industries are the biggest beneficiaries. Furthermore,
according to research conducted by the World Bank, by 2030 China
will economically further pull ahead of the technologically developed
countries because its economy will be further strengthened through
innovations in areas of comparative advantage.75 The scale and
potential of China’s enlarging digital economy is the result leveraging
the empowerment of expanding 5G in the industrial and financial
sectors of China.76
AI alone is now considered a new frontier in China-US
competition for comparative economic gains. China focused on AI in
the last decade and now this high-tech is supporting China’s economy.
China is the leading country in research, development, and economy
linked to AI. According to Stanford University, China is among the top
two countries in AI vibrancy in the world. One-third of all scholarly
publications and citations in the discipline were produced in China,
which also drew $17 billion in private-sector investment. The analysis
by McKinsey projects indicate that AI may add over $600 billion to
China’s GDP by 2030, with $335 billion of that amount coming from
autonomous vehicles alone. This is due to the way that China has
connected AI-driven consumer apps like Alibaba, ByteDance and
Taobao. The integration of AI with Taobao, the largest e-commerce
app in China, can give it one billion customers77 by smart searching or
suggestions with increased efficiency for transactions. The e-
commerce platform or the extensive availability of products on social
apps has further increased China’s advantage in digital economy.
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Race for Autonomous Arms in Military Domain


The automation of arms is more relevant to the domain of
robots and AI functions. Autonomous weapons, automated armed
vehicles, and super intelligent decision-making against the adversary
during wartime; robots, automated precision drones, and espionage
capabilities, are only a few perceived functions of AI in its military
application.
For some experts, AI is just an extension of human intelligence
supported by machines. But for others, the application of this
technology in various domains of modern defence systems such as
nuclear weapons would have consequences. AI’s military applications,
such as Intelligence, Surveillance, and Reconnaissance (ISR) operations,
sensor data processing and interpretation, or geospatial imaging
analysis, will reduce the role of humans in warfare and ultimately alter
the nature of the conflict.78
As both China and the US have interest in advancing their
defence capabilities by employing critical technologies, it will be hard
to determine whether it would be China to develop superior AI arms
or the US will come out as a victor in this AI arms race. However, it is a
fact that the US and China are locked in competition for automation
and AI hegemony. Approximately, a 45 per cent increase is noticed in
the US investment in AI projects between 2016 to 2022.79About 685
active AI projects are on the agenda of the US Department of Defence
(DOD) under the project Maven to integrate AI into military structures.
The US has already used these AI algorithms to determine targets in
military operations in Syria and Iraq.80
China wants to rival the US’s military prowess by dominating
the technologies related to the fourth industrial revolution.81 China
also decided in 2020 to integrate AI into the military structures by
2025. It anticipates itself as a global leader in AI by 203082 and also
seeks the integration of civil and military AI forces to make its armed
forces more intelligentised, meaning to equip them with disruptive
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technologies of new era warfare.83 The discovery of nuclear weapons


technology was different from the development of these critical
technologies. There were limitations on its production and expansion.
However, these technologies are already well integrated into the
systems on a large scale with continuous evolution creating security
vulnerabilities in many unprecedented ways.

Conclusion
The competition among great powers is traditionally analysed
in the domains of diplomatic, military, and hard power. However,
global information infrastructure is a more comprehensive domain for
great power competition in the new era. This study found that critical
technologies are vital for acquisition of power because of their
interlinked, interconnected abilities, wider applications and strategic
use of information. The emerging technologies discussed in this paper
are related to the rapid advancement in ICT. The innovations in the
listed technologies are bringing changes in the global economy,
politics, and security in unprecedented ways. The strategic use of
information complemented by advanced technologies can strengthen
the comparative advantage and relative gains of one country while
weakening the other country. The struggle for oil and advanced
nuclear weapons was central to power competition between powerful
countries which is still true. Now the biggest domain for achieving
greater power against a rival lies in increasing potential in critical
technologies. These technologies can substantially shift the military
and economic balance.
Since China announced its ‘Made in China 2025’ strategy in
2015 and increased R&D, it has achieved much ground to close the
gap with US in critical technologies. Keeping in view, China’s growing
potential in AI, quantum computers, space, cyberspace and 5G as
studied in this paper, qualifies China as a global competitor to the US.
It was technology and innovation that gave the US superpower status.
120 REGIONAL STUDIES
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Therefore, China’s prowess in this domain has threatened the US


position and has prompted it to contain China. Secondly, the
developments in these domains also suggest that both countries are
not seeking parity and instead strive to achieve superiority in these
technologies because of the huge potential that they bear to give a
powerful position to the country that would lead in these
technologies. Since the US is the largest economy and the most
powerful country, and China is the second largest and a qualified
contender to the US primacy, the strategic competition between the
two are linked to the global power dynamics because of their huge
impact.
Growing techno-nationalism is leading the world to new
dynamics in the global power structure and security landscape. The
race for microchips, semiconductors, essential resources for these
advanced chips, division on regulation of these technologies, as well
as their impact on global supply chain and trade have a massive
impact in redistribution of power and influence globally. China’s
efforts to excel in critical technologies and US’s preventive measures
will also lead to a new conflict. This struggle also hinders them from
agreement on governance of critical technologies and rules for their
proliferation. As studied, these phenomena, in view of offensive
realism and power transition theory, is driving them for continuation
of independently developing capabilities for their desire for power and
domination. Techno-nationalism will also adversely impact scientific
knowledge as a global public good.
As in power transition theory, creating parity or overtaking an
established power can cause war. The way the US critically views
China-led technologies and considers it a challenge to the western-led
normative order in the world is leading the conflict to ideological
competition. The divide over governance of these technologies
between the two largest producers of the same, and the nationalist
tendencies and strategic rivalry between them for power acquisition
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also increases risk for cybersecurity and lack of cooperation in this


domain against security risks posed by non-state actors or cyber
terrorism. Since the domain of competition is much broader due to the
wider scope of the applications of these technologies, countries will
have more leverage for political gains through technology. As
previously the contestation between countries was more driven by
geopolitical interests, in the current scenario it will be more driven by
politics of technologies. The country leading in technology will have
more political influence globally with propensity of shift in power.
The technology enabled economic gains for China because the
size of its population and production capacity is another indicator for
the role of these technologies in changing the power equation in the
world. China’s growing prowess in space technology and the
integration of AI in defence systems is also making China a serious
contender in military might with the US.
These findings show that the domain of critical technologies have
scope and potential for changing the power equation between China
and the US. Even if achieving global hegemony is not desired by China,
the intense competition in these technologies as proved by this
research has prospects for conflict with far-reaching consequences for
the global economic future, peace, and security. Therefore, there must
be limitations through regulations and a global consensus on the
proliferation and governance of these critical technologies in the same
way that nuclear technology has been regulated.
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Notes and References

1
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2
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3
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4
Xiangning Wu, “Technology, power, and uncontrolled great power
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Robert D. Atkinson and Ian Tufts, “The Hamilton Index, 2023: China
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7
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10
Xiangning Wu, “Technology, power, and uncontrolled great power
strategic competition between China and the United States,”
SINO-US COMPETITION 123
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China International Strategy Review no. 2 (2020): 99–119,


https://doi.org/10.1007/s42533-020-00040-0.
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17
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124 REGIONAL STUDIES
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20
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21
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22
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23
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24
Andrew Jones, “China's Tiangong space station,” 24 August 2021,
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25
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26
Arjun Kharpal, “China once said it couldn’t put a potato in space.
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27
Jonathan E. Hillman, “The Digital Silk Road: China's Quest to Wire the
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28
Mercy A. Kuo, “China in Space: Impact on China-US Competition:
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29
Ibid.
30
Ibid.
31
Ibid.
32
Lyu Jinghua and Gaurav Kalwani, “Navigating the Us-China
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33
Joseph Marks, “The Cybersecurity 202: The United States is still
number one in cyber capabilities,” The Washington Post, 28 June
2021, https://www.washingtonpost.com/politics/2021/06/28/
cybersecurity-202-united-states-is-still-number-one-cyber-
capabilities/.
34
William Schneider, “China 5G, and Dominance of the Global
“Infosphere,” Briefing Memo China, Hudson Institute, September
2019.
35
Ibid.
36
Arjun Kharpal, “Pathetic performance has left U.S. ‘well behind’
China in 5G race, ex-Google CEO Eric Schmidt says,” CNBC, 17
February 2022, https://www.cnbc.com/2022/02/17/us-well-
behind-china-in-5g-race-ex-google-ceo-eric-schmidt-says.html.
37
“Nation’s 5G penetration rate to hit 90% in 2023, thanks to rapid
networking efforts: China Mobile,” Global Times, 27 June 2023,
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38
“Tech in focus to push new industrialization,” China Daily, 21
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39
“China improves 5G infrastructure to upgrade industries,” China
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202310/23/WS6535d82e498ed2d7b7e9e29e/china-improves-5g-
infrastructure-to-upgrade-industries.html.
40
Ibid.
41
Gabe S. Arrington, “It’s not just 5G: China’s telecom strategy
needs to be countered in space,” 14 February 2022,
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42
Donna Lu, “What is a quantum computer?,”
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computer/.
43
Sonia Fernandez, “Achieving Quantum Supremacy,” 23 October
2019, https://www.news.ucsb.edu/2019/019682/achieving-
quantum-supremacy.
44
Alex Capri, “Quantum computing: A new frontier in techno-
nationalism,” Hinrich Foundation, August 2021.
45
Ibid.
126 REGIONAL STUDIES
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46
“China improves 5G infrastructure to upgrade industries,” China
Daily, 23 October 2023, https://govt.chinadaily.com.cn/s/
202310/23/WS6535d82e498ed2d7b7e9e29e/china-improves-5g-
infrastructure-to-upgrade-industries.html.
47
Matthew Sparkes, “Quantum computers can break major
encryption method, researchers claim,” New Scientist, 5 January
2023, https://www.newscientist.com/article/2353376-quantum-
computers-can-break-major-encryption-method-researchers-
claim/.
48
Alex Capri, “Quantum computing: A new frontier in techno-
nationalism,” Hinrich Foundation, August 2021.
49
Darrell M. West and John R. Allen, “How artificial intelligence is
transforming the world,” Brookings Institution, 24 April 2018,
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transforming-the-world/.
50
Xie Yuand and Meng Jing, “China aims to outspend the world in
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51
Daitian Li,Tony W. Tong,and Yangao Xiao, “Is China Emerging as the
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52
Taylor Hatmaker, “White House announces $1B investment for AI
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53
Sam Shead, “U.S. is ‘not prepared to defend or compete in the A.I.
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54
White House, “The Biden Administration Launches the National
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55
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56
Che Pan, “OpenAI’s ChatGPT took the AI world by storm a year ago
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57
“Germany plans to double AI funding in race with China, U.S.,”
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23/.
58
James Vincent, “Putin says the nation that leads in AI ‘will be the
ruler of the world’,” The Verge, 4 September 2017,
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59
Alex Capri, “Techno-Nationalism: What is it and how will it change
global commerce?,” 20 December 2019, https://www.forbes.com/
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60
Akinori Kahata, “Beyond U.S.-China Technology Competition,” CSIS,
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61
Charlotte Trueman, “China imported $40bn worth of chip making
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62
Alex Capri, “Techno-Nationalism: What Is It And How Will It Change
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63
Ibid.
64
Ibid.
65
William Schneider, “China, 5G, and Dominance of the Global
“Infosphere,” Briefing Memo, Hudson Institute September 2019.
66
Sheila Chiang, “Malaysia emerges as a hotspot for semiconductor
firms amid U.S.-China chip tensions,” CNBC, 4 Aril 2024,
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________________________________________________________________

https://www.cnbc.com/2024/04/04/malaysia-emerges-as-a-
hotspot-for-chip-firms-amid-us-china-tech-war.html.
67
Camino Kavanagh, “New Tech, New Threats, and New Governance
Challenges: An Opportunity to Craft Smarter Responses?,” Carnegie
Endowment, 28 August 2019, https://carnegieendowment.org/
2019/08/28/new-tech-new-threats-and-new-governance-
challenges-opportunity-to-craft-smarter-responses-pub-79736.
68
Amir Guluzade, “The role of China's state-owned companies
explained,” 7 May 2019, https://www.weforum.org/agenda/
2019/05/why-chinas-state-owned-companies-still-have-a-key-role-
to-play/.
69
Camino Kavanagh, “New Tech, New Threats, and New Governance
Challenges: An Opportunity to Craft Smarter Responses?,” Carnegie
Endowment, 28 August 2019, https://carnegieendowment.org/
2019/08/28/new-tech-new-threats-and-new-governance-
challenges-opportunity-to-craft-smarter-responses-pub-79736.
70
William Schneider, “China 5G, and Dominance of the Global
“Infosphere,” Briefing Memo China, Hudson Institute, September
2019.
71
Joseph J.Kearney and Carlos A.Perez-Delgado, “Vulnerability of
blockchain technologies to quantum attacks,” Array, Volume 10,
July 2021.
72
Ibid.
73
Barbara Lippert and Volker Perthes (eds.), “Strategic Rivalry
between the United States and China: Causes, Trajectories, and
Implications for Europe,” SWP Research Paper 4, April 2020,
https://www.swp-berlin.org/10.18449/2020RP04/.
74
Ibid.
75
“China 2030 Building a Modern, Harmonious, and Creative
Society,” The World Bank Development Research Center of the State
Council, https://www.worldbank.org/content/dam/Worldbank/
document/SR2--161-228.pdf.
76
Juan Pedro Tomás, “China to end 2023 with 5G penetration of
90%, China Mobile says,” 2 January 2024,
https://www.rcrwireless.com/20240102/5g/china-end-2023-5g-
penetration-90-china-mobile-says.
SINO-US COMPETITION 129
________________________________________________________________

77
Amit M. Joshi, “How AI gives Taobao’s one billion customers the
personal touch,” 16 April 2024, https://www.imd.org/ibyimd/
magazine/how-ai-gives-taobaos-one-billion-customers-the-
personal-touch/.
78
United Nations, “The Militarization of Artificial Intelligence,”
August 2019, New York.
79
John Keller, “Pentagon to spend $874 million on artificial
intelligence (AI) and machine learning technologies next year,”
Military Aerospace Electronics, 4 June 2021,
https://www.militaryaerospace.com/computers/article/14204595/
artificial-intelligence-ai-dod-budget-machine-learning.
80
Congressional Research Service, “Artificial Intelligence and
National Security,” 10 November 2020, https://sgp.fas.org/
crs/natsec/R45178.pdf.
81
Michael C. Horowitz and Lauren Kahn, “DoD's 2021 China Military
Power Report: How Advances in AI and Emerging Technologies
Will Shape China’s Military,” Council on Foreign Relations, 4
November 2021, https://www.cfr.org/blog/dods-2021-china-
military-power-report-how-advances-ai-and-emerging-
technologies-will-shape.
82
Dan Milmo, “TechScape: how China became an AI superpower
ready to take on the United States,” The Guardian, 8 December
2021, https://www.theguardian.com/technology/2021/dec/08/
techscape-china-ai-united-
states#:~:text=In%20May%202017%20AlphaGo%20defeated,all%
20AI%20venture%20funding%20globally.
83
Mark Pomerleau, “China moves toward new ‘intelligentized’
approach to warfare, says Pentagon,” C4isrnet, 2 September 2020,
https://www.c4isrnet.com/battlefield-tech/2020/09/01/china-
moves-toward-new-intelligentized-approach-to-warfare-says-
pentagon/.

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