The West’s insecurities in the Sino-US tech war

While China’s high-tech industry does not necessarily pose a threat to the United States, Huawei’s fifth-generation (5G) technology and equipment have left the US crippled with anxiety as it lacks the confidence to lead the new technological revolution.

The BAT (Baidu, Alibaba and Tencent) companies have left an impression on the Americans with their increased competitiveness. The e-commerce economy and the sharing economy have left a psychological scar on the West, especially after the sales of China’s “Double 11” shopping fest put America’s “Black Friday” to shame. In the past, the United States has always been proud of its “technology and consumption” combo but has lately fallen behind China’s raging digital economy.

Huawei’s 5G technology and global competitiveness have become the target to beat in the United States’ eyes. China in the information-technology era has become the root of America’s anxiety.

The United States does not feel helpless in the face of Huawei’s strength but instead feels it still has enough scientific and technological tools to take down the Chinese company. But despite facing pressure from the US, Huawei has managed to break through a difficult market. At one point, even Google requested lifting the US government’s ban on the Chinese firm.

As Huawei took on the challenge, the West also faced its own set of setbacks in its technological warfare against China.

The main battleground of the Sino-US conflict has extended to artificial intelligence (AI) and big data. China has a large network of users, particularly users of mobile Internet. In the IT era, China has built a mobile payment network with full coverage, creating a digital economy that easily surpasses the United States’. In the AI era, China has a cost-effective 5G tech and equipment supplier as well. A wide array of variables such as the industrial Internet, the Internet of Vehicles and the Internet of Things will allow China to put out technology at a lower cost.

China’s filings under the Patent Cooperation Treaty have grown at an annual rate of more than 10% in the past decade, the only country with a double-digit growth rate under the PCT. At this rate, China is expected to surpass the United States in three years.

American high-tech businesses have deep ties with Chinese companies. According to several sources, Apple, Qualcomm and Intel have more than U$100 billion in business with Chinese tech companies. Chinese accounts supply more than 60% of Qualcomm’s total revenue, nearly 50% for Intel and about 25% for Apple. Those three companies also use product chains in China to enter the global market. If Sino-US tech is decoupled, both sides are guaranteed to suffer losses. China will have to retreat to its domestic market and American tech companies may have to rely on the global market, which may not be so reliable in the long run.

The abilities of both sides are not equal. However, the United States should not try to overtake China with strong-arm tactics. The integration of Chinese and American technology, in the end, is still the right way forward.

This article was first published on ATimesCN.com and was translated by Kamaran Malik.