China “plans to dominate the world’s digital infrastructure,” Attorney General William Barr has declared. A “truly Orwellian surveillance state” is just around the corner, Secretary of State Mike Pompeo argues. In fields from facial recognition to artificial intelligence to 5G telecom technology, it often seems like China has already become the world’s technology superpower.
But dig deeper and China’s position looks weaker. Take Huawei, which the Trump administration argues exemplifies Beijing’s unfair state subsidies and corporate espionage. The company also represents the best of Chinese tech: It has capable products at competitive prices, and its smartphones and 5G equipment have found willing customers worldwide.
Huawei also illustrates China’s deep dependence on foreign — especially American — technology. As of Sept. 15, new Commerce Department regulations make it almost impossible for any company to sell Huawei computer chips without a license from the American government. But China cannot produce most of the essential advanced chips on its own. Beijing’s reliance on American tech demonstrates the United States’ extraordinary economic power — and how America’s slipping technological edge puts this power at risk.
Today’s advanced computer chips cannot be designed or manufactured without American tech. American firms like Cadence Design Systems and Lam Research make products that are all but irreplaceable. By cutting off access to these products and the chips they produce, the Commerce Department can halt the operations of almost any tech company worldwide.