China's Challenge Is America's Opportunity

Wednesday, August 8, 2018

The New York Times

By L. Rafael Reif

American tensions with China over international trade spring partly from concerns that China gives tax breaks to its companies to boost their exports, restricts access to its markets, forces foreign companies to transfer their technology to Chinese companies, steals intellectual property and pursues industrial espionage.

Expert, decisive action is needed to stop these practices in defense of fair international competition and America’s strategic and commercial interests. But it would be a mistake to think that an aggressive defense alone will somehow prevent China’s technological success — or ensure America’s own.

China is not an innovation also-ran that prospers mainly by copying other people’s ideas and producing them quickly at low cost. The country is advancing aggressively to assert technological supremacy in critical fields of science and technology.

In quantum computing, China’s Alibaba is battling Google to achieve the technical milestone of “quantum supremacy.” In 5G technology, the three largest global players are Nokia of Finland, Ericsson of Sweden — and Huawei of China, which is spending more than two and a half times as much on research and development as its two rivals. The Fuxing bullet train, designed and built in China, is the world’s fastest in regular operation.

China is also a world leader in fields like mobile payment and facial and spoken language recognition, where Chinese companies have made the most of their advanced algorithms and their advantages in scale and data access. It is also making bold national investments in key areas of research like biotechnology and space, and directly supporting start-ups and recruiting talent from around the world. And China has unrivaled capacity to rapidly ramp up large-scale production of advanced technology products and quickly bring innovation to market.

In short, stopping intellectual property theft and unfair trade practices — even if fully effective — would not allow the United States to relax back into a position of unquestioned innovation leadership. Unless America responds urgently and deliberately to the scale and intensity of this challenge, we should expect that, in fields from personal communications to business, health and security, China is likely to become the world’s most advanced technological nation and the source of the most cutting-edge technological products in not much more than a decade.

But China’s technological dominance is not inevitable. The United States has tremendous assets, including the immense global strength of our technology sector. This partly depends on a unique formula no other country has been able to copy: the large number of first-rate American universities pursuing advanced research with long-term federal support. This relationship is rooted in a national culture of opportunity and entrepreneurship, inspired by an atmosphere of intellectual freedom, supported by the rule of law and, crucially, pushed to new creative heights by uniting brilliant talent from every sector of our society and every corner of the world. For decades, these factors have helped make our nation the most powerful scientific and technological engine on Earth.

Every American can take pride in this distinctive system. But there is nothing automatic about its excellence.

While China is moving forward rapidly with a unified strategy called Made in China 2025 to become the world leader in manufacturing and technology, the United States has not made technological pre-eminence a matter of broad national focus. If we want to remain the most, or one of the most, technologically advanced nations in the world, we should double down on our strengths and make that vision real.

For instance, to capitalize on the superb American pool of artificial intelligence research talent, we need the kind of long-range planning that helped build United States strength in nanotechnology: a stable, targeted, multiyear funding strategy that coordinates the investments of multiple federal agencies. The White House recently created a select committee on artificial intelligence; this good first step needs to be the start of an aggressive race to the frontier of knowledge. The same is true in quantum computing; a modest effort being floated in Congress to support advanced research should be larger, faster and more ambitious.

We also need to take a fresh look at industry-university-government partnerships as mechanisms for strategic co-investment in early-stage research. In the 1980s, such efforts, though far from perfect, helped the American semiconductor industry survive and thrive. Stressing what worked and discarding what didn’t, we need to collaborate actively across those three sectors in the same spirit now to make our entire innovation system faster and more effective, so ideas generated in the United States get to market in the United States first.

At the same time, government, industry, schools and universities should boldly develop our homegrown talent, of every age and in communities across the country. An enduring benefit of the G.I. Bill and America’s response to Sputnik was that Americans became, for some decades, the best educated people on Earth, and we can do it again.

Finally, we should make sure we have an immigration system that welcomes the best talent from anywhere in the world, so that people hungry for opportunity continue to see America as the best place for their education and the best place to spend their lives and careers, enabling the United States to reap the benefit of their creativity and drive.

Cultivating these assets will also provide a position of strength as the United States negotiates to stop unfair business and market practices.

As a nation, the United States needs to change its focus from merely reacting to China’s actions to building a farsighted national strategy for sustaining American leadership in science and innovation. If all we do in response to China’s ambition is to try to double-lock all our doors, I believe we will lock ourselves into mediocrity. But if we in the United States respect China as a rising competitor with many strengths we can learn from, that view will inspire America to be its incomparable best.