The struggle for technological supremacy – the tech race of the USA and China
On 7 May 2020, the Institute for Foreign Affairs and Trade (IFAT) hosted an online roundtable discussion with the title The struggle for technological supremacy – the of race the USA and China. Mr. Csaba Moldicz, head of research at Oriental Business and Innovation Center of the Budapest Business School and Mr. Tamás Novák, scientific and technology attaché were participating as panellists.
In his opening presentation Mr. Csaba Moldicz pointed out that based on the lead indicators of technological development, it was clear that the US still had dominant positions in more segments of the technological competition than China. Those indicators where China is better than the US are mainly to be explained by the size of the country, e.g. the total number of scientific publications or the number of graduate students with science and engineering degrees. Besides there are new areas, where China concentrates financial and human resources and applies direct state intervention. This strategy has brought substantial results in recent years in artificial intelligence technology and 5G infrastructure. The difference between the American and Chinese approaches is that the US can rely on its already existing self-sufficient technological ecosystem created by American firms, and supported by its political allies, however China is just about to build another one, which will most likely to be a closed-loop ecosystem with self-sufficiency almost at every stage. Therefore, the dispute of whether Chinese firms are granted access to the mature European market is crucial.
Tamás Novák highlighted that fear of China has been growing in the USA also beyond topics like 5G networks and trade war. He added that from 2017 to 2018, R&D expenses in the USA increased with an unprecedented extent which means a record GDP proportional rate. Today the country spends roughly three times more on R&D than China.
Csaba Moldicz emphasized that China was increasingly able to attract students, talents, and scientists, more and more of them arriving from BRI countries. Tamás Novák pointed out that in the US many of those who are in positions that require high level of scientific and engineering skills were born abroad, which proves the attractiveness of the country in this field. In higher education the number of foreign students is high, however, the crisis may change this through the loss of jobs and travel restrictions. Referring to a study, he described the tech race as ‘superpower marathon’ for which the USA is not entirely prepared. The pluralist political system could easily be a barrier to the implementation of a concentrated R&D strategy.
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