US Has to Out Innovate China in Long Term Technology Competition

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China is seeking technological self-sufficiency and even superiority in key industries. It has concentrated military spending on advanced technologies. Its Belt and Road Initiative proposes a trillion-dollar investment program to project China’s influence across the world. What is China’s grand design, and how should the United States respond to it?

China has ripped out the old developing world economy and creating a technological economy. The Belt and Road is offering that technological transformation to other countries in exchange for joining China’s economic bloc.

China’s debt is owed to itself and the funds were used to build out its infrastructure. China will not collapse and is a powerful innovative economy. China has cut exports from 36% in 2009 to 18% now.

The tariffed industries were mostly ones that China wanted to exit anyway. This is just forcing a more accelerated and more painful exit than the one China was already making.

David P. Goldman is a columnist at Asia Time and was global head of debt research at Bank of America and head of credit strategy at Credit Suisse.

David Goldman recommends that the US should:
* Work with India, Japan and South Korea to offer an alternative Belt And Road Initiative to support the industrial and technological transformation of developing countries
* Engineer a brain drain from China where top scientists, technologist and entrepreneurs are enticed to move to the US
* US should focus on drone swarms and new military technology and not aircraft carriers or F-35s.
* Require semiconductors to be made at US-based fabs
* We need to recreate powerful corporate laboratories

This will be a very long innovation war. The US has to return to the policies that ensure that victory in the past the US has underestimated China but Goldman believes the new policies will let the US win.

SOURCE- Youtube Heritage Foundation, David P. Goldman
Written By Brian Wang, Nextbigfuture.com

62 thoughts on “US Has to Out Innovate China in Long Term Technology Competition”

  1. And you think you can do better? How are you making a living if not making a claim or believing you’re an expert in your field and offering your service for a price?

    Sure, other experts are cults and but not you, spoken like a true imbecile.

  2. It seems that instead of this idea of competition, its more that countries are developing core competencies and specializations. Korea is the chip memory king. Taiwan is the TSMC and mobo king. Japan has its maglev and stem cells. Likewise, China has decided to go the safe route and largely stick to supersize and extend already existing tech, its engineering, but its not groundbreaking in the sense of breaking into totally new fields. Also what does an expert on debt have any technical scientific and engineering expertise?

  4. I am not a communist, but I loved my country as others.
    Your mind is still frozen. as far as the subs are in the ocean, say just outside first link barrier, do you need to know where it is?

  5. When Nixon went to China, the media was all Panda hugging and shit because they were not a threat to our power, now they are. They have not changed for the worse, in fact, the government is much more enlightened now compared to the time Nixon visited them. Not saying they are angels now, but neither is our own extractive elites.

  6. “My comment really was made in jest”, You sure seems to spend a lot of energy thinking about how a nuclear war is survivable. I got this image of you riding your bomb down the hatch with your cowboy hat going “Yeeha”.

    “In the end, an authoritarian regime is going to use environmentalism as a justification”

    That is delusional thinking. Environmentalists are home grown and have their agenda which are very different from any dictator in the world. As for the Chinese government, they have better things to do than to collude with environmentalists. In fact, the Chinese extractive elites are no different than our extractive elites in motivation, it is all about what they can get for themselves. They just wanted to get by. This “them evil we righteous” thing is a bunch of bull. Take the Germans, Once upon a time, they were a nation, then they were the evil Nazis, now they are good again. We did not fight them because of their ideology. At that time, we were every bit as anti semitic as the Germans. we were not a nation in crisis so no gas chambers. We fought them because the Nazis became too powerful and was threatening our power. Now they are nice folks again because they are not as powerful and not a threat to us. They were the same people all along.

  7. When the nukes start flying you expect all parties to be perftly rational? Ok …. Even if a full exchnage is avoided I will tell what will happen. Starvation. A few well placed EMPs and the electirical grid will be down how long? With out electricity good luck using fuel. Make sure you have a horse handy.

  9. There is a difference between nuclear testing and the throwing of 1000s of multi-megaton city busters. I know I woundn’t want to be around afterwards. I hope you will be.

  10. Idiots like you would love to sacrifice other people for your own gain, world will be a much better place without your type.

  12. Get from your link, Xiaoqing Zheng, is an American citizen. why did you say china steal …. ?

  14. agree. but check the “creative” news in Nextbigfuture, all are created in the west. Unfortunately, creative cannot make you rich in most cases. If chinese steal technologies, american steal information.

  15. The number of patent applications pertaining to Graphene coming from China would seem to disagree with your statement.

  17. People talk about China stealing technology. Let me break it to you, all ascending countries not at the forefront of technology steal. It is simply the most expeditious way to get ahead. The U.S. did it when we were a country bumpkin of a country compared to the Europeans. It is not that easy to take a look at a finished product and be able to figure out how to make it, otherwise the entire world would be doing it. Once they get to the forefront of technology, I have no doubt that they will innovate like other countries do. In fact, this is already happening in many areas. They took an intercontinental missile and re-configure it to target war ships. No one had a missile like that before they created one. They came up with the world’s first quantum radar, capable of detecting even stealthy planes at a 100 Km. Huawei will not be able to get to the top of 5G without inventing a lot of stuff to overcome problems along the way. As David Goldman said, we should be more concerned about their ability to innovate compared to their ability to steal. We used to bash the Japanese about copying the U.S. Now they are a the forefront in many areas. The best in the world. This will also happen in China.

  18. I am pretty sure we have the means to strike them with nuclear bombs, what ever the delivery mechanism. I am just saying that the reverse is also true. It is for this reason that we did not nuke the Soviet Union. Why do you think that we have the option to do it against the Chinese?

  19. I agree with his assessment of where China is going. There are a couple of issues I have with his recommendations.

    1. The biggest problem we have is that our manufacturing is not competitive compared to East Asian countries. If you look at the invention of the transistors, for example, it was invented here, but the manufacturing is done in Korea and Taiwan. That is where the cutting edge of the technology is. Invention at the cutting edge will happen there. Future invention will not escape the same fate. The initial invention will be commercialized first in the U.S., but future production will shift over there. Since the rest of the world who did not invent the thing will buy from the cheapest and best manufacturer, manufacturing will continue to go there. All the innovation in the world ain’t going to fix this problem. Tariff is not working that well now against China. As they get bigger, it will work less well. Even at their current size, good luck trying to organize a world wide boycott against them. For many countries, China is the biggest trading partner and will have devastating consequence if they are cut out of China.
    2. China is spending as much as we are on research and development. Money will buy better innovators to do their research. There are already a lot of Western research people working for them. This trend will only accelerate. Just as America was able to poach the best talent from all over the world, now we will have to share that pool with the Chinese.

  21. There is just no military option with regards to China. They have, officially, a couple of hundred nukes and the means to deliver them that cannot be easily intercepted (hypersonic missiles moving on the edge of atmosphere and maneuvering all the way). Unofficially, people have done some tallying based on their missile counts and the fact that the missiles have multiple warheads, they have come up with a number like thousands of nukes. We may still have 2x or 4x the nukes, but are we ready to lose our top 500 or 1000 cities to nuke them? Talking about invasion with tanks is just talking nonsense. Unlike in Iraq, we don’t have a friendly country that will allow us to build up enough troops to invade China. They will also not be so stupid as to wait until the build up is complete to attack. A sea invasion like in Normandy is also out of the question as the boats are going to be all sunk long before they got to China.

    All we can do is some freedom of navigation exercises which means very little.

  22. What is in China that anyone would fight to get … with tanks? Get out Google Maps and see how far away anything is from China via land.

    The belt and road is mostly sea lanes … the “road” part carries just a minuscule fraction of the sea routes via rail roads.

  25. China leads the world all fields of civil engineering, all fields of sustainable and renewable energy, manufacturing, blockchain, supercomputing, speech recognition, graphenics, thorium power, pebble bed reactors, genomics, thermal power generation, quantum communication networks, ASW missiles, drones, in-orbit satellite refueling, Genomic Precision Medicine, passive array radar, metamaterials, hyperspectral imaging, terahertz radar, nanotechnology, UHV electricity transmission, HSR, speech recognition, radiotelescopy, hypersonic weapons, satellite quantum communications, Railguns, quantum secure direct communications, quantum controls,.. “Approximately 72% of the academic patent families published in QIT since 2012 have been from Chinese universities. US universities are a distant second with 12%.”

  27. I chose Shenzen simply because the writer chose HK. In my 60 years experience with both, I’d say the US has moved towards totalitarianism as fast as China has moved away from it.

  28. One more to add to the list. Since China doesn’t respect anyone else’s IP, we should write it into law that we do not respect theirs either. We will not prosecute, and in fact will help, any hacker/scammer groups that steal their technologies, and that we will allow them to be produced and sold in our markets. That by itself will siphon off a lot of China’s potential technological growth, the same as they already do to us. Our trade practices towards them should mirror theirs towards us.

  33. Clearly they do, exactly where and how does China innovate in any sense greater than the US? Be specific here, with practical examples with actual widespread market adoption.

  34. It was intellectuals who brought us the War on Terror and the financial crisis. The real cult is the cult of expertise, driven by experts who face no consequences for failure.

  35. I’ve worked with a couple companies in Shenzen. That is kind of like pointing to Silicon Valley as representative of how everyone in the US lives. I also traveled on high speed rail through southeastern China and they have lots of poor areas as well just begging for capitalism coupled with strong individual rights to lift them up.

    I’d be the last to deny our government is out of control and on an unsustainable path, but it is pretty easy to see how we are following China’s footsteps towards totalitarianism. All governments of the world seem to be converging on a similar path.

  36. I went to Hong Kong which compared to the cities in China shows what happens when you have more freedom. The juxtaposition of wealth was amazing.”

    When did you visit? If you went back today and visited say, Shenzen, then drove across the new bridge to Hong Kong you would have the opposite experience.

    BTW, how did your experience with Immigration there compare to this ?

  37. I have been to China. Upon arrival I was detained for hours at the airport because the facial recognition system mismatched me to someone who had been banned and they accused me of travelling on a fabricated passport. I had to assert that it was my passport and that I had never been to China before at least a half dozen times. When I failed to admit criminal activity during the interrogation they had a small team take a bunch of pictures of me and send them off who knows where. After some time I was released with a small apology. It was an exciting start to the trip.

    I liked China though, not everything was bad. Although, after seeing some of the worst pollution in my life I went to Hong Kong which compared to the cities in China shows what happens when you have more freedom. The juxtaposition of wealth was amazing.

  38. I live an hour from the Chinese border, hold Australian and US citizenships and visit all three countries regularly for reality checks. Let me assure you that I’ve never had to flee from a Chinese city to escape typhus, as I did from LA recently.

    It is the US that, by depriving us of information about China for 70 years, has left us complacent and, now, years behind them. Go to China. See for yourself.

    I have given you facts and you have given me unsupported allegations and ad hominem insults.

  39. Just a well known fact … if you don’t want your country to be invaded by tanks and artillery in less than a week… then don’t build roads through natural barriers like mountains and forests… etc… Napoleon had difficulties invading Russia because it had no roads… in contrast hitler invaded France in a matter of days because it’s well connected by roads…

  42. I suppose there is a real chance if you are living in China the information available to you has been restricted to the point where you actually believe China hasn’t been engaged in similar and worse activities for much longer.

    If you are a thinker and curious enough you should easily be able to circumvent the totalitarian internet controls to research opposing claims of fact. Be careful though, I wouldn’t want your social score to fall low enough to where you might be blocked from the internet in your wonderfully free country.

    Due to the nature of China, your blind cheerleading, and an obvious interest in the military focused articles I’d guess there is some non trivial chance you have been assigned to this blog.

  43. Are you religious? Religious people frequently confuse allegations with evidence, and even proof.

    China hasn’t stolen and doesn’t steal. It does, however, pay through the nose for IP licenses ($20 billion for HSR licenses alone) and shells out $30 billion annually for ongoing licenses.

  44. China is a totalitarian state? China? It’s not even close.

    Real totalitarian states don’t pussyfoot around like pantywaist China. In a real totalitarian state there would be 
    – warrantless surveillance of private phone and email conversations by the NSA; 
    – SWAT team kicking down doors, raiding homes and shooting inhabitants; 
    – thousands of shootings of unarmed citizens by police; 
    – harsh punishment of schoolchildren in the name of zero tolerance; 
    – endless wars
    – millions imprisoned without trial 
    – out-of-control spending; 
    – militarized police; 
    – roadside strip searches; 
    – roving TSA sweeps; 
    – privatized prisons with a profit incentive for jailing citizens; 
    – fusion centers that collect and disseminate data on citizens’ private transactions; – militarized agencies with stockpiles of ammunition

    No Chinese leader, including Mao, has ever had the power to order any of these things. The US President has all of them and exercises them regularly.

    A truly totalitarian leader would have the sole power to:
    – declare war unilaterally and frequently; 
    – issue 300,000 national security letters, administrative subpoenas with gag orders that enjoin recipients from ever divulging they’ve been served; 
    – control information at all times than any monarch in history under the Nati

  45. Except that China is a totalitarian state and has a controlling interest in companies that bring in a very significant percentage of the countries profits. That it is impossible for a US citizen to sue a Chinese company for IP theft in China shows the government supports it.

    To say outright that the trash government of China does not steal at all is so incredibly obviously disingenuous I find it insulting. The trash government of the US does the same thing, they steal everything they can too. I’m not afraid of admitting my government needs to be replaced as well.

    https://en.wikipedia.org/wiki/Chinese_espionage_in_the_United_States

  46. Yep. The economist William Lazonick has made a career studying what companies do with their cash and he says over 90% of corporate profits got to stock buybacks and dividends, leaving less than 10% for R&D, increases in labor,or other forms of expansion. Sometimes companies, driven by their CEOs, even go into excessive debt just to keep stock-grant executives happy. And this in a time of record profits and low interest rates!
    The rentier class has firmly taken over and does not produce anything but paper wealth. It actually discourages innovation because that would interfere with their ability to collect rent on resources and IP already in place.
    IP theft is a smokescreen to cover up the sclerotic American industrial base which hasn’t innovated much since the 1990s. Most of the major innovators came from other countries – Steve Jobs, Elon Musk etc. – or are funded by a dwindling set of programs sponsored in universities by the Federal government.
    I can’t see this changing and it is already too late to constrain China with Tariffs. Further, as Goatguy pointed out, most of the Chinese debt is owed to itself, and China controls its Central Bank, unlike the U.S., so they can create more money whenever they want to, and force it into the economy. Their waste is no worse than ours, and probably less.

  47. Both you example fail to address my point, for two reasons:

    1. They are allegations, and allegations are not even evidence. They’re–how shall I put this?–allegations, even when they’re directed at China, gasp!
    2. They’re allegations about standard industrial IP theft, none come close to significant and none involve China, any more than thefts of a German company’s IP by a Connecticut corporation involve the US.

  48. “… doesn’t steal anything and doesn’t need to. ” This is a falsifiable statement, if I find you one counterexample you don’t get to say it ever again without knowingly pushing a false statement:

    https://www.cnbc.com/2019/02/28/1-in-5-companies-say-china-stole-their-ip-within-the-last-year-cnbc.html

    https://asia.nikkei.com/Business/Companies/GE-engineer-tied-to-China-charged-with-theft-of-company-secrets

    https://www.forbes.com/sites/zakdoffman/2019/04/11/chinese-spies-accused-of-major-european-ip-theft-just-as-china-and-europe-agree-stronger-ties/#73f736fe70f4

  49. Your comment makes no sense whatever.

    China, the world leader in science and technology, doesn’t steal anything and doesn’t need to.

    They simply outspent us 3:1 on R&D and worked 3x harder.

    .

  50. Just because China steals everything it can doesn’t automatically mean it has a creativity problem. It just means they take the path of least resistance. As they slowly surpass the capabilities of the US there will be less and less to steal and innovation will become the path of least resistance. There still could be debilitating cultural attitudes at play though and it is possible they’ll need a slightly higher number of geniuses for the same innovation level as US counterpart organizations.

  51. That was allowed and even been playing a complementing role because we had enough supply of people who knew how to affect a buildup of the most perfect market oriented economic system generation after generation. Not guaranteed that it will always be, but that is what has been in the last 150 years.

  52. Now they’ve got the works of Shakespeare. We don’t.

    Dave’s point to which I responded was ‘China suffers from a creativity problem.’ Clearly, it does not.

  53. It’s starting to look like it was a bad idea spending decades elevating the irrational and the inept to navigate the pathway into the future. Too many people lack the skills necessary to recognize wishful/magical thinking isn’t the best approach when it comes to navigating reality. There is no noble virtue in being a know nothing and don’t want/need to know nothing dummy.
    There is a cult of ignorance in the United States, and there always has been. The strain of anti-intellectualism has been a constant thread winding its way throughout political and cultural life, nurtured by the false notion that democracy means that ‘my ignorance is just as good as

    your knowledge.’

  54. Dave, Dave! Get a grip! It’s over!

    According to the Japan Science and Technology Agency, China now ranks as the most influential country in four of eight core scientific fields.

    The Allen Institute for Artificial Intelligence (Ai2) examined not just the number of AI research papers coming from China but the quality of those papers—as judged by the number of citations they receive in other work. The study suggests that China will overtake the US in the most-cited 50% of research papers this year, the top 10% of research papers in 2020, and the top 1% by 2025.

    China has overtaken the US to become the world’s largest producer of scientific research papers, making up almost a fifth of the total global output, according to a major new report. https://www.stm-assoc.org/document-library/

    The World Intellectual Property Organization, WIPO, ranked 167 universities and public research universities for the top 500 patent applications. 110 of the patents were from China, 20 from the United States and 19 from South Korea. China dominates a global ranking of the most-cited research papers published in the 30 hottest technology fields.

  55. Marcel, the R&D spending horse left the stable ten years ago. See above.

    And the ruling oligarchy in America is doing what’s in its own best interest which is maintain the rule of the capitalist party and America and to make America’s ruling oligarchy the most powerful and politically influential force in the world. And losing.

  56. China has been outspending us on R&D since 2010 and currently spends 3x our budget. We can never catch up.

  59. This won’t be a problem.

    China suffers from a creativity problem. Their strength (monolithic command & control society) is also their weakness (inertial and inability to innovate). This is because they enforce conformity, AKA “Tall Poppy Syndrome”. Individuality is discouraged, and creativity goes hand in hand with rebellious personality.

    Once China’s spies are extricated from US industry, they’ll be forced to resort to reverse-engineering and into a continuous game of catch-up. Combine that with the current administration’s America first trade policy, and I predict a dramatic reversal of the past few decades.

  60. The ruling oligarchy in China is doing what’s in its own best interest which is maintain the rule of the communist party and China and to make China’s ruling oligarchy the most powerful and politically influential force in the world.

    And China’s ruling oligarchy is smart enough to know that capitalism combined with continued government investment in science and technology is the only way their going to achieve their goal of becoming the richest, most powerful, and most influential political force in the world.

    America’s mistake is continuing to allow free trade and full economic access to our economy with nations– that are not even coming close to being free. America should encourage free trade and low tariffs amongst nations that are fully free and democratic (Europe, Japan, South Korea, Canada, Australia, New Zealand, etc.) in order to encourage other nations to move towards freedom. But high tariffs (15% to 100%) should be placed on all imports from all nations that are not free (China, Saudi Arabia, Russia, Iran, etc.).

    And the US needs to double down on its investment in science and technology. NASA, for instance, has been underfunded for decades. NASA should have an annual budget that’s at least $30 billion a year (still less than 1% of the Federal budget).

    Marcel

  61. Yes With comments: If China wants to build a belt, the US and other powerful countries should not try to build an alternative one, this is a retarded 19th mindset but instead add lateral connections to it to make it interconnected and meaningless in terms of being China Centric. China should not be understood as an unstoppable rising power, it is in a quick technological catch up stage but it is mostly public not private driven which means that it is slower to trickle to the economy. The growth numbers of China are falsified and exaggerated. China is here to stay but has an array of endemic issues that will play in an unforeseeable ways in the decades to come.

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