Fang Xingdong: In the science and technology war between the United States and China, it will eventually steal chickens and not become erosion of rice

Source: Global Times

Recently, the world's third largest silicon fab TaiwanUniversal Wafer Corp. announced that it will build the nation's largest 12-inch fab in Texas, which is considered to be another achievement of the United States to promote the diversification of the semiconductor supply chain. Under the complex global situation such as the new crown pneumonia epidemic and the Russian-Ukrainian conflict, the US science and technology war with China is still an escalating situation.

Since sanctioning ZTE in 2016, the US government's political crackdown on China's high-tech industry has continued to this day. Although it is still far from the moment of final understanding, various complex and subtle signals have emerged, and through in-depth analysis, we can see the basic logic and trend of this US science and technology war against China.

There is no doubt that the US government,with its hegemonic power, politicized and weaponized science and technology, which is not all in vain. The impact and damage to the global supply chain is beyond doubt, and the short-term losses caused to Chinese technology companies should not be underestimated, such as the loss of at least $100 billion per year in Huawei's smartphone business due to the loss of mobile phone chips, which has greatly benefited companies such as Apple and Qualcomm. In addition, the U.S. government's greatest hope is to restructure the global semiconductor supply chain, and today the U.S. produces only 12 percent of the global supply share, down 40 percent from the 1990s. The U.S. government is trying to reverse the decay of its semiconductor industry through political intervention and ensure U.S. advantage and security at the supply chain level.

The core strategic goal of the United States to launch a science and technology war is to block the development and upgrading of China's science and technology, and the second is to consolidate the advantages of the US supply chain and maintain the competitiveness of science and technology. Killing two birds with one stone is its wishful thinking. The driving force behind it includes not only a large number of American politicians and elites, but also many entrepreneurs such as former Google Chairman Eric Schmidt, who cannot win through normal fair competition and want to use the hegemonic power of the United States.

For the first time, U.S. sanctions have completely broken the good wishes that we have believed for decades that we can continue to develop based on the interdependent relationship between China and the United States, shattered the inherent perception that we can rely on the core technology of the United States for a long time, and instead became the strongest driving force for condensing the consensus of China and strengthening the national strategic scientific and technological strength. According to Bloomberg data, the average sales growth rate of China's chip industry in 2021 is the highest in the world. Of the world's 20 fastest-growing chip companies, 19 are from China, up 137 percent from eight in 2020. In 2021, global semiconductor manufacturing equipment expenditure increased by 44%, and the Chinese mainland soared by 58%, becoming the world's largest market for semiconductor equipment for the second time.

The lethality of the US science and technology war, "not enough to achieve and more than enough to lose," has begun to appear. And the cost of this lethality will be released and manifested more in the future. Whether it is the Trump administration or the Biden administration, the containment against China's semiconductor industry and the entire technology industry so far is essentially a hand of the government that brutally intervenes in the market of the global high-tech industry chain. If this makes the HIGH-tech industry in the United States more powerful, then the basic laws of the market economy must be rewritten, and the basic paradigm of scientific and technological innovation must be reversed. In fact, the best path for the United States to enhance its supply chain advantages is the path fully proven by the history of the past 30 years: to further strengthen the inherent advantages of the United States in globally unique basic research, applied research and industrialization, and to form better industrial cooperation with China to better serve the global market.

The development process and new pattern of the digital age have become more and more clear: with the global netizens exceeding 5 billion, the focus of global high-tech development has begun to shift from the past to the digitization of the global middle-income group as the core, to "everyone on the Internet", and the whole people have entered the digital age. The global proportion of North American Internet users is less than 7%, the total number of European and American Internet users is only about 20% of the world, and Asian Internet users already account for more than half of the world. In the future, 90% of the remaining unconnected population in the world will be in Asia, Africa and Latin America. Under this pattern, the United States abandons cooperation with China and continues to follow the old mode of thinking, hoping that it will monopolize the dominance of high technology by itself or by instigating allies, which is obviously against the trend of the times.

In order to make the US government stop the science and technology war, first, it is proved that the science and technology war does not harm the development of China's science and technology, but stimulates and promotes China's science and technology to overcome difficulties; The second is to make it more and more clear to the United States itself that the losses of launching a scientific and technological war outweigh the gains, the disadvantages outweigh the benefits, and the imbalance of interests caused by the scientific and technological war has caused the United States to suffer from the marrow.

In the coming period, the chaos in the global industrial chain caused by the science and technology war will intensify. In all kinds of chaotic and contradictory information, we must always maintain strategic determination, on the one hand, we must not be blindly optimistic, this scientific and technological war is a huge warning to us, exposing the shortcomings and strategic blind spots of the past development mode, and it is impossible to make up for the dead in one fell swoop, and we need to complete the fundamental rebirth of the system and strategy from the basic education, higher education, basic research and other levels. Second, the US government's science and technology war against China cannot be stopped in the short term. They'll figure out more tricks. For example, with the help of the "Indo-Pacific Economic Framework" and the "Semiconductor Quadripartite Alliance", the action of squeezing China out of the global supply chain has been continuously upgraded, and many countries with delicate roles such as the European Union, India, South Korea and Vietnam, which are looking forward to robbing and "replacing" China's profits, have been fueled to varying degrees. This attempt by the United States to promote the restructuring of the global semiconductor supply chain is destined to be a large geopolitical chessboard intertwined with technological innovation, economic interests and political interests.

Therefore, we must face up to the short-term costs and pains of this science and technology war. As long as we firmly adhere to the strategy, adhere to the basic laws of high technology, grasp the trend and process of globalization, and always focus on a central task: constantly strengthen our own industrial competitiveness and technological innovation capabilities, take advantage of the situation, turn this extreme suppression into the limit test of our high-tech industry, and turn the crisis into a driving force for development. Then in the future, the US science and technology war against China will eventually emerge a new equilibrium point that is unsustainable.

At present, in addition to further increasing investment in semiconductor equipment and manufacturing and strengthening the basic capabilities of the industry, we must break the "enhancement loop" of US sanctions, so that "Chinese enterprises fall, American enterprises eat enough" panacea, into the poison of "Chinese enterprises have not fallen, US enterprises have bad cake". In this way, under the double-sided attack of short-term and long-term negative effects, the historical inflection point time of the United States is shortened as much as possible. In the end, the global high-tech industry will truly get rid of the vicious intervention of politicization and weaponization, return to the essence of letting the market promote competition and development, return to the track of driving human development and progress with innovation, and return to the original intention of benefiting all mankind with science and technology. (The author is Qiushi Distinguished Professor of Zhejiang University and Director of the Digital Civilization Research Center of Tsinghua Yangtze River Delta Research Institute)