Book Talk: Will China Become the World’s Technology and Security Superpower?

In your new book, Innovate to Dominate: The Rise of the Chinese Techno-Security State, you give a detailed account of how China is building its techno-security state, which you describe as encompassing China’s efforts to build up and strengthen a whole range of capabilities that span the defense and commercial domains from science and technology, innovation to defense and national security. Where is China today in terms of its efforts to rise as a leader in technology, innovation, and security? And where did it come from?

So that’s a very complicated question. And usually, it’s about a 10-hour answer. But I’ll try to squeeze it into a minute or so.

China today is well along this path. When the Communist Party came to power in 1949, China was one of the most backward, poverty-stricken countries in the world, very much shut off from the industrial and technological revolutions. China was basically like a 19th-century agrarian country, but it was very, very large. Over the next few decades, China tried to catch up, but it had a very poor track record, in part because of domestic political issues. You had a very ideological Communist Party that made a lot of foolish mistakes. And China had security problems with the Soviet Union and with the U.S. So China often found itself on the outside.

By the end of the 1970s, [China was] trying to try to move away from this isolation, this sense of being threatened. There was the passing of Mao Zedong, and the arrival of Deng Xiaoping’s new leadership that focused on reform and economic development, rather than militarization. For the last 40 years, there’s been this amazing transformation. China was able to catch up economically; by the beginning of the 21st century, China was the second largest economy in the world, second to the U.S. But technologically, China was still struggling. At the beginning of the 21st century, China was a second or third rank technological power. It was nowhere near the global frontier. And so, in the last 20 years, especially under Xi Jinping, science, technology, and innovation has become a critical element.

And the model for China’s technological advancement over the last few decades has been what we would define as absorption based. You absorb what is out there in the rest of the world—you build upon the ideas and the strengths of the global technology system. And the Chinese have done very well.

Today, in 2022, the Chinese have said: we know how to do absorption, we can copy, we can reengineer. But that will never get us to the front.

And so a major shift has taken place. China wants to be an original innovator like the US and advanced countries are. And the Chinese are now trying to make that shift. And to go by [what] the Chinese authorities [say], by the middle of this century, China will begin to overtake the U.S. and become the dominant innovator in the world.

What are some of the technology areas where China is doing really well?

There are a few. For example, high-performance computers. China, by various measures, has some of the world’s fastest supercomputers. There’s a race there that is speeding up. The Chinese are [advancing] in areas like artificial intelligence, although not necessarily in terms of the technology, but in the ability to use information. China’s also doing well in other emerging areas, like quantum technologies, and in space. These are pockets of excellence. But by and large, China still remains half a generation to a generation behind where the country leaders are.

In your book, you note that both China and the U.S. share some similar goals, but that their models and their approaches to achieving those goals are quite different. What is the China model and how is it different from the model that the U.S. uses to advance its technological capabilities?

The book is focused on the techno-security domain, strategic capabilities in the national security realm as opposed to the commercial marketplace. That’s an important difference. In this techno-security realm, the Chinese model is a state-led, top-down approach where the state plays a very, very significant dominant role. The U.S. has an anti-statist model, with more balance, if not a competition, between the state and the markets. In the U.S. there have been tensions between the state and the private sector, especially in defense, and in areas in which the state knows that its role is limited: it provides a lot of funding, it provides [guidance on] what the military wants, and it leaves it to the private sector to work how best to deliver that innovation.

And the U.S. has done that very, very well. There are strengths and weaknesses on both sides, and this is what makes it really intriguing going forward because, all these models have long-term strengths and weaknesses. And it’s up for grabs [who will prevail]. The last time we had this type of statist versus the anti-statist [competition] was during the first Cold War between the Soviet Union and the U.S. The U.S. won, and they won very, very clearly. The Soviet model had fundamental weaknesses that the U.S. didn’t have. The Chinese model has been able to mitigate some of these weaknesses, and it has a lot more strengths. So that’s why going forward it’s not clear [who will come out ahead]. The U.S. has a lot of problems, but the U.S. has built up a lot of strengths, and the U.S. innovation system is still the world leader. And the Chinese for the most part are still trying to catch up.

What are the most important strengths and weaknesses of the China versus U.S. model? What are the tradeoffs?

I have a chapter about the very effective Chinese model of technology development, and it’s called the SAMI model. “S” stands for “selective.” The Chinese model of technology innovation has to pick a small number of the most important innovations and priority programs. “A” stands for “authoritarian.” The political system is authoritarian, but also the management—you can see on some of these projects, it’s the Politburo Standing Committee, and even Xi Jinping at the top.

The third characteristic, “M,” is “mobilization.” Once they’ve decided what they want to do, they can mobilize the system in a way that the anti-statist approach cannot. Once they say this is the top priority, they can bring in the top talents, the top institutions from across the country to focus on that. And then the “I” stands for the nature of innovation itself. Is it original? Or is it an absorptive approach to innovation?

This is the SAMI model, and Xi Jinping calls this the advantage of the social system. That is the strength. It has showed itself since the 1950s, when the Chinese, in a very short period of time, were able to develop nuclear weapons and ballistic missiles and hypersonics and other types of capabilities. These are very important strengths. But there are also a lot of major weaknesses. The state’s involvement is a strength, but it can also be a weakness. It’s the state picking winners and losers. And often the state doesn’t do a very good job. China’s approach is also top-down, and there’s not very much competition. Innovation doesn’t do well when there’s not very much competition. Also, the nature of the Chinese system is that there’s not very much transparency. So there are all these normative and structural problems that the Chinese have been able to mitigate in recent years, because it’s thrown so much funding into it, they have this momentum, and they have the SAMI system. But, as we see today, the Chinese economy is slowing down. There are a lot of growth problems, in part because of COVID. And this model doesn’t do well when there’s economic weakness, or there are not enough resources flowing in.

You mentioned the role of Xi Jinping in guiding this effort. The Chinese Communist Party will hold its 20th Party Congress this fall, and Xi is expected to take on his third term and potentially a life term as the supreme leader of China. In your book, you write that the open-ended over concentration of power and authority in Xi represents the gravest risk to the future prospects of the techno-security state as well as to China more generally. Can you help us understand the extent of his power and how dependent are China’s ambition in the techno-security space on Xi Jinping?

Xi Jinping wears a number of hats. He’s the Communist Party’s general secretary, he’s the president of the Chinese state, he’s the Commander in Chief. There’s a saying that Xi Jinping is the chairman of everything. He has his hand in a lot of different pies: political, security, foreign policy, to a lesser extent the economic side, which means he’s overextended. But that’s been a hallmark of his leadership. Ever since he came to power in 2012, at the 18th Party Congress, he’s been very much a hands-on leader.

And as you mentioned, they’re coming up to the 20th Party Congress, which will take place towards the end of this year, probably in October or November. Among previous leaders, there was an unwritten rule that you’d normally serve two five-year terms, and then you should pass the baton. And that was one of the achievements of Chinese politics—the peaceful transfer of power. You see the consequences of leaders who stay for life and die in office. Mao Zedong served from 1949 until he passed away in 1976. Towards the end, there was stagnation, a lack of leadership, and a loss of direction. And we’ve seen this in many countries like in the Soviet Union and other authoritarian systems.

So China, for a while, from the late 1980s, through to the early 2010s had a system that is a major hallmark of successful political regimes—the peaceful transfer of power. Now, as Xi goes into a third term later this year, and perhaps longer, he’s going to be there presumably, as long as he wants. He’s in his late 60s so he can be there for a very long time. And this is the paradox: there’s this interim stability. He has the time to think and to impose his vision of what he wants for China—and he has a vision, he has a strategic vision. He’s made it very clear what he wants. But it makes his leadership like an echo chamber, because he’s so powerful. And he’s made it clear that he is also ruthless. The people around him are very careful. There are very few checks and balances in this political system, and there’s a concern that when you’re at the top, and you’re surrounded by yes men, and especially when you’re in such a pivotal time when all sorts of stresses and strains—COVID, strategic competition with the U.S., what’s going on in Ukraine, and the relationship with Russia—if you make a mistake then it could have major consequences, both for your country and for the world.

Speaking of Ukraine, your book was written and completed before Russia invaded Ukraine. Does that war change any of your main findings or the main messages in your book? If it does, how does it change?

Yep. My book now is completely obsolete, of course. You have to wait until my next book.

My book was about political economy, issues like economics and technology and the nature of the state and the critical role these play in a state’s power, whether it’s on the military side, whether it’s on the geostrategic side, or the geo-economic side. While there’s the military fighting on the ground [in Ukraine], there’s also the economic warfare and the economic confrontation and securitization that has taken place. And that’s a very, very important part of the story.

Also, there hasn’t been a lot of focus on this, but what is the nature of the domestic system in Russia that supports that kind of war or doesn’t support that kind of war? Russia also has a techno-security state with a military-industrial complex, which has now become even more important. It’s important to understand what both the political economy and the domestic political system are like in terms of supporting or not supporting the war.

The main issue for China is trying to keep its distance from Russia, but there’s a lot of concern about what is going to happen with Taiwan, what’s going to happen with other areas of potential conflict, and what’s going to happen in terms of the nature of the Chinese state in thinking about issues of war and peace.

In what ways are Beijing’s moves and building of its techno-security state driving changes in the defense posture of the U.S.?

It’s playing a very, very significant role. When I first started writing this book a decade ago, China was important, but it wasn’t at the very top [of the list of priorities] in Washington, DC. The U.S. was still very much engaged in the global war on terrorism focusing on Iraq and Afghanistan. But since the mid-2010s, especially in the former Trump administration, the 2017 National Security Strategy and the subsequent U.S. national defense strategy highlighted the importance of great power competition, [and said] that China was the paramount long-term threat for the U.S. And the competition was in this techno security space, its military modernization, China’s technological advancement, China’s economic strengths, etc. Fast forward to today, in the Biden administration China is [seen as] the real peer competitor. Russia is important but is not economically even close to the U.S. So China is front and center now.

Your book describes China’s amazing, stunning progress in building its techno-security state, and becoming, as you just described, the biggest perceived competitor to the U.S. In your conclusion, you write that China is on a path to becoming even more capable, more confident, and more confrontational. If China does become the global hegemon or the global techno-security superpower—and do you think it will?—will the world split apart? Whose lives will get better? Whose lives will get worse? How will it change the lives of ordinary Americans?

If I knew the answer, I wouldn’t be just a regular professor. First of all, we can’t draw a straight line analysis. There are going to be a lot of twists and turns. We’ve seen this with COVID-19 and its impact on China. China’s had a lot of momentum going forward. Their political system with Xi in charge allows China the ability to have this laser-eyed focus on its techno-security growth. And it will continue to do that.

The big question in many ways is for the U.S. The U.S. is still far more innovative than China, but if the U.S. doesn’t get its act together—and it’s struggling to work out politically how to respond—these are going to be increasingly tough issues. In the book, I also say we have to be careful not to overstress China as a techno-security monster. I estimate that economic size of techno-security state that includes state funding, financial investment, the defense industry, and industrial sectors engaged in dual-use civil-military activities like aviation, shipbuilding, and space, amounts to less than 10 percent of the national economy measured in Gross Domestic Product (GDP). This means that the overwhelming majority of the Chinese economy, more than 90 percent, is engaged in regular commercial non-security economic activities that do not represent a threat to the U.S. or the outside world.

The U.S. and China have to find ways to work out where they will compete, and also find what they have in common and find ways to cooperate.

It’s easier said than done. The political rhetoric of both the U.S. and China make the ability to find common ground much, much harder. We are veering increasingly toward competition as opposed to peaceful competition. This is not just about the U.S. and China. The rest of the world increasingly has to pick sides. So we are moving increasingly into an era of deglobalization or partial de-coupling of the technological system.

What does that mean for people in the U.S. and elsewhere? We won’t have the ability like we did in the 1990s or 2000s to get the best products from around the world. Prices are going to be more expensive, as we’ve already seen. If Chinese companies have the best phones or technology, we won’t be able to access that. There’s going to be much more of a narrowing of what we can pick and choose than what we’ve been used to, and it’s going to be more expensive. Defense budgets are going to go up as there’s more focus on security. What we’ve seen since February of this year because of the war with Ukraine, that is the new normal going into the next decade or two.

Sobering words to close us out. Thanks for being with us today on Talking Policy.

Thank you, Lindsay, for having me.

Thumbnail credit: UCSD Jacobs School of Engineering