Executive Summary
The "Technology Cold War" between the U.S. and China is a negative-sum game driven by the U.S. strategy of technological containment and China's countermeasures. The U.S. aims to inflict greater loss on China while minimizing its own, restricting technology, market, and capital access. China responds with rule-centric, technology-centric, and statecraft-centric approaches to alter this balance of loss. The rivalry is expected to persist, with potential for financial sanctions and a search for mutual boundaries.
Why It Matters
This document is crucial for defense and geopolitical analysts as it dissects the strategic logic and evolving dynamics of the U.S.-China technology rivalry, offering insights into future policy trajectories and potential escalation points, including financial sanctions.
Key Takeaways
- The U.S.-China "Technology Cold War" operates on a "balance of loss" logic, where the U.S. seeks to impose disproportionate costs on China's tech development.
- China's countermeasures involve navigating U.S. rules, pursuing technological self-reliance, and employing statecraft to impose costs on the U.S.
- The rivalry is expected to intensify, with a high risk of the U.S. deploying financial sanctions as a "ultimate weapon" and China becoming more proactive in its responses.
Strategic Relevance
The paper provides a comprehensive framework for understanding the strategic underpinnings of the U.S.-China technology competition, highlighting the shift from economic cooperation to a negative-sum game. It details the specific measures employed by both sides and forecasts future trends, including the potential for financial sanctions and the search for a new equilibrium, which is critical for long-term strategic planning and risk assessment.