[P2P-F] Fwd: Weekend Roundup: How tech may trip the Thucydides Trap

Sun May 20 12:05:12 CEST 2018

---------- Forwarded message ----------
From: The WorldPost <news at theworldpost.com>
Date: Sat, May 19, 2018 at 1:01 PM
Subject: Weekend Roundup: How tech may trip the Thucydides Trap
To: michel at p2pfoundation.net

The race for technological dominance is driving the U.S.-China clash.
Weekend Roundup: How tech may trip the Thucydides Trap
The race for technological dominance is driving the U.S.-China clash.

Nathan Gardels, Editor in Chief
Visit the WorldPost at http://www.theworldpost.com
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyh7YQ9e8F4q6DuLdVPRrL_fvv6qhAsNgMVz22vZvP0DRwQwC4bU2bEF4-awKtTr1C9If53eXrEAvWEW5PkUHEqndyCw43SQLzA==&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>

Beijing’s Made in China 2025 program seeks to make the country a major
player in advanced technology manufacturing. (Shutterstock/WorldPost
illustration)
As part of the Berggruen Institute’s 21st Century Council, I have met
Chinese President Xi Jinping and other top leaders twice over the last four
years. Above all else, what is manifestly clear from those interactions is
that, in China today, you can’t talk about the future without talking about
the past.

As Zheng Yongnian
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyncA2eZ1d0DQTu6sa2D7yzQT-AkesIdFRXXelkga1UuzRAZghurYWeaPE0tWyrZNR_D3DHWwqwkKZmy9tgZvYLnE4uR-VjDIxB08XM0wrtOWpxh6ErKkDoepfcX2SqpPZcZvUp2KTpGrtlK69ZmdpuzDIdnKzJDJVpfSOWvSxHLY1K4q54nOo1YMSlYihEH53Bm52WnD-S47BXspVeOdo6LcstSj7Ab_Gg==&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>
points
out in The WorldPost this week, Xi’s “Made in China 2025” initiative to
conquer the latest technologies, from robotics and artificial intelligence
to electric cars and semiconductors, is rooted in the bitter experience of
national humiliation that resulted from the failure to catch up
technologically with the colonial powers that came to dominate the Middle
Kingdom.

“There is a consensus among China’s current leadership that the closed-door
policy upheld by the Ming and Qing dynasties left China far behind the
industrialized West in the late 19th century,” Zheng writes from Singapore.
“Seen in this context, the intentions behind ‘Made in China 2025’ are not
as chauvinistic or predatory as they seem to be when discussed by the Trump
administration and in Western media. Rather, they are merely the latest
steps in the structural transition of China’s economy that Deng Xiaoping
initiated decades ago.”

Leaders in Beijing see Made in China 2025, or CM2025, as rocket fuel for
the “rejuvenation of the Chinese nation.” For the present U.S.
administration and many in Congress, however, it represents an existential
challenge to American technological dominance, with all that implies for
military might and geopolitical sway.

The top White House trade hawk on China, Peter Navarro
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyncA2eZ1d0DQUzF3vgIc8UOLZHz-RFbdhymC87j_-tyOPm_LTM8b1AnnuKYsx1BLGbGnZGB-uyIUBSctBuKCRLZ12lQq6rUSEzSIRTJ2C7EHqD5CiBSIKB0_nGYekFF-vfXzK6fhN9ZpTRcLCQN_vc4OrGtUYp1DDoMkWHEFo_eEZtaTso0f-MecwfVuquL8nvkLGsAtIrKT-gElHhfK6Swe2FAwn7DxIg==&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
sees Made in China 2025 as a brazen assault on American preeminence. For
Navarro, the Chinese are saying to the West, “We’re going to dominate every
single emerging industry of the future, and therefore your economies aren’t
going to have a future.”

For China, the Trump administration’s proposed measures to thwart its
high-tech quest crosses a red line. As one ranking party official told me
recently, “China may entirely erase its trade deficit with the United
States and empty its foreign reserves, but it will never give an inch on
Made in China 2025. It’s the guarantor of the sovereignty and prosperity of
our nation.”

Chinese Vice Premier Liu He, who was in Washington this week for trade
talks, has similarly made clear that China’s high-tech initiative is not
negotiable. “Why is CM2025 non-negotiable?” Gordon Chang
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyncA2eZ1d0DQUDp_I2LlY0e0wbT4kOtkKjxKFZzPll3NJIlC825jZAqQORJqylCpFbu3pj0KFmknWD9lNLVcluJjXy4tFb-xkk4oIZ4-WSOhZRr5Wj-ehJOTFNm53_MyhuLe0eHomDBN5s9mFdbtXrSNk5kCENy838P51x9FN-4z4igUU7fhKw0-wpFAGhw1vHzVzTCahOQJNjr14KVcqsU=&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>
asks
critically. “Because it is at the heart of [Xi’s] industrial policy. And
his industrial policy is at the heart of his plan to make China the world’s
technological leader and to establish China as the world’s dominant
economy. The willful Chinese ruler is letting nothing, including trade
obligations, get in his way.”

For Chang, “the breathtaking initiative looks like history’s biggest
assault on the World Trade Organization. To achieve its ambitions, Beijing
has rolled out large, low-interest loans from state investment funds and
development banks, aid for the purchase of foreign tech companies, and
research subsidies galore, some of which appear to be clear violations
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of
WTO policies.”

Chang is right that WTO rules seek to level the playing field of
comparative advantage in trade by restricting state aid to targeted
industrial sectors. But to attempt to resolve this issue by imposing
punitive measures against China is a double-edged sword that could be
self-defeating for the West.

China remains behind the United States in the chipsets that power computer
technology. It is still reliant on American companies, like Intel and
NVIDIA, to supply almost all the chipsets for most of its supercomputers.
But anticipating the clash that has now arrived, in recent years, China has
built the world’s fastest supercomputer, Sunway TaihuLight
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyncA2eZ1d0DQCKFRJDs1BVRJuKZ6ajE-tqDGruP6a_RLEDvrqoD5oKh0-VPdXjg7ulWg8YOWScoRGOFKo1LV6T3LG_DIFPKocvSyqnyl1zX8SLD8PBEAaLSO7jrhoRWY7ak8kwETkSi1fTpw3h5WcbMSQnnCtwY5QkHcjPsQgRL2yPPm0YvMPm_z5_-IJrAcpQ==&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
with all domestic components.

Because of exclusions on key Western technologies, China developed its own
manned spaceflight program. Following the embargo on military technology
imposed in the wake of the Tiananmen crackdown in 1989, China has developed
entirely indigenous weaponry systems.

As Zheng observes, export restrictions would likely only accelerate and
strengthen China’s self-reliance in the core future technologies. “U.S.
trade hawks fail to grasp the record of contemporary history, which
demonstrates that technology bans imposed by the West are more often than
not counterproductive when directed at a capable country.”

Wendy Cutler
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyncA2eZ1d0DQ4NLQkngKcoAT34bSgwODGrCZcgB8-aMDTRB_gbdwa6HEk5jRVCWIIZrQZM_i72Gj_YzYlr9RCOQAcxC2eY6RohhJi4nQ6CyIF60UPUjs37g3spzWmJEM9SzMmCM4YP3uvOiyntZ44mS7uspoIOKib5RpQCAP8Sdp3BLne3H1n-dvnIyQdHPyud2-zRCiNQAGVc8bphviTnQ=&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
who negotiated the Trans-Pacific Partnership for the Obama administration,
argues for a mutual resolution of the conflict instead of a set of
unrealistic ultimatums to China.

“Insisting that China dismantle its Made in China 2025 plan is not a
productive use of time. China is not going to abandon the plan — [Xi] has
made it a top priority. Furthermore, industrial policy in and of itself is
not necessarily objectionable. Many governments, from Japan to Germany,
have identified sectors as strategic and have offered varied types of
assistance to foster the development of such industries.”

“What is different about Beijing’s latest plan,” she continues, “is its
magnitude and its potentially distortive nature. China’s massive support of
its solar industry, for example, has already resulted in serious
overcapacity, driving competitors out of business and distorting
international markets.

A negotiated solution with China should focus on preventing such market
distortions and unfair harm to American technology companies and their
workers. Full disclosure of the scope and level of subsidies and other
types of assistance China provides to these industries should be the
starting point. With increased transparency, both sides could have an
informed discussion of how the program might affect U.S. interests and
global markets.”

Nicolas Berggruen
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyncA2eZ1d0DQIr4NzFRERekC7vF-PW5QLx7Knn7dYmmtqj4Fsmaqxj6CAHhG9X5-ONKx21h3WCICoXUzAum5aPxe9oN5nPCrNULt4_lbr9yrA7mvCfT7vzt2RfY6slzGRQo4wYoubO3EFzKUhf37nHgqrVkJMvD0X0DrrkL9DUobUQX1VMKLMVY=&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>
ponders
the competitive disadvantages that America’s political culture imposes on
itself. “China’s present prosperity, like that of other Asian outposts like
Singapore, is built upon the millennia-old belief that government is a
‘necessary good’ for society that provides essential services and
complements private economic activity,” Berggruen writes. “The state
invests heavily in infrastructure and education.

Since the ‘reform and opening up’ period after the Cultural Revolution,
China has also unchained a vibrant private sector, resulting in commercial
giants like Alibaba and Tencent. Working together, the state and the
private sector have raised hundreds of millions of people out of poverty
and created what Chinese leaders call a ‘moderately prosperous society.’”

He concludes: “President Trump is not wrong to challenge China on impeded
access to its markets. But no matter how many trade barriers come down,
unless the United States achieves a similar balance of public investment
and private wealth creation, we can’t compete.”

There has been much discussion in recent years of China and America falling
into the “Thucydides Trap
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lyncA2eZ1d0DQI9Lc_gh5sSGtxaQtu77wV_WlF7VkH2n_rDpBcG0-_Eloe-YMKj0oqKgHF5ObxtYgOdJKH5RxeaYBXlpbPG6yZOStE6yIBMaMuVIMt7LeC4mxj5zdFvZNXck9w8NALMquv-IFtzVqmYrAfWoAkQGqPC8DTgpjzxUSDq213Et_eVYyMvNJ_C2WHx71D0JUmwcpzsvdcgRbON8=&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>”
of established and rising powers inevitably clashing to the point of
military conflict. What is most likely to trip that trap is an unyielding
techno-nationalism that is emerging in both China and the United States.
For that reason, there is no higher priority in geopolitics today than
finding a cooperative agreement along the lines Cutler suggests that offers
a path out of this historical trap.
Nathan Gardels
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lykXrKkLt8km1HaOdANP16yt_kXdUI4tmvLaleb14bVNSqEYb9u5-X6oHAHvGm6OswbYq2oH5OsSsIrQPDyb6_jCHPqGFOb8-e2K1ajFKOHEI&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
Editor in Chief
Kathleen Miles
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lykXrKkLt8km1UltDvBo0-BPLhdjCx1GQhcQ9kIDe5IZGHVpAwDeA-frfEnDzeX7af6eZ4ynN5pRkWWEKANDCW5Fa8BAFdyNaIOjQEkOXL7WU&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
Executive Editor
Dawn Nakagawa
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lykXrKkLt8km1L-pI9KRTD8LJ8AKSAHsieSS6tLmVHFrDesfzVnHol5u5QonQsptRNctIGaGpmIWjYdhksaU9MUwYzElbLRNiFLvCh1hHwaqB&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
Vice President of Operations
Peter Mellgard
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lykXrKkLt8km1DGcO13zmsgrExtuExOy1qr0ag_DOeiwkFZAeb2Yfh4_AaRMSFoJR8ZK4-oEAZ4gV-sunUo0TdrywScdkJhdWu5ldCAkKtIZd&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
Features Editor
Alex Gardels
<http://r20.rs6.net/tn.jsp?f=001mn_174u1IfgJr8-CW0qdmC2XbkYhR2zuXTJzjBFDnQrKf8B5Q98lykXrKkLt8km1Yn0An-xR88gzeBrnKA9MV8l35lQPZFYX4wnzxlF7ORMASfpdYxSmcVoUeMbeZQpv9A9binhGojJjKL2Qv3pBhtdr2FI0FK-v&c=G-McuP_ILJ2En3w--H0IZmFLnW-e_Nsz14f4nyfHRiMeBa88KuwomQ==&ch=5irgWbFcO0Lm4CWphJuBVvU8K8u-KWSJoQdc-Uij_QNw3QiTx9nC6w==>,
Video Editor
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Associate Editor
Rosa O’Hara
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Social Editor

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EDITORIAL BOARD: Nicolas Berggruen, Nathan Gardels, Kathleen Miles, Jackson
Diehl, Juan Luis Cebrian, Walter Isaacson, Yoichi Funabashi, Arianna
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