“Is the United States now trying to lose the technology race with China? It certainly seems to be.”
That's the opening statement in a recent analysis. of the U.S.-China high-tech rivalry from one of the world’s leading think tanks — the Australian Strategic Policy Institute (ASPI).
The analysis, released in February and grounded in data from August 2024, ASPI report, cautions that as the United States cuts funds for science and technology, China is surging ahead with research into critical technologies that will determine 21st-century security and economic dominance. According to ASPI’s Critical Technology Tracker In 57 out of 64 key sectors, Beijing surpasses the U.S. in what it refers to as "high-impact research."
Here’s one high-profile example: Chinese electric-vehicle maker Recently, BYD created a new system to refuel its vehicles in merely five minutes . That’s about the time it takes to fill up a typical automobile gas tank — and it’s several times faster than any Tesla charger.
However, that's only concerning electric vehicle batteries. Earlier this year, China shocked the artificial intelligence community with its advancements. release of DeepSeek, Which quickly emerged as a formidable competitor to OpenAI’s ChatGPT and other large-language model (LLM) platforms. Remember that shortly after DeepSeek launched, shares of semiconductor leader Nvidia dropped by 17%, indicating the significant disruption anticipated from DeepSeek entering the marketplace.
Read: Microsoft is discreetly incorporating DeepSeek’s technology. This could have significant implications for AI stocks.
NVIDIA's difficulties this year reflect those faced by what are known as the Magnificent Seven stocks, including Apple, Alphabet, Amazon.com, Meta Platforms, Microsoft, and Tesla. According to data from Dow Jones Market Data, even with the recent upturn in the U.S. stock market, these major technology companies are experiencing their poorest performance at the beginning of a year since 2022.
One factor behind this retreat of Big Tech stocks is their previously high valuations. However, another contributing element has been President Donald Trump’s actions. tariff spat with China and his on-again, off-again talk of “terminating” U.S. Federal Reserve Chairman Jerome Powell (a power that a U.S. president legally does not have) add further uncertainty and anxiety. Which helps explain why Trump has softened his threats against both China and Powell in recent days (and which helps explain the stock-market’s rebound).
National security, economic power, and technological superiority go hand in hand. This is something China comprehends well.
However, valuations and seesaw dynamics under a caretaker president are concerning enough. The greater issue lies with China, which continues to produce more scientists, engineers and mathematicians then the production within the U.S. is higher.
China appears to have a laser-like focus on dominating not just AI, but 6G communications (5G is already so yesterday), aerospace, semiconductors, cybersecurity, pharmaceuticals, robotics, biotech and more. National security, economic strength and technological prowess are one and the same; you can’t have any one of them without the other two. China understands this. Does the U.S.?
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China critics argue that the nation will likely follow Japan's trajectory from the 1980s when Japan seemed poised to surpass the U.S. Although anything can happen, as these doubters speculate, we should revisit this idea. ASPI’s Critical Technology Tracker , where it was recently indicated that China surpassed the U.S. in 57 out of 64 "high-impact research" fields.
The transformation over the last twenty years has been striking. According to the report, "From 2003 to 2007, the U.S. dominated in 60 out of 64 technological fields, but in the most recent period (2019-2023), it leads in only seven." It further states that China had control over merely three out of 64 technologies between 2003 and 2007, whereas during 2019-2023, it took the top spot in 57 out of these 64 areas. This represents an increase from last year’s ranking (2018-2022), when China held leadership in 52 sectors.
Furthermore, China remains the sole country to have successfully landed a spacecraft on the enigmatic far side of the Moon, with intentions to send astronauts there as well. Its aspirations extend much further; China aims to be the first country to put humans on Mars. Meanwhile, the United States shares this objective, setting the stage for an intense competition. Will America manage to keep up—and what might that indicate regarding which nation will lead globally in technology and consequently economics?
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China also has beaten America to the punch with highly accurate hypersonic missiles that can fly at five times the speed of sound and change course along the way. American security analysts call them “carrier killers” because of the threat they pose to U.S. naval forces. The Pentagon, various reports say, is racing to catch up.
Electric vehicles. AI. Moon landings. Hypersonics. There’s much more, but ask yourself whether breakthroughs like these sound like China is going the way of 1980s Japan.
Ask yourself if American dominance, which perhaps to its peril the world has taken for granted, still really exists. Ask yourself if the U.S. government’s current obsession with cutting research and development, firing scientists and engineers, turning away promising foreign students, and denigrating the basic ethos which helped America beat the Soviets, is prudent. And while you’re at it, think about this: What future DeepSeek-like shocks could rattle Americans’ faith that their country will always be No. 1?
Also read: How America can modernize its power grid without breaking the bank
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