The great competition between China and the U.S.
John Gong
A sign at Huawei's campus in Shenzhen in southern China's Guangdong Province, December 5, 2019. /AP

A sign at Huawei's campus in Shenzhen in southern China's Guangdong Province, December 5, 2019. /AP

Editor's note: Dr. John Gong is a professor at the University of International Business and Economics and a research fellow at the Academy of China Open Economy Studies at UIBE. The article reflects the author’s views, and not necessarily those of CGTN.

China's 2020 Central Economic Work Conference concluded on Friday. The annual conference is where China lays out its strategic goals for the next year, which mostly relates to its economic development. But issues that tend to have major economic impacts will also be covered. This year's conference put out a plan that focused on eight tasks for the coming year, the first two of which were strengthening China's strategic technological innovation and increasing its control of its supply chains.

It is striking to see technology and innovation become the top priorities of the country's economic goals, and certainly there is a reason for it. China's current emphasis on technological innovation cannot be fully understood without considering the larger context of what I call the great competition game between the United States and China.

Regrettably, this is a "game" first started by the U.S. It is the Trump administration that turned the bilateral relationship into an intense competition. Several Trump officials invoked the Sputnik moment to characterize this relationship, followed by a slew of unfriendly policy measures to confront and contain China, not the least of which is the trade war.

The original Sputnik moment refers to the Soviet Union's launch of the earth-orbiting satellite Sputnik 1 on October 4, 1957. This was the first human-built object launched into space. The event kicked off a space race between the USSR and the U.S.

Over the last four years, many great technology companies in China, including Huawei and ZTE, have been placed on the U.S. Commerce Department's entity list, which essentially means a technology boycott on China from both the demand and supply sides. It is against this backdrop that Beijing was forced to respond to address the existential challenges faced by many Chinese companies.

Ironically the decoupling policy is not going to choke or slow down China's technology development momentum; on the contrary, it is going to accelerate it. It forces Chinese companies to speed up indigenous development, and further stimulates the central government to increase funding for research.

This type of technology decoupling happened to China during the 1960s, when the then Soviet Union withdrew all help and experts from China as the relationship deteriorated between the two sides. This however didn't prevent China from making great strides in the area of technology later on.

This year's Central Economic Work Conference also mentioned a whole-of-nation approach to innovation. China does have a successful track record of using this approach, for example in developing its own very first nuclear weapons in the 1960s. And this is also not unique to China in that some of America's legendary technological feats in history, including the Manhattan project and the Apollo project, can all be attributed to a whole-of-nation strategy. That means more coordination and planning for mobilizing talents and resources. The concept of national laboratories for example, which is funded by the federal government in the U.S., is likely to be popular in China.

In short, the great competition game between China and the United States is most likely to keep unfolding in front of us for many years to come.

What I advocate is healthy competition as healthy competition actually brings welfare gains to both countries. While China and the U.S. will inevitably compete, both governments should be mindful of areas where they can and ought to cooperate, such as in terms of pandemic control, climate change and some regional security issues. In strategic management, there is a concept called coopetition. I believe that should be the right principle to guide the development of Sino-U.S. relations.

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