Since Biden took office, he has changed the policy of one-size-fits-all decoupling of China and technology in the Trump era. Biden and the Democratic administration firmly believe that technology is the focus of intense great-power competition between China and the United States, because technology issues do combine issues of security, economic competition, and human rights. Since the first meeting between the general secretary and Biden in Bali, it has become a familiar thing to build a "small courtyard and high wall" against China in the high-tech field.
Detailed nouns. So what is a "small courtyard and high wall", how was it born and gradually improved, what kind of impact will it have on China's national fortunes, and how should we deal with it? In this article, I will share some of my own analysis and opinions around these points.
The United States has a strong sense of being prepared for danger in times of peace.
On January 13, 2021, the Center for a New American Security (CNAS) released a report entitled "Helming: A National Technology Strategy to Meet China's Challenge," which did not shy away from pointing out the shortcomings of the United States in science and technology funding and human resources. In today's era of multi-field strategic competition, technology is the most important competitive factor. A rising China poses a direct challenge to the United States and its allies, and the U.S. response has been slow, unorganized, fragmented, and ineffective. The United States** must develop a national technology strategy to maintain its leadership in innovation and technology.
The birth of the "small courtyard with high walls".
The "small yard, high fence" technology defense strategy against China was first proposed in 2018 by Sam Sacks, a senior fellow at the American think tank New America. The official interpretation of these four words is as follows: ** need to identify specific technology and research areas directly related to the United States *** (i.e., "small courtyards") and delineate appropriate strategic boundaries (i.e., "high walls"). The core technologies in the "small courtyard" should be blocked more strictly and vigorously, and other high-tech fields outside the "small courtyard" can be reopened to China.
Biden has made all kinds of preparations to promote "small courtyards and high walls".
Establish a full-time organizational structure.
At the end of the Trump administration, the U.S. Congress set up an expert group on China-US science and technology relations on the basis of the original "China Task Force", which gathered elites from all walks of life in the U.S. scientific and technological circles, academia and politics. In November 2020, the group published a lengthy policy report, "How to Respond to China's Challenge: A New Strategy for U.S. Technology Competition," which reflected on Trump**'s comprehensive technology blockade policy against China. The report suggests that in the field of science and technology, China should be targeted with "small courtyards and high walls".
After Biden took office, he set up a deputy adviser position in charge of networks and new technologies on the White House committee. The Department of Defense has set up a task force on China-related strategic assessments, chaired by Asia expert Eli Ratner, who is also a special adviser to Secretary of Defense Lloyd Austin. Biden has given the Pentagon a more important role in the economic and technological spheres to contain China. The task force has developed a list of areas that need to be revisited, "including strategy, operational concepts, technology, military posture, and so on." ”
Make theoretical preparations and unify thinking.
Biden's *** affairs assistant Jake Sullivan wrote an article in Foreign Policy magazine in 2019, advocating "tighter restrictions on two-way technology investment and **", but "selectively" set limits.
The U.S.-China Expert Group on Science and Technology Relations also issued a report calling for restrictions on human capital or foreign direct investment to be as targeted and restrictive as possible. For example, the U.S. should distinguish between broad business investments and China's early-stage strategic investments in biotech companies, and find the right policy tools to reduce the risk of driving talent and capital out of the U.S. Universities should also be able to protect security-related research by moving research to national laboratories or institutions that are highly screened for personnel and have independent security facilities.
The key lies in how to delineate the specific boundaries of the "small courtyard high wall".
On January 26, 2021, the China Strategy Group (CSG), a think tank led by former Google CEO Eric Schmidt, released a report titled "Asymmetric Competition: A Strategy for China & Technology", which explained how to define these core key technology issues. The report was highly endorsed by Biden. The report proposes an analytical framework that analyzes the key technologies of U.S.-China competition from four perspectives:
First, choke point technology: will the failure of this single technology lead to the failure of the larger economic sector?
Second, competitive moats: Does leading in this area provide a strong defensive advantage over the competition?
Third, war security risks: Under special circumstances, does this technology pose a direct threat to the United States?
Fourth, speed technology: Can this technology increase the overall speed of innovation?
To justify this framework, the report also cites a series of specific cases: the necks of Qualcomm Energy Card, ZTE and Huawei; China's rare earth ** can card the neck of the world's technology industry; Semiconductor technology directly affects the innovation speed of 5G, quantum computing, and artificial intelligence technology; Gene editing technology is both an accelerator and a moat. In particular, the report pointed out that the next-generation chip (including semiconductor chips and biochips) technology is not only a neck technology, but also a growth technology, and is closely related to the world, so it is a very important key technology.
The report recommends that Biden** engage in "asymmetric competition" against China in the tech sector and implement a "bifurcation" strategy – that is, selective decoupling – in the tech sector. The report recommends focusing on U.S. dollar settlement, social networking**, search, mobile app stores, and mobile instant messaging, while opening up e-commerce, gaming, business exchanges, and local news.
The United States has formed a more systematic, structured and refined strategic framework in the Sino-US science and technology game. And "as a Biden who sticks to the establishment, these reports are undoubtedly significant reference and **." ”
Emphasizing selective and targeted decoupling to safeguard U.S. business interests in China.
Selective Targeted Decoupling" is the largest business lobby group in the United States, the U.S. Chamber of Commerce (U.C.).s.Chamber of Commerce) to Biden**. They believe that the full decoupling of the United States and China will cause huge losses to American companies, and Biden should determine as soon as possible which regions will not pose a threat to the United States and open them up. Although in principle, the U.S. community understands the security challenges posed by China, but the U.S. does not have a continuous policy tool to regulate the "decoupling" from China. Overly broad restrictions can have unintended consequences, affecting productivity and creativity in the United States. In the long run, it may instead weaken the overall competitiveness of the United States, and ultimately affect Biden, who believes that targeted export controls and other tools can effectively address legitimate concerns about the relatively narrow area.
Everything revolves around the neck of the semiconductor card China - the United States, Taiwan, Japan and South Korea chip quadripartite alliance.
The Chip 4 or Fab 4 Alliance is an informal international alliance formed by the United States and Taiwan, Japan, and South Korea, with the aim of integrating the semiconductor industry in the so-called democratic camp. On September 28, 2022, the alliance held its first director-level preliminary meeting. On February 16, 2023, the first official meeting of the "U.S. East Asia Semiconductor ** Chain Resilience Working Group" was held.
At the same time as signing the "CHIPS Act", Biden launched the Quadripartite Alliance of Chips completely aimed at China, hoping to establish a stable chain for the global semiconductor industry led by the United States, especially the semiconductor industry, based on the core technology of chip design in which the United States occupies an absolute leading position, as well as the main chip production equipment technology, with the chip manufacturing capabilities of Taiwan and South Korea, and Japan's expertise in the field of materials and equipment parts.
"Small courtyard and high wall" will have a far-reaching adverse impact on China's scientific and technological progress and industrial iteration.
The "small courtyard and high wall" is a complete set of combination punches, which will artificially block the normal exchanges and cooperation between China and the Western world in the field of advanced science and technology, and cut off the shortcut of "mastering the skills of the people to control the country." As long as there is no fundamental change in this policy, it will be difficult for China to use its best application-side magic innovation based on the existing underlying technology of the West. To paraphrase the words of a familiar veteran of the semiconductor industry in Baodao: You have never done it, why do you say that you will do it?In the future, I can only think about it slowly by myself.
At the beginning of 2023, ChatGPT was born, which detonated the boom of generative artificial intelligence, and for a while, everyone on the streets and alleys was hotly discussing large models, and AI giants such as OpenAI and Nvidia competed for beauty, and their performance soared like wild horses. Nvidia has become the world's largest semiconductor company in terms of market capitalization.
It is a pity that we seem to be isolated from the world while others are competing for beauty and leading the leapfrog development and disruptive innovation of the artificial intelligence industry. A few years ago, the four artificial intelligence dragons Cambrian, Kuangshi, SenseTime, and Yitu, whose slogans were loud and loud, all saw their stock prices soar down 3,000 feet, and their performance did not improve at all, which can be described as miserable compared with each other. This is the high wall of the small courtyard showing its power. The past five years have been an explosive period for the artificial intelligence industry, just like the Cambrian explosion of life. At present, the first to emerge is only the central computing power represented by the data center, and the more amazing intelligent edge is about to appear. What is certain is that the West, led by the United States, wants to promote the fourth industrial revolution with revolutionary breakthroughs in artificial intelligence. Some of the signs are now emerging, and I've briefly summarized them:
First, in the future, the best high-tech industry can not only crush you in performance, but also crush you in cost, when Chinese manufacturing in the future is facing cheap and good Western manufacturing, what do you do? The typical case is Tesla, which does not rely on stacking materials to sell configurations, but on all-round subversive innovation characterized by subtraction, using new materials + integrated die-casting equipment technology to reshape the century-old Ford assembly line, simplifying the production process and the number of parts to the greatest extent, and making the production cost fall off a cliff. At the same time, the bold use of domain control technology + full vision solution, while achieving leading performance, the price is much lower than other competitors, and the gross profit margin is extremely high. When competitors have spent several years imitating and starting to launch similar products, Tesla will either simply and rudely exchange price for volume and continue to put competitors in blood, or launch a next-generation revolutionary product like Cybertruck, and set the circle again.
Second, relying on strong R&D strength and technical reserves, we will light up the cross-border science and technology tree, and use our unexpected technology path to achieve breakthrough innovation and leapfrog development. After several hundred years of development, the Western world led by the United States has extremely strong strength in the field of basic research, and in particular, since the Cold War, the astronomical amount of R&D funds invested have produced countless R&D results. These achievements are usually idle, but once the time is ripe, they can be taken out for secondary development and utilization, and they have become a revolutionary product technology in a new field. A typical case is Huineng Technology, a Taiwanese all-solid-state battery R&D manufacturer. In the past 17 years, the company has mainly developed ceramic solid-state batteries for medical devices for large customers engaged in the production of high-end medical devices in the United States and Japan, and has continued to promote research and development and reserve technology with the support of orders from Europe and the United States. With the blessing of Wall Street and mainland capital, we made full use of the strong advanced packaging production line equipment resources of Hsinchu Science Park, cooperated in customized development, conquered the core equipment necessary for the large-scale mass production of pure solid-state batteries for vehicles, and took the lead in launching the world's first mass-produced pure solid-state ceramic batteries for vehicles.
Third, establish a strong computing power base, and reshape the R&D-engineering-mass production process accordingly, so as to maximize the company's R&D and manufacturing potential. In fact, the vast majority of domestic enterprises do not have the strength of independent research and development, one is that there is no talent, the second is that there is no capital, and the third is that they can't stand up and can't afford to spend it. Everyone thinks that when I wait for new products from Europe, America and Japan to come out, I will immediately use them to change them, or even copy them as they are, and it is enough to use the advantages of scale. But with the advent of the AI revolution, this tried and tested move may be failing. Why? Let me give you an example: TSMC and Nvidia recently reached a new strategic cooperation, that is, NVIDIA will rely on the computing chip hardware manufactured by TSMC for it to customize and develop a new artificial intelligence high computing power R&D and production management system for TSMC. This can greatly improve TSMC's R&D and production efficiency, and now TSMC produces more than 10,000 products for more than 500 customers, and can produce more than 50,000 products for more than 2,000 customers without large-scale expansion and manpower without large-scale expansion and manpower. These extra customers and products were originally the dishes of TSMC's competitors, but now that they are doing this, TSMC will be in a pot, and others can only starve to death. And so on, there are countless fields and companies that are playing this idea, they are already giants, and now in order to maintain their continuous expansion, they are bound to use powerful artificial intelligence tools to grab food from their peers, and you can't stop it at all, because you don't have the money to use this system.
What should we do to avoid falling into the situation of being abandoned by history.
China's enterprises, the essence is still in the central enterprise part, they have a high level of talent, guaranteed funds, orders each have a serious R & D department, the leadership in the past ten years in the first spur, are also taking the right path. On the one hand, we should strive to maintain a smooth pipeline of industrial cooperation with the developed Western worlds such as Europe, the United States, Japan and so on, so as to grasp the latest global scientific and technological trends, not to be blind, and report the relevant developments to the top management as soon as possible for them to make correct decisions; On the other hand, we should also actively support small and medium-sized enterprises, but please note that I oppose supporting those start-up technology enterprises that can only earn subsidies under the banner of so-called "domestic substitution". These people are the black sheep of the herd, and they are the biggest beneficiaries of the Americans' "small courtyard and high wall" strategy. To paraphrase the words of a familiar Taiwanese semiconductor old-timer, there are some things that you don't do at the most critical stage at that time, and it is very difficult to make up for the class after you realize it, and at that time you can only find a way to change the path to chase, otherwise you will never be able to catch up.
I also want to persuade our domestic investment institutions, we have time to study professional knowledge, more in-depth enterprise front line to practice and understand, especially non-science and engineering investors, you are shouldering the historical responsibility of our entire national industrial upgrading, this burden is heavier than a thousand catties. Don't always brainlessly chase the so-called star projects labeled as "domestic substitution", especially the so-called "East Asian roll house model", which causes a huge waste of resources to the whole country and society to the last chicken feathers, and the last survivor is a big but not strong fat physique, and must rely on the country's continuous blood transfusion to maintain the surface brilliance.
Conclusion. Now that the United States has shown its sword, it wants to point our hole in the high-tech field, and we have no way out. Unlike Russia and the Middle East, China can live comfortably by selling resources or agricultural products, we must have a strong manufacturing industry to ensure the stability and unity of the whole society, and everyone's life can continue to be good, which is a steep slope full of thorns and bumps. Only when everyone unites as one and gives full play to the innate wisdom and talent of the Chinese can we overcome this hurdle. I'm sure we'll do it!