U.S.-China: Winning the Economic Competition

Submitted Written Testimony¹

Key Observations²

Chairman Cotton, Ranking Member Cortez Masto, distinguished members of the subcommittee, thank you for the opportunity to share insights on a topic of vital importance to the United States. I want to begin with five observations on the economic competition with China:

U.S. economic security is entrenched in American technological leadership.

The 21st century will be defined by competition; a contest of economic power rooted in technological advances. How countries decide to compete will shape the lives of billions of people. Technology-leading countries will determine how to harness new technologies to combat disease, feed their people, counter climate change, gain wealth, explore the universe, gain influence over others, secure their interests, and protect their independence and freedom. The leaders in adopting emerging technologies such as artificial intelligence (AI), quantum sciences, biotechnology, and next-generation telecommunications, and those who shape their use, will garner economic, military, and political strength for decades.

American technological leadership is at risk.

The United States of today is rooted in investments in education, science, research and development (R&D), and infrastructure made decades ago. On its current trajectory, with a shrinking share of global R&D spending, human capital shortfalls, and the rapid rise of a near-peer competitor, the United States cannot continue to coast. America’s ability to harness the emerging technologies that will fuel the 21st century economy to the fullest extent possible is at stake. Falling short would squander economic and societal benefits and expose the United States to avoidable risks and challenges.

The United States needs a national strategy for technology to effectively compete.

China has become a serious technological competitor. On strategic emerging technologies such as 5G wireless networks, AI, and genomics, China is at rough parity with the United States, and perhaps ahead. Much of China’s success lies in its ability to formulate a comprehensive, long-term government strategy to gain dominance in key strategic technologies. In contrast, in the United States such policymaking is generally reactive and piecemeal: The United States needs a strategic, national level approach to effectively compete with China.

Multinational collaboration should be a cornerstone of a national technology strategy.

The United States cannot go it alone. No one country can achieve its full potential in desired capabilities across the spectrum of critical technology areas on its own. Nor can any single state muster the resources to nurture all the necessary talent and control vital supply chains needed to achieve and maintain such technological leadership. Instead, America should maximize one of its greatest competitive strengths: its unmatched network of allies and partners. Broad-based, proactive, and long-term multilateral cooperation among like-minded countries is needed to maximize effectiveness across a range of areas, including R&D, supply chain diversity and security, standards-setting, multilateral export controls, and countering the illiberal use of technology.

The pandemic crisis presents opportunity and urgency to act.

The global order is at an inflection point where decisions made by world leaders in coming months will shape the world for decades. The stakes are high: long-term economic and technological competitiveness, critical infrastructure integrity and security, and cohesion among the world’s liberal democracies. Collaboration between the allies will help to ensure that the upheavals of the post-pandemic world can be dealt with more effectively. It will also improve the chances that the coming decades are ones where their societies and economies can prosper, all while blunting the coercive power of authoritarian countries.