As China stands on the threshold of competing with the United States in critical technology fields, such as A.I., biotechnology, and computing, it’s important to understand the four-stage strategy that has propelled the nation to this point. This approach has allowed China to bypass stages of development, catching up and in some areas achieving technological dominance.
The first stage began in 1978 under Deng Xiaoping, when the country opened its doors to multinational corporations. These firms brought unsophisticated technology to China marking the beginning of China’s integration into the global economy. This laid down the foundation and the infrastructure needed for industrial growth.
The second stage was supplemented by a technology acquisition policy. Since the 1990s, China compelled foreign companies to establish joint ventures with local companies to sell their products and services in the world’s second-largest market. Foreign companies in China were required to teach their managers, scientists, and engineers how to create key technologies and apply them throughout the economy. Over 6,000 new foreign joint ventures were established in China in 2015, with $27.8 billion of Foreign Direct Investment. These joint ventures played a significant part in transferring knowledge and technological know-how required for the advancement of critical technology.
The third step consisted of China’s effort to reverse-engineer foreign technology and use it as a baseline to build industrial capability. During this stage, China enacted such policies as the National Medium- and Long-Term Program for Science and Technology Development of 2006, which identified 402 imported key technologies that China must learn how to produce on its own, such as intelligent cars, integrated circuits, and high-performance computers. Mastering these technologies enabled China to transition from being a mere provider of cheap labor to a major player in high-tech industry. Moving forward, the government would continue to channel massive amounts of money into this transition.
The fourth stage is the most critical, enabling China to become self-sufficient in high-tech industries and become a nation of indigenous innovators. Policies that include the “Made in China 2025 initiative and, most recently, Xi Jinping’s emphasis on developing China’s technological power have led the country to spend massively on research and development, becoming the second largest R&D spender in the world after the United States. Chinese companies are now increasingly developing their own indigenous technologies and are competing with Western companies in fields such as 5G, A.I., electric vehicles, robotics, and space exploration worldwide.
The Chinese approach up to now has been successful. By 2022, China emerged as a global leader in technologies such as high-speed rail, digital production, and drones — sectors critical to the global economy. China’s vision of becoming a global leader in A.I. by 2030 indicates its determination to dominate high-tech industries.
However, China’s success has not come without controversy. China’s reliance on intellectual property theft, hacking, and industrial espionage during the early stages of development has been well documented. Many American companies have seen their innovations copied, stolen, or replicated by Chinese firms. China’s dependence on theft has overshadowed China’s efforts at fostering original innovation.
It is important for the United States to maintain technological superiority and that China neither achieve parity or, even worse, surpass it. The United States would otherwise lose its leverage in the international system. The United States promotes democracy and human rights throughout the world. China’s technological superiority would have serious effects. China would be self-sufficient in advanced industries, and thus much less vulnerable to Western sanctions and other trade tools used, if necessary, to discipline a China that seeks national rejuvenation through the exercise of force against neighboring countries such as Taiwan and the Philippines. Technological parity would boost China’s military capabilities, increasing its influence over global affairs and challenging America’s military dominance not only in the Pacific Ocean, but also in the Middle East, Africa, and Latin America.
It has become more vital than ever for the United States to protect its critical technologies and maintain an edge over China. One of the policy options open to President Donald Trump is to keep Chinese businesses from operating in the U.S. market should they engage in intellectual property theft. The United States must also solidify its relationships with its allies (e.g. E.U., Japan, Canada, and Australia) to deny Chinese businesses that violate intellectual property levels from operating in their markets as well. This would provide a stern warning to the Chinese that there are consequences for obtaining technology illegally and could force China to follow global norms for technology acquisition.
President Trump’s tariff policies on China are also designed to stop intellectual property theft and may help curb China’s technological advances. Moreover, tariffs in the long run bring manufacturing back to the U.S. and will reduce its dependence on Chinese technology. However, tariffs, if not implemented slowly, could result in the slowing down of the economy and in heavy job losses in both countries. The United States should also focus on decoupling its technology ecosystem from China and investing in domestic alternatives to Chinese manufacturers, and it must protect foreign companies tied to China from espionage activities.
If the United States is to maintain its technological lead over China, then it must promote domestic innovation and production, strengthen its defense of intellectual property rights, and strongly encourage its allies to assist its efforts to keep China from unlawfully pursuing advanced technologies. Since China is determined to become the world leader in technologies of strategic importance, it is now imperative that the United States act with speed and precision to remain the world leader, both for its own security and that of its allies.
Derek Levine holds a Ph.D. from the University of Denver’s Korbel School of International Studies and is a professor at Monroe University. He is the author of the book The Dragon Takes Flight: China’s Aviation Policy, Achievements, and Implications for the United States and Europe. His book China’s Path to Dominance: Preparing for Confrontation with the U.S. is due out spring 2025. He has studied, lived, and worked in China and has published articles in numerous academic journals, including the Journal of Contemporary China and the American Journal of China Studies. His work can be found in The Wall Street Journal, The Financial Times, the BBC, The Guardian, and MSNBC. Dr. Levine can be contacted at dlevine@monroeu.edu.
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