by UnHerd
Thursday, 18
March 2021
Seen Elsewhere

Has America already won the New Cold War?

When it comes to technology, the US has an insurmountable lead over China
by UnHerd
They’re not done yet. (Credit: Scott Nelson / Getty Images)

Does China’s technological prowess makes it a more “formidable foe” than the USSR ever was? Following a year of on-off lockdowns across the West, the world is now waking up to the country’s lofty position in the post-pandemic order. Last year, China’s was the only major economy to grow; its lunar mission was a success; its naval fleet continued to expand; and it emerged triumphant from trade negotiations with the Trump White House. On next generation technologies like quantum computing and 5G, it is a world leader.

No wonder, then, that there is talk of a ‘New Cold War’.

However, as the academic Michael Kwet points out in Roar magazine, this is a misleading picture. America remains dominant. “A closer look at the tech ecosystem”, he writes, “shows that US corporations are overwhelmingly dominant in the global economy.” Kwet looks at the work of the economist Sean Starrs:

As of 2013, [US transnationals] dominated in terms of profit shares in 18 of the top 25 sectors… For IT Software & Services, US profit share is 76 percent versus China’s 10 percent; for Technology Hardware & Equipment, it is 63 percent for the US versus 6 percent for China, and for Electronics, it is 43 and 10 percent, respectively. Other countries, such as South Korea, Japan and Taiwan, often fare better than China in these categories as well.
- Michael Kwet, Roar Magazine

Kwet argues that it’s a mistake to think that the United States and China are equal competitors when it comes to technological supremacy:

China’s tech industry is dominant inside China, save a handful of major products and services, such as 5G (Huawei), CCTV cameras (Hikvision, Dahua) and social media (TikTok), which also hold large market shares abroad. China also has substantial investments in some foreign tech firms, but this hardly suggests a genuine threat to the dominance of the US, which has a much larger share of foreign investments as well.
- Michael Kwet, Roar Magazine

Outside of China or America, if you are using a computer, there’s a good chance that the software, hardware and network connectivity of the device you’re using is owned or was created by an American company:

The US leads in the categories of search engines (Google); web browsers (Google Chrome, Apple Safari); smartphone and tablet operating systems (Google Android, Apple iOS); desktop and laptop operating systems (Microsoft Windows, macOS); office software (Microsoft Office, Google G Suite, Apple iWork); cloud infrastructure and services (Amazon, Microsoft, Google, IBM); social networking platforms (Facebook, Twitter); transportation (Uber, Lyft); business networking (Microsoft LinkedIn); streaming entertainment (Google, YouTube, Netflix, Hulu) and online advertising (Google, Facebook) — among others.
- Michael Kwet, Roar Magazine

A combination of China’s extraordinary economic growth and signs of US stagnation (gerontocratic leadership, continuing racial strife, military disasters) may have blinded many commentators to America’s enduring strengths. The building blocks of Empire in the 21st century — fibre-optic cables, cloud server farms, elite software programmers — are controlled by a handful of mostly US-based corporations. Don’t be surprised if the ‘New Cold War’ is over before it’s even begun.

Join the discussion

  • China plays a long game. In many ways America is moving to become more Chinese-communist like, adopting policies that benefit China – for instance switching from fossil fuels to solar and battery energy (Chinese dominated), offshoring manufacturing to China, especially hi-tech devices like iPhones, providing technology and education to Chinese researchers and seeing Chinese companies starting to dominate in some sectors.
    Trump briefly put a spoke in the wheel, but it seems that under Biden China is showing signs that it now feels unencumbered having regained its leverage over American politics – again something it’s played for a long time, as spies in Feinstein and Swalwell’s offices show (and clearly China will have documents on the deals made with Hunter Biden, and, given his proclivities, perhaps more). Woke culture has many many echoes of lessons learned about political control from the Cultural Revolution. The lack of press outrage of Chinese human rights abuses (eg Hong Kong, Ughar, Tibet) suggests a press already in Chinese pockets, as do Hollywood’s Chinese friendly films. The press this week is starting with stories that being anti-Asian American is the new growing racism.
    And last week the American military were suggesting that if China invaded Taiwan, the US wouldn’t have a successful response. Chinese influence in Africa is strengthening. The strength of the Chinese economy means it will slowly dominate South East Asia. The spat with Australia over coal, indicates China knows it now has economic muscle, and it will be targeting key technologies (eg Huawei and 5G, Alibaba, virus studies) – not all technologies.
    Does it matter? Historically China hasn’t been expansionist like the Europeans. However, it would also depend if you are worried about being controlled by a technocratic system of government, where wrong-opinions are censored, having to play along to a single approved political viewpoint, where outliers are cancelled, with a pro-establishment media, and limited scope for freedom of thought. There again, perhaps we wouldn’t be able to tell the difference…

  • This is an optimistic assessment but perhaps not too far from the truth.
    Here’s a link to a recent youtube post by Ian Bremmer of Gzero. I find he rarely has anything original to say about the US, but he’s pretty good on China and Russia. In this video he reacts to a Bill Maher piece where Maher predicts the inexorable rise of China and decline of the US. Bremmer lists China’s major weaknesses and it’s a very substantial list.
    Still, I can’t help thinking the US has a good chance of collapsing from within given the political lunacy in our country and the terrible state of our higher education system which we rely on to train the next generation of scientists and business leaders.

  • Was better but now is not. We have in Britain an ignorant people made more ignorant by an appalling education system . I have often talked to young Chinese students from Hong Kong and the mainland. They are in a different league .

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