Thread by @RushDoshi

Extraordinarily grateful to have had the opportunity to testify on the China challenge before the @SenateCommerce Subcommittee on Security this morning.

My written submission was on "The US, China, & the Fourth Industrial Revolution" - bit.ly/339LRIX

A few points: 1/

1. GLOBAL TECH LEADERSHIP: It's increasingly understood that Beijing is pursuing a robust, state-backed effort to displace the US from global technology leadership not only for commercial and developmental reasons but - just as importantly - for *geopolitical* ones too.

2. AMBITION: Semi-authoritative PRC commentaries talk about the "Fourth Industrial Revolution" as the "main battlefield" of US-China competition - and the stakes are seen as geopolitical.

This is a materialist view of great power transition.

It reveals *global* ambition too.

3. HISTORY: A summary of that view of history:

- The first revolution involved steam power and built Britain's empire

- The second involved electrification (among other tech) and pushed the US to leadership

- The third involved digitization and kept the US leading.

4. OPPORTUNITY: But now things are changing. A chance to win the "Fourth Industrial Revolution" (a concept originally from the WEF that the PRC embraced) is here and offers a "great challenge" for the US and a "great opportunity" for China in *global* competition.

5. INSTITUTIONS: Many PRC sources say catching a tech wave is about *institutions*

They argue that PRC institutions (and industrial policy) perform better than ours, which are (a) polarized, (b) underinvest in talent and science, and (c) tolerate deindustrialization.

6. HOLLOWING OUT: Accordingly, some writers argue that PRC advantages in the contest for the 4th Industrial Revolution include massive basic science R&D, industrial policy, and critically...

*Industrial capacity*

Many suggest it is a strategic blunder that we let ours erode.

7. INDUSTRIAL CAPACITY: These texts argue that the US has better innovation capabilities than China, but its needs PRC factories to convert its innovations to products, which provides opportunities for tech transfer, reverse-engineering, and future innovation from the floor.

8. PRESCRIPTIONS: China’s advantages aren't insurmountable. There’s a bipartisan community of people thinking about how to compete and how to build resilience, and many of the ideas below come from those individuals.

8A: SUPPLY CHAIN INFO: We need to know where we’re vulnerable to Beijing, and that requires some kind of entity that can:

- audit our supply chains
- stress test them
- and build institutionalized knowledge about them

ideally assisted by mandatory reporting requirements.

8B: COORDINATION:

- We need a national strategy for competitiveness and resilience.

- We should study Taiwan's reshoring effort, among the most successful, which involves the "InvestTaiwan" office working as a one-stop-shop for businesses leaving the PRC ($33 bilion so far).

8C: LONG-TERM CORPORATE THINKING

CEO's right now have among the lowest avg tenures in history. Shares are held for only a year on avg. Unsurprisingly, US industry is driven by quarterly earnings.

There are specific tax and financial reforms that could change that calculus.

8D: CORPORATE CONCENTRATION

At the innovation frontier, companies make big bets. If you have one state champion in a sector, and it makes the wrong bet, that's disaster.

If the government supports competition - as it once did in the DOD base - you have multiple bets.

8E: R&D

Federal R&D spending is at a lower percentage of GDP than *before* the Sputnik shock that catalyzed our R&D system.

And Federal R&D doesn't just support science, it also supports institutions for STEM education.

It's a force multiplier. We should vastly increase it.

8F: TALENT

Immigration is a uniquely American strategic advantage. Some 80-90% of foreign born PhDs in many STEM fields stay in the US a decade after graduating.

Lots to do: raise the cap on H1-B visas, grant green cards (cap-exempt) to STEM postgrads, etc.

9. And this brief list here barely scratches the surface. There's lots more to do in areas like standard-setting, trade, information-gathering, and on predatory PRC practices.

10. But to sum up, economic and technology competition with China is as much about playing offense (investing in ourselves) as it is about playing defense (cutting off abuse).

And it is as much about what we do at home as it is about what we do abroad.

Many of the prescriptions came from people who have been so insightful on these issues:

@AaronFriedberg, @geoffreygertz, Mike Brown, Eric Chewning, Pavneet Singh, @JulianGewirtz Tai Ming Cheung, @LindsayPGorman, @damienics, @GaneshSitaraman, @Brad_Setser ...

the @CNASdc "Rising to the Challenge" team, our @BrookingsFP Global China tech authors, @r_zwetsloot , @matthewstoller , @sarahmillerdc , Lucas Kunce, @jacobhelberg, @ChhabraT , @flaggster73 , @MWesselDC , @EBKania and many, many others.