Thread by @pstAsiatech

US government policy pronouncements related to China and technology have ramped up over the past six months…it is important to understand their evolution, and implications for allies...a thread🧵

After a long wait for a new US China strategy, in a major speech in May 2022 Secretary of State Blinken put technology at the center of US China relations:
state.gov/the-administra…

Blinken on China: It’s home to some of the world’s largest tech companies and it seeks to dominate the technologies and industries of the future....in fields like artificial intelligence, biotechnology, quantum computing. These are areas that Beijing is determined to lead....

Blinken was laying the groundwork for further clarity from the administration on how the administration would view advanced technologies and competition between the US and China in key technology subsectors, like semiconductors.

In March 2021, the National Security Committee on AI had recommended that a senior USG officials articulate the national security concerns around semiconductors in general.nscai.gov/wp-content/upl…

The NSCAI recommendation: The U.S. Government must clearly state the principles that will guide future U.S. decisions regarding policies to protect critical technologies. This will enable more consistent and cohesive technology protection policies and provide clarity…

...to industry regarding how the government intends to utilize these regulatory tools in the current competitive environment, thereby reducing uncertainty for U.S. businesses. No such framework currently exists....

Blinken's speech did not fulfill that key recommendation, which would have to wait until September 16, 2022, when National Security Advisor Jake Sullivan, in a speech at a summit sponsored by the NSCAI successor organization, made several key pronouncements..

...which are key to understanding measures such as the #OctoberSurprise.
For more on the export package released on October 7, see: thechinaproject.com/2022/10/05/new…

In a speech to the Special Competitive Studies Project, funded by former Google CEO Eric Schmidt, also NSCAI chair, Sullivan became the first senior US official to publicly/clearly identify export controls as a “strategic tool” of national security since the Cold War ended.

First, he laid out in broad terms a new policy on how the US intended to keep its dominance in technology. Going forward, there would be no "sliding scale". The US would attempt to maintain an absolute lead over China, not merely keep the country several generations behind.

Full text here: whitehouse.gov/briefing-room/…

The exact quote: “we have to revisit the longstanding premise of maintaining ‘relative’ advantages over competitors in certain key technologies. We previously maintained a ‘sliding scale’ approach that said we need to stay only a couple of generations ahead....

...That is not the strategic environment we are in today. Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.”

Second, in October, in remarks on the new US National Security Strategy (NSS), he claimed that the US, with respect technology, would implement a small yard high fence policy. whitehouse.gov/briefing-room/…

The exact quote: “Many of you have heard the term “small yard, high fence” when it comes to protecting critical technologies. The concept has been citied at think tanks and universities and conferences for years. We are now implementing it.”

And third, when it came to specific sectors, in the SCSP speech: “Computing-related technologies, biotech, and clean tech are truly ‘force multipliers’ through the tech ecosystem. And leadership in each of these is a national security imperative.”

Here, computing related technologies means semiconductors underlying AI and HPC systems. For more on the #OctoberSurprise controls in this arena, see: thechinaproject.com/2022/10/25/you…

Under Secretary of Commerce Alan Estevez drove the point home and its implications for industry in response to questions about national security and technology in late October, after his department had dropped the #OctoberSurprise. cnas.org/publications/t…

Estevez: "I will also say we do not balance trade with national security. When I see an action that needs to be taken for national security, I have top-down coverage to go take care of that regardless of the impact.”

He also asserted that China should be content with making low end chips: “So while we have impacted the Chinese economy in a small sector, I mean they still have a robust capability to make semiconductors that are going to go into the airbags of cars, which I had no problem with.

Only problem with the US approach of maintaining absolute leads in technology sectors, implementing a small yard high fence approach, and viewing advanced technology as force multipliers that are critical for national security? So far, no US allies have made similar statements.

In addition, US does not control all the borders of the small yard, nor all the chokepoints required to implement such a strategy. A good example is semiconductor manufacturing equipment, where Japan and the Netherlands also are caught within the fence. Unwillingly it turns out.

In mid-November, for example, as senior Dutch official indicated that her government would not and could not simply adopt similar US controls.
bloomberg.com/news/articles/…

“The Netherlands will not copy the American measures one-to-one,” Dutch Foreign Trade Minister Liesje Schreinemacher said in an interview with newspaper NRC. “We make our own assessment -- and we do this in consultation with partner countries such as Japan and the US.”

With the US approach to advanced tech, incl semiconductors, AI, quantum computing, and biotechnology, and China, now clear, next stage will be about compelling US allies to take same approach, adopt US positions as underlying basis for implementing new laws and regulations.

US allies do already have some legal authorities to impost some similar controls, but these have been developed within the context of controls on WMD and related technologies.

The major challenge for US officials will be convincing allies that inherently dual use technologies such as semiconductors require similar levels of controls, and specifically for China. So far, there have been no takers.