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Silicon Valley to Shenzhen – What the tech war means for Australia

As tensions ratchet up between the world’s two economic powerhouses, Australian diplomats are seeking to chart a course through the centre of the storm. But as the University of Sydneys Brendan Thomas-Noone explains, this might be an impossible task.

As tensions ratchet up between the world’s two economic powerhouses, Australian diplomats are seeking to chart a course through the centre of the storm. But as the University of Sydneys Brendan Thomas-Noone explains, this might be an impossible task.

The most glaring example of what we might term the "Tech Cold War" is the American rejection of Chinese tech giant Huawei, after US security analysts claimed the telecommunications giant could be funnelling information back home to the CCP. Tellingly, in February US Defense Secretary Mark Esper even warned that US alliances – including NATO – were at risk if European countries went ahead with incorporating Huawei technology into their 5G network rollouts. 

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Over time, his words have rung true — with even the "Special Relationship" showing signs of strain. In May, a coalition of Republican senators moved to block the deployment of 48 US fighter jets to Britain over the Johnson administration's decision to include Huawei infrastructure in what he termed "non-critical" parts of the 5G network. Though the bill wasn't passed, it did underscore the gravity of the situation, and the extent to which US planners are willing to go to ensure compliance with the doctrine. 

With Australia all too keen to toe the line set by our Pacific cousins, a national intelligence and security committee even went so far as to pull out of a visit to the UK planned for March, citing the diplomatic fallout from Johnson’s decision. 

And just this week, the US doubled down on its commitment to 5G foreign policy, flexing its financial muscles to Brazilian policymakers. US ambassador to Brazil Toby Chapman all but promised that Washington is open to funding 5G rollout in the South American nation if it chooses to turn its back on Huawei. 

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From the university hall to the battlefield 

Beyond 5G, technology in a broader sense has become the battleground for the war of influence between China and the US. A heavy-handed approach from policy planners in the US has seen the DOJ launch the aptly-named "China Initiative," with the stated goal of identifying and prosecuting technology theft and IP breaches. Likewise, Congress has expanded the powers of the Committee of Foreign Investment to review non-controlling investments in technology companies.

As dogged followers of US policy interests, this means that Australia is likely to face mounting pressure to curb collaboration with Chinese interests in the years to come. Beyond cut-and-dry technology issues like Huawei, this also raises the question of to what extent Australian researchers will be able to partner with Chinese institutions, even in matters of mutual interest. While defence initiatives are unlikely to get pushed through the cumbersome National Technology and Industrial Base Integration (NTIB) framework, this raises obvious issues for research into medical innovations that are all too pressing in the midst of a pandemic. 

Where the US used to set itself apart from the rest of the world in terms of innovation, many have argued that China will soon lead the way. The country currently has five separate COVID-19 vaccines under clinical study – and this week, National Biotec Group and Sinovac Biotech announced phase two (human) trials. Moreover, the Chinese Academy of Sciences regularly rounds out the lists of top research institutes in the world; for example, beating both Harvard and Yale in Nature's 2019 assessment. 

All this is not lost on Australian academics, who were cognisant of China's growing clout on the academic stage long before the outbreak. In October 2019, Group of Eight chief executive Vicki Thomson announced a partnership with universities in the Middle Kingdom, which sought to deepen ties between elite Australian institutions and China's "C9." Yet at the time, even she seemed to pre-empt pushback from US planners.

"They underscore the point that the world’s best research has no borders. We will continue to adhere to that premise and its foundation of academic freedom. It is what makes Australia a strong economy," said Thomson.

"We do understand that the geopolitical framework is shifting and we have been working closely with the federal government and Australia’s security agencies to develop guidelines that will add weight to our already strong due diligence around research collaboration."

As many have noted, initiatives like these have seen China recently overtake the US as Australia’s “leading international collaborator” of co-authored articles in peer-reviewed scientific journals. One example – a $10 million collaboration between Monash University and China's state-owned aerospace company, the Commercial Air Corporation of China (COMAC) – certainly doesn't seem kosher. 

Yet The Sydney Morning Herald reported just this week that Monash aims to push ahead with the project, which will see Australian researchers help build COMAC's new passenger plane. This comes despite concerns raised by the federal government that "some of the designs may have been stolen as part of a global espionage campaign."  

While US President Donald Trump has taken a sometimes erratic approach to the issue of STEM isolationism, officials within his administration seem hellbent on continuing down that road. In recent weeks, the New York Times cited sources within the Department of Education, who said that the agency plans to expel Chinese graduate students with ties to military schools back home, or the People's Liberation Army (PLA). 

While the Times doesn't delve in any detail on what is meant by those "ties," it's clear that the US is looking to keep its cards closer to its chest than ever before. If this spills over into the Five Eyes domain – which it well could, at this rate – it only seems natural that a relatively middling STEM power such as Australia might start to look elsewhere for much-needed inspiration. If so, this is likely to inflame tensions between Australia and the US – a point that, until now, has been a dealbreaker for Canberra. 

Standing on our own feet

Brendan Thomas-Noone, of Sydney University's United States Studies Centre, argues that Australia will have to learn to cope by itself in this new scientific ecosystem. Stating that "successive Australian governments have taken advantage of the efficiencies globalisation has provided in terms of R&D", he seems to make the case that Australia has slacked off in terms of homegrown R&D in previous decades. 

He notes that total Australian research spending as a share of GDP fell to 1.79 per cent in 2017-2018, down from a historical high of 2.25 per cent in 2008-09. This puts us far below the OECD average of 2.37 per cent. And while these dollar figures give a broad outline of STEM investment (or lack thereof) in Australia over the years, he also drills into the US' global market share of R&D – which provides a strong argument for upping that figure, and quickly. 

"[America's] global share of R&D spending fell from 40 per cent in 2000 to 27.9 in 2015," he writes, noting that the centre of development has shifted largely to our backyard: Asia. 

So what do we do about it? According to Thomas-Noone, we should look to tech-driven success stories outside of the US and China, such as Germany, South Korea and Israel. 

Interestingly, both South Korea and Israel gained recognition as independent states in 1948. Born from bloody conditions, each country heavily invested in tech (and defence, by way of necessity), and were able to leverage industry innovation to propel themselves to first-world status in a matter of a single generation. Today, the two lead the OECD in terms of research intensity measurement, with local firms spending a larger aggregate share of revenue on R&D. 

While neither of these countries offer a direct metaphor for how Australia should look to the years ahead, there are aspects of the ROK's approach to strategy we could. He points out that the Korean government regularly updates a "five-year plan" for national scientific and R&D strategy; now while Defence Science & Technology sets out a 2030 strategy (called 'More, together'), this is ultimately a compartmentalised approach that fails to provide a holistic plan spanning academia, industry, as well as defence itself. 

Your thoughts

If adopted, Thomas-Noone believes that this is one small step that could help Australia to build an R&D industrial policy that "takes into account the changing nature of the global scientific ecosystem, the interlinkages between national security, civilian R&D and national resiliency", which over the long term might help the country better prepare for a more contested technological world.

In fact, it might even go some ways towards redressing the divide between Australian universities–which seem to be pulling towards Beijing – and the government – which seems to be leaning more towards Washington. 

Get involved with the discussion and let us know your thoughts in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it.or This email address is being protected from spambots. You need JavaScript enabled to view it.

Silicon Valley to Shenzhen – What the tech war means for Australia
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