How can the United States ensure it remains the world’s foremost technology superpower amid China’s rapid advances?
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Turbulence in the Taiwan Strait has brought to light the vulnerabilities in the global technology supply chain.
Beijing’s ambitions to absorb Taipei, the world’s leader in semiconductor manufacturing, have forced the West to reconsider their dependence on foreign suppliers for critical components for advanced manufacturing.
Taiwan reportedly accounts for approximately 63 per cent of the global contract manufacture of microchips, with TSMC the major supplier to the likes of Apple, Intel, Qualcomm and Nvidia.
These risks prompted the US Senate to approve a US$280 billion bill to ramp-up domestic chip production.
According to Jennifer Jackett — non-resident fellow, foreign policy and defence program at the United States Studies Centre — and Dr Charles Edel — Australia chair and senior adviser, Center for Strategic and International Studies — shoring up the industrial base is critical to the United States’ “economic and national security”.
But Jackett and Edel stress the US must look beyond increasing investment in local manufacturing to maintain its technology advantage.
“US actions alone will be insufficient to protect and sustain its technological prowess,” Jackett and Edel write.
The analysts claim Washington’s next step should be exploring opportunities to strengthen international cooperation between “like-minded countries”.
“US allies are force multipliers for US technology strategy and broader strategic competition with China,” they continue.
Jackett and Edel contend US self-reliance on key technologies like semiconductors is “an unrealistic, and costly, proposition”.
“US efforts to guard against technology leakage to China will be futile if like-minded partners do not adopt similar approaches,” they write.
As such, like-minded allies should shape global governance of technology “in line with democratic values”.
“The security of key technologies, such as 5G telecommunications networks, is affected by the regulatory approaches of third countries,” Jackett and Edel add.
“The US has already recognised the pivotal role of allies in advancing a collective technological edge. Technology cooperation is at the heart of major US foreign policy initiatives such as the US-Australia-UK (AUKUS) partnership, the Quadrilateral Security Dialogue between Australia, India, Japan and the United States, and the European Union-US Trade and Technology Council.
“These are not about constraining China, but rather enhancing allied cohesion and innovation in the technological sphere.”
Drawing from research published by the Centre for Strategic and International Studies, Jackett and Edel report that nations across the Indo-Pacific have all taken steps to safeguard their tech capabilities.
- investing in critical technology development;
- building skilled workforces;
- tightening foreign investment screening and export controls; and
- seeking to shape technology standards.
“These actions reflect a shared recognition of the importance of technology for economic prosperity, national security and for the values that shape global norms,” Jackett and Edel continue.
But the analysts claim these efforts are “not as coordinated or deep as they could be”.
Jackett and Edel call for the establishment of a new architecture — an Indo-Pacific technology partnership.
This could involve an annual ministerial and bureaucratic forum, aimed at exploring options to manage sensitive technology cooperation with a “potential adversary”, as well as supporting greater collaboration between like-minded countries.
Members of a prospective Indo-Pacific technology partnership could include “major technology powerhouses” like South Korea, South-East Asian partners, as well as smaller players such as New Zealand, and nations outside the Indo-Pacific like the United Kingdom.
“The partnership should initially focus on three areas where like-minded countries can together have the greatest impact based on current gaps, areas of complementarity and overlaps,” Jackett and Edel write.
“These areas are regulatory harmonisation to counter unwanted knowledge transfer that jeopardises the security of critical technology, strengthening the security and diversity of 5G telecommunications networks and coordinating regional digital infrastructure investment.”
However, Jackett and Edel concede such a framework would have its own challenges, with countries managing varying industrial policies, competing private sector equities and bilateral relationships with the likes of China.
“It would be important that the partnership maintain a positive agenda focused on advancing technological development and the provision of helpful public goods to the region, as much as mitigating risks from potential adversaries,” they write.
“Ultimately, partnering internationally is a key source of strength for US technological advancement.”
Jackett and Edel conclude: “US leadership of a more ambitious and better synched regional effort is one further step that could accelerate its progress in both protecting and advancing its technological edge.”