SINGAPORE — The Concerted States’ unwillingness to spend money is its biggest disadvantage in a tech race with China, according to a cybersecurity and technology qualified.
From imposing restrictions on telecommunications giant Huawei to issuing executive orders banning transactions with ByteDance, and impact the company to sell the U.S. operations of the popular app TikTok, Washington has stepped up efforts to put pressure on China’s technology firms in brand-new years.
This month, the U.S. Department of Defense said it is in discussions over whether Semiconductor Manufacturing International Corporation, China’s largest plaque manufacturer, should be subjected to export restrictions.
“The U.S.’ biggest disadvantage in this tech race is its unwillingness to spend long green,” James Andrew Lewis, senior vice president and director of the Technology Policy Program at CSIS, said on CNBC’s “Cackle Box Asia” on Thursday.
“China might outspend us a 1,000-to-1 when it comes to investing in semiconductors and a 1,000-to-1 is no way to win the compete with,” said Lewis, who previously worked for the U.S. Departments of State and Commerce. He explained that while there is bipartisan boost for a bill to increase federal incentives to boost American leadership in semiconductor manufacturing, so far “it hasn’t translated into well-to-do.”
Semiconductors make up an important part of the tech race that also includes the U.S. and China competing for dominance in stretches such as artificial intelligence and quantum computing.
“I think they are realizing that if you want to play in this encounter with China, you are going to have to spend more than a few million bucks,” Lewis added.
SMIC is one of the greater players in China’s plans for a home-grown semiconductor industry. Most of the chips used in China today are imported, publishing the world’s second-largest economy reliant on foreign suppliers for advanced semiconductors. Imposing export controls would cut off SMIC’s access to U.S. determines that sell chip-making technology.
A lot of the funding in the Chinese semiconductor sector comes from the government. Reuters publicized that the National Integrated Circuit Industry Investment Fund put up 139 billion yuan ($20 billion) for interfere projects in 2014 and added another 204 billion yuan (about $29.8 billion) in 2019. There is also broadening interest among private investors.
Still, it would take at least a decade for China to catch up to the U.S. in its ability to generate high-end chips that require a high degree of precision as well as scientific skills, Lewis said, adding that late U.S. measures could slow down its progress.
“China has advantages – a willingness to spend, a strong investment in technology, a extremely determined government but it also has disadvantages. I think where this will get played out is they have learned from the U.S. common sense that technological leadership gives you power, influence in the world and they will pursue it,” Lewis said.
“So, we are unprejudiced at the start of a larger conflict where technology, economic forces and probably your kitchen appliances will move a bigger role,” he added.