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The Owl in the Olive Tree | Aug. 13, 2019

The Emergence of the Chinese Techno-Security State: United States-China Great Power Competition in Comparative Historical Context

By Tai Ming Cheung

The intensifying great power competition between the United States and China is frequently referred to as a “New Cold War” because of the echoes to the all-consuming grand struggle between the United States and Soviet Union in the second half of the 20th Century. While there are some similarities between these two periods—such as the contest between authoritarian and democratic systems and the geo-strategic and military competition—the differences are far more pronounced and decisive.

Although a core component of the contemporary United States-China rivalry is about national security, there are other critical elements that make the competition far more complicated and comprehensive than the United States-Soviet stand-off. First, geo-economic competition—which can be compared to the trade, investment, and technological rivalry between the United States and Japan in the 1980s and 1990s—is as important today as was the geo-strategic rivalry of the Cold War. Second, the civil-military technological arena is more blurred, more expansive, and plays a far more influential role in shaping power dynamics today than in the past.

Two inter-related but distinct points are discussed here to show the enormous challenge the United States faces in dealing with the long-term competition with China in the technological-economic-security nexus.

The first point is that the lessons of the late 20th Century Cold War should not be drawn from simply examining the United States-Soviet confrontation, but from a broader and more holistic perspective of the United States-Soviet-Japanese competition of the 1980s-1990s. An appreciation of the close relationship between geo-strategic and geo-economic competition will be useful in understanding the second point: the long-term challenge posed by China is taking place between military and civilian domains and is focused on strategic emerging technologies and innovation, to which the United States is struggling to respond.

Geo-Strategic and Geo-Economic Cold War Challenges
Fortunately for the United States, the full brunt of the challenges posed by the Soviet Union and Japan during the second half of the 20th Century occurred at different periods. The Soviet military threat was primarily between the 1950s and 1970s. By the 1980s, the Soviet Union was in serious economic decline and its ability to compete militarily with the United States was lagging, especially technologically. For Japan, it only became a strong economic and technological competitor in the 1980s and subsequently faded in the 1990s.

Although the Soviet Union and Japan were different political regimes—the former authoritarian and the latter liberal democratic—they did share some important characteristics:

  1. Both were techno-nationalist states (closed technological borders, emphasis on indigenous technological development), although Japan pursued a commercial techno-nationalist approach while the Soviet Union emphasized military techno-nationalist development.
  2. Both were statist regimes, in which the role of the state was central in guiding development; the Soviet state had absolute hands-on control, while the Japanese state’s relationship with the non-state sector was more negotiable.
  3. The foundations of technological and industrial development for both states (military-industrial for the Soviet Union, commercial-export for Japan) were based on absorption (relying on foreign sources) and engineering (incremental industrial development).

The United States had a very different development model. It had both a military techno-nationalist base and a commercial techno-globalist system that co-existed alongside each other—with varying degrees of integration—but shared vital components of the innovation system, such as a vibrant research and development system—especially a strong university-based basic research apparatus. Having an integrated military and civilian technological and economic system provided enormous benefits and synergies—strong corporations, powerful innovation systems—that the Soviet Union and Japan did not have, and was critical for long-term sustainable competition.

When the geo-economic and geo-strategic competition between the United States and the Soviet Union and Japan came to a head in the 1980s (in the case of the Soviet Union) and the early 1990s (in the case of Japan), this took place against the backdrop of profound technological changes (a revolution in military affairs in the defense realm with the advent of precision strike and stealth, and a technological-economic paradigm shift commercially with the arrival of the information age) that allowed the United States to excel because of the structural advantage created by its market-oriented and technologically innovative system.

The Challenge of China in the 21st Century
Today, the United States once again faces a formidable strategic challenger with China, which represents a combined Soviet-Japanese competitor; China is an integrated military and commercial techno-nationalist state. But China is more than just a sum of the military and commercial techno-nationalist components. If that was simply the case, China would not pose as much as a headache for the United States It is the fact that the Chinese military and commercial technological and economic apparatuses are closely intertwined and blurred that represent one of the biggest challenges for the United States. This is because the integrated Chinese dual-use economy is deeply embedded with the U.S. and global economies, so untangling and decoupling this thick interdependence will also inflict huge economic damage to the U.S. and the international economic order.  

In dealing with the technological challenges of the Soviet Union and Japan in the 20th Century, the United States established a number of institutional frameworks. There was a robust multilateral export control regime (Coordinating Committee for Multilateral Export Controls) to deal with the Soviet Union and its allies, and there were investment control mechanisms—such as the Committee on Foreign Investment in the United States (CFIUS)—to manage the Japanese challenge. These regimes worked effectively in their own spheres, but the integrated civil-military challenge coming from China requires the United States to come up with a much more robust and joint whole-of-government approach than the ad hoc and underdeveloped intra-agency process that currently exists.

The U.S. is now revamping its legacy regimes through incremental reform—such as the 2018 Foreign Investment Risk Review Modernization Act and a revamped export control regime. While these reforms will strengthen export and investment control regimes, a gaping hole is the dual-use and strategic emerging high-technology domains that calls for a new dedicated institutional mechanism that is able to more effectively understand and police this expansive intersection between economics, trade, investment, technology, defense, and national security.

The Emergence of the Chinese Techno-Security State under Xi Jinping
China under Xi Jinping is a security-maximizing state that is building its power and prestige on an increasingly capable and expansive economic and technological foundation. The country fits the profile of what can be defined as a techno-security state in which the development efforts of the state are prioritized to meeting expansive national security requirements, of which the cultivation of strategic technological and industrial capabilities are prime goals.

Xi has invested considerable time, effort, and political capital to forge a techno-security state under his close personal control. He chairs a number of important entities that oversee critical national security and techno-security related functions. They include the Central Military Commission, National Security Commission, and the Central Cyberspace Affairs Commission.

The grand strategy of Xi’s techno-security state has several core components:

  • Building a strong national security state, especially prioritizing the development of military, internal security, and information control capabilities across a wide array of domains, of which cyber is of central importance.
  • Building an advanced defense science, technological, and industrial base.
  • Forging a dual-use strategic innovation system that is comprised of a tightly integrated and expansive civil-military economic base, and the cultivation of a capable research, development, and translation system focusing on strategic emerging core technologies.

Xi has called for building an “integrated national strategic system and strategic capabilities” that will allow China to “implement key science and technology projects and race to occupy the strategic high ground.”(2018 Xinhua News Agency) He has made civil-military integration, or what he calls military-civil fusion (MCF), a key element of establishing a technologically advanced and militarily powerful Chinese state. He has replaced the gradualist approach of his immediate predecessors in favor of a far more ambitious, high-powered, and expansive strategy that aims to establish a tightly integrated dual-use economy. To ensure that his goals and vision are carried out, Xi has put himself in direct charge of this grand integration initiative.

Key elements of this national strategic system are detailed in some of the MCF implementation plans that have been formulated since the adoption of the MCF development strategy. This includes the 13th 5-Year Special Plan for Science and Technology MCF Development, issued jointly in 2017 by the Central Military Commission, the Science and Technology Commission, and the Ministry of Science and Technology, that detailed the establishment of an integrated system to conduct basic, cutting-edge Research and Development in artificial intelligence, bio-technology, advanced electronics, quantum, advanced energy, advanced manufacturing, future networks, and new materials.

Competing with the Techno-security State
Techno-security rivalry is at the heart of the long-term great power competition between the United States and China and it threatens to fundamentally fracture the close interdependence the two countries have forged bilaterally and across the global order over the past few decades. The blurring of the state-non-state and civil-military boundaries makes it extremely difficult for the United States and its allies to be nuanced and precise in assessing national security threats posed by China, but it is vital that the United States and its allies are careful and targeted in their approach rather than pursuing a blunt strategy of severing virtually all scientific, technological, and economic ties with China.

Here are a few possible initial steps that can be done to meet this complex challenge: First, the U.S. and its allies need to develop a bigger and better trained cadre of analysts specializing in China, national security, and technology issues. Second, the U.S. should establish a permanent regulatory agency focusing on dual-use, emerging technology, and related geo-economic matters. Third, the United States should work much more closely with its allies in Europe, Asia, and other parts of the world to forge a collaborative multilateral approach, because the United States cannot successfully compete with China in the techno-security arena alone.

Associated Reading
This article draws from a book-length study that the author is currently completing. For related readings, see:
2018. Xi Calls for Deepened Military-Civilian Integration. Xinhua News Agency. March 12.
Cheung, Tai Ming. 2019. From Big to Powerful: China’s Quest for Security and Power in the Age of Innovation. East Asia Institute Working Paper. April.
Cheung, Tai Ming, and Tom Manhken, eds. 2018. The Gathering Pacific Storm: Emerging US-China Strategic Competition in Defense Technological and Industrial Development. Amherst, NY: Cambria Press.
Cheung, Tai Ming. 2015. Continuity and Change in China's Strategic Innovation System. Issues and Studies. 51(2): 139-169.

Tai Ming Cheung is a professor in the School of Global Policy and Strategy at the University of California, San Diego, and director of the Institute on Global Conflict and Cooperation. He is the author of Fortifying China: The Struggle to Build a Modern Defense Economy.

Associated Minerva Project
The Evolving Relationship between Technology and National Security in China: Innovation, Defense Transformation, and China’s Place in the Global Technology Order

Supporting Service Agency
Army Research Office

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