29 September 2024

Re-Balancing The Strategy Of Tech Containment – Analysis

Mohammed Soliman

America has a limited window of opportunity in its rivalry with China. To exploit this, expanded export controls can be used to slow Chinese innovation. Time is therefore a strategic pillar of technology containment. It enables the sequenced implementation of actions, such as imposing export controls and pressuring allies. In turn, Washington could prioritize rebuilding its domestic industries and forging a Washington-centric, tech-economic coalition that is more resilient than the efficiency-focused approach of the 1990s and 2000s. The United States initiated its tech containment by targeting China’s tech champions, including Huawei and ZTE, forcing allies to remove Huawei from 5G networks. Subsequently, it moved from targeting Chinese companies to targeting the broader tech landscape in China by expanding export controls to hinder China’s AI development and military modernization, while simultaneously offering subsidies like the CHIPS and Science Act—and applying geopolitical pressure on Korea and Taiwan—to rebuild domestic chip capacity.

By slowing China’s military modernization and bolstering Taiwan’s defenses, America aims to delay a potential Chinese invasion, making things more difficult for Beijing. Building a domestic industry will enhance resilience against disruptions in the East Asian supply chain. Ultimately, then, time is the essence of America’s tech containment strategy. While it may not completely prevent China from developing its domestic tech industries, slowing China’s progress and gaining time for the United States is a crucial objective. By implementing a comprehensive strategy that includes industrial policy reforms, coordinated export controls with allies and partners, military and nuclear modernization, and a focused effort to reshape the geopolitical, geoeconomic, and technological landscape in the Indo-Pacific, the United States can use this valuable time to slow down China’s innovation. This temporary setback could be crucial for building up Taiwan’s military as tensions and the likelihood of a Chinese invasion increase. This is not to say that this approach is without risk. Washington should be mindful that excessive reliance on these controls could diminish US leverage over time, harm American businesses with a global technological presence, and strain relations with key allies.

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