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The tech cold-war gets real

10 June 2021

In the past I have written a few columns about the way that China is gaining rapidly on the US in terms of technological and military capabilities.

Well now it seems that the battle for tech supremacy is taking a new turn, with the USA finally waking up to the realisation that they've been resting on their laurels for far too long. Due to their complacency, China really is stepping up to the bat and has the potential to become "the" superpower in this area.

As a result of this sudden realisation, the US Senate has just agreed to massively hike the amount of money that is to be spent on research and technology within the nation's borders.

The question that must now be asked however, is this too-little, too late?

I suspect the recent chip shortages have rammed home the USA's dependency on foreign nations and the strategic weakness this represents to its economy and security. Nothing is more likely to spur the US government into action than a threat in either of those two key areas.

A key thrust of this new investment will be a cool quarter of a trillion dollars that will flow into semiconductor development and manufacturing. Yes, read that again... quarter of a trillion US dollars!

Perhaps it has finally dawned on America that if China was to annex Taiwan it would be game-over, at least from the perspective of the previously unacknowledged tech-war that has been ramping up over the past decade or two.

In the event that China did move against Taiwan, the USA would be in a very difficult position. Either it would have to then be beholding to China for supply of many of the more advanced chips or it would have to become militarily engaged in an attempt to free Taiwan from the CCP's grip. I really don't think the US wants to find itself in either of these positions so it has no option but to invest huge sums of money to create mitigate the risk.

Of course this is probably not good news for Taiwan. Once it loses its own insurance (ie: being one of the few 7nm-capable countries with Western ties) then it is far less able to count on US support in any conflict with mainland China.

The same bill that will authorise this expenditure also includes a number of anti-Chinese provisions such as prohibiting government purchase of Chinese-made drones and sanctioning Chinese entities believed to be complicit in cyber-attacks against US targets.

It seems that the tech cold-war really is heating up and I can't wait to see just how China responds to this move on the part of the USA.

Will this force their hand to move against Taiwan so as to take full advantage of the position they currently hold? Or will they simply work harder on ramping up their own technological advances and hope to outpace America on that front and in terms of military might?

It seems that almost everywhere you look (including the area of space exploration), China is moving at an unprecedented rate so as to match the West's accomplishments.

Ultimately, one of the biggest battlefields in the tech war will be EVs, where China is already doing far better than many of its competitors are prepared to admit. The uptake of electric vehicles in China is apparently quite high and they have excellent control over the supply of rare-earth elements such as neodymium that are becoming increasingly essential to this tech.

In fact, just looking at the future, I wonder if US$250bn is enough.

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