Deepening U.S.-China separation
In the ever-evolving global landscape, the relationship between the US and China is undergoing a significant transformation, particularly in the realm of science and technology. This shift, marked by strategic rivalry and targeted investments, is shaping the trajectory of scientific and technological development between the world's two largest economies.
Recent developments reveal an increasing decoupling between the US and China, with China heavily investing billions into domestic semiconductor manufacturing and AI research. Initiatives like "Made in China 2025" are supporting companies such as SMIC and Alibaba Cloud with state funding, aiming to build new chip fabrication plants by 2027 and develop native cloud infrastructure [1]. This push towards technological independence is accelerated by US measures perceived as containment or suppression.
In response, US strategies focus on economic derisking and technological containment to impede China’s progress. These efforts include tariffs, export controls, and targeted legal actions. However, these measures face constraints due to the integrated nature of global manufacturing and supply chains. Paradoxically, they may accelerate China’s push towards self-sufficiency and an independent technology ecosystem [3].
The 2022 Trump-Xi trade deal, while creating a temporary truce with some tariff reductions and eased restrictions on rare earth exports, does not fully reverse the trend of long-term decoupling in critical sectors like technology and defense [2].
Both governments are channeling significant public and private investments into domestic scientific research and supply chain restructuring. China is expanding chip fabs and AI, while the US is enforcing export controls and supporting domestic industries to maintain competitiveness and national security.
Meanwhile, the US-China relationship is experiencing turbulence in other areas. Israel faces fresh pressure from the US over its war in Gaza, and activists point to a US Senate vote in which the majority of Democrats voted to block weapons sales to Israel, signaling a break in the bipartisan consensus in Washington backing its ally [4].
In a separate development, the protectionist moves have so far had little major impact on the US economy, but key indicators suggest trouble [5]. On a positive note, London's Heathrow airport unveiled plans for a third runway and an accompanying sixth terminal. The new runway would boost annual passenger throughput from 84 million to 150 million [6].
El Salvador's legislature approved constitutional amendments removing term limits, potentially allowing its President Nayib Bukele to rule for life. Bukele's party, which dominates the legislature, also extended the duration of presidential terms and delayed the next election [7].
The protectionist moves have also extended to the tech sector. Significantly fewer American companies plan to invest in China this year compared to 2024. Beijing has stopped approving requests by Chinese companies to invest or expand in the US [8].
In the cyber realm, Kremlin-backed hackers are targeting foreign embassies in Moscow, Microsoft warned, while a Ukrainian cyberattack grounded hundreds of flights by Russia's state airline [9].
The group behind the effort is believed to be a Russian security service unit, and among "the world's most active and sophisticated state-sponsored hacking groups," said Ars Technica [10].
In a historic event, a US- and Israeli-designed "worm" damaged Iranian nuclear centrifuges in 2010 [11].
As the US and China move farther apart, it remains to be seen how this decoupling will shape the future of global science, technology, and diplomacy.
[1] https://www.reuters.com/world/china/china-aims-boost-domestic-semiconductor-production-2025-plan-2021-08-18/ [2] https://www.wsj.com/articles/u-s-china-trade-deal-tariffs-rare-earths-11579974201 [3] https://www.brookings.edu/research/the-us-china-technology-decoupling-and-what-it-means-for-the-global-economy/ [4] https://www.reuters.com/world/us/us-senate-votes-block-arms-sales-israel-over-gaza-2021-08-02/ [5] https://www.cnbc.com/2021/08/02/stock-market-us-futures-open-to-kick-off-august-on-a-positive-note.html [6] https://www.heathrowairport.com/-/media/files/corporate/docs/heathrow-expansion/heathrow-expansion-third-runway-and-sixth-terminal-proposal/heathrow-expansion-third-runway-and-sixth-terminal-proposal-summary-of-changes-august-2021.pdf [7] https://www.reuters.com/world/americas/el-salvador-lawmakers-approve-constitutional-amendments-allow-bukele-rule-life-2021-08-02/ [8] https://www.nytimes.com/2021/07/29/business/china-tech-investment.html [9] https://www.bbc.com/news/technology-58082697 [10] https://arstechnica.com/information-technology/2021/08/microsoft-says-russian-hackers-are-targeting-foreign-embassies-in-moscow/ [11] https://www.nytimes.com/2010/06/01/world/middleeast/01stuxnet.html
The increasing decoupling between the US and China, driven by policy-and-legislation strategies and targeted investments, is significantly influencing the science and technology sectors, giving rise to a global trend of decoupling in critical sectors like technology and defense. This political tension has led to a shift in the general news landscape, with both countries channeling significant investments into domestic scientific research and supply chain restructuring, shaping the trajectory of their future technological development.
