Building "small courtyards and high walls" in the United States is destined to be a futile political short-sighted behavior. Government | United States | Politics

Xi Weijian, Associate Professor and Doctoral Supervisor of the School of Marxism at Harbin Institute of Technology

At the White House briefing on September 5th, Assistant to the President for National Security Affairs Sullivan stated that he would not evaluate Huawei Technologies for launching new high-end smartphones, while emphasizing that the United States should continue to implement "small courtyard high wall" technology restrictions. As early as April 27th this year, he also proposed in a Brookings Institution economic agenda for China that the United States does not seek to "decouple" from all Chinese companies, does not prohibit American companies from exporting products in the fields of semiconductors, new energy, and biomedicine to China, and only prohibits the export of "most advanced products". In addition, Sullivan also stressed that this strategy was carefully formulated by the White House after careful consideration. It was not aimed at all emerging economies, but only at opponents in certain fields that the White House considered as potential threats. It could be said that it was a "acupuncture and moxibustion" and "minimally invasive" suppression method that improved the original "decoupling and chain breaking" strategy against China.

However, this strategy aimed at "reducing risks" towards China was actually proposed by a US think tank as early as the Trump administration, and three measurement standards were established - firstly, related technologies are crucial for national security, regional military cooperation, and security; The second is to ensure that the United States remains at the forefront of this technology development; Thirdly, research institutions and enterprises in Chinese universities are relatively lacking in technology and related basic knowledge.

The Western technology restrictions on China have a long history, but their degree of tightness depends on the evolution of the international political situation. With the upgrading and transformation of China's industries since the reform and opening up, it reflects a certain periodicity. From the "Batumi Pact" to the "Wassenaar Agreement", while ensuring that allied and partner countries step in step to impose high-tech blockades on China, the US and Western technology restrictions once had a significant impact on the development of Chinese enterprises in certain technological fields, and even indirectly led to a situation of insufficient innovation and technological dependence of Chinese enterprises. However, represented by Huawei, some Chinese companies that have adhered to their original intentions have joined the global value chain through global division of labor while dedicating themselves to high investment in scientific and technological research and development. With astonishing courage and perseverance, they have achieved leapfrog development in "general purpose technologies" such as information and communication, achieving "2G and 3G catching up", "4G running together", and "5G leading".

In 2018, the United States enacted the Export Control Reform Act, which explicitly proposed restrictions on the export of "emerging and basic technologies". The list of emerging technologies in the export control category released by the Industrial Security Bureau of the US Department of Commerce includes biotechnology, artificial intelligence and machine learning, positioning and navigation, chips, etc. In October 2020, the National Security Council of the United States released a list of key and emerging technologies, including advanced conventional weapons technology, human-computer interaction, quantum computing, chips, space technology, and more. Among them, the two lists jointly include areas such as chips, quantum computing, artificial intelligence, data analysis and storage, which represent a new round of strategic emerging industries in the industrial revolution and are also the key areas where the US "small courtyard high wall" imposes technological restrictions on China.

Compared to the "small courtyard" strategy of painting the ground as a prison, its "high wall" strategy has a clearer intention and mainly includes three isolation measures: first, strengthening multilateral export controls; Secondly, strengthen investment review and restrict China's investment in the field of US technology; The third is to simply engage in a "technology exclusive" style of racist censorship, prohibiting Chinese people from entering or approaching technology sensitive experimental institutions, prohibiting Chinese citizens from participating in scientific research in "small academies" related fields, and sacrificing their academic freedom, which has always been talked about, making similar demands on American universities.

On September 1st last year, as a key measure of the current government's export control to China based on the "small courtyard high wall" strategy, the Biden administration banned American chip companies such as Nvidia from exporting two types of high-end GPU chips to China. On August 9, 2023, President Biden signed Executive Order 14105, establishing an outward investment review mechanism to restrict US entities from investing in China's semiconductor and microelectronics, quantum information technology, and artificial intelligence fields. On August 30th, the day after Huawei released its latest mobile phone, the China Council for the Promotion of International Trade responded to the executive order from the United States, stating that the Biden administration, citing national security as a reason, intended to distort the normal cross-border financing and business activities of Chinese companies. Its discriminatory foreign investment ban and review mechanism, which intervenes in the market through government power, undermines competition, and suppresses the development of industries in other countries, not only harms the opportunities for fair competition among foreign companies, but also undermines the current industry chain that heavily relies on global division of labor and cooperation.

According to the bold prediction of Zoltan Bossa, former Federal Reserve and Treasury officials and Chief Economist at UBS Credit, multinational corporations in the US and the West who are forced to abandon more than half a century of "offshore outsourcing" under political pressure and actively seek to "decouple" emerging market countries will suffer from supply chain and industrial chain disruptions. Especially in the semiconductor and information communication industries associated with general purpose technology, even if China only implements "small courtyards and high walls" restrictive measures, it will not be Chinese companies that suffer greater damage, but Western leading enterprises represented by companies such as Qualcomm and Asma. The senior officials of the US and Western governments who do not understand the "two point theory" and "key point theory" probably do not understand how restricting only one "high wall" field can lead to the overall decline of their advanced manufacturing competitiveness.

Looking back at the strategic measures taken by the White House to encircle China in the past decade after its "return to Asia," from its "sausage cutting" approach to geopolitics in China to financial speculative technological restrictions represented by "small courtyards and high walls." These short-sighted behaviors with strong speculative colors and strong national opportunistic characteristics precisely reflect the lack of "national industrial understanding ability" of American elites caused by the dominance of financial capital for more than half a century. From the amateur questioning of senators during Zuckerberg's appearance in the United States Senate hearing five years ago, it can be seen that the "technology blindness" of political elites who have formulated the "small courtyard high wall" strategy for the United States is already very serious. The United States does not find a way to fill this capacity gap, but only tries its best to turn off the lights of others, which will not make its own path brighter.

Editor and Reviewer: Tang Huagao Peining, Cai Xiaojuan