How Washington Boosted Beijing’s Quest for Tech Dominance

In 2016, AlphaGo, a computer program developed by machine learning experts in London, beat the world’s top players of the classical Chinese board game Go. It was a revolutionary breakthrough in artificial intelligence: AlphaGo had demonstrated an unprecedented capacity for intuition and pattern recognition. That a Western program had been the first to achieve this AI feat prompted some commentators to declare that China had experienced a “Sputnik moment,” an event that would trigger widespread unease in the country about its perceived technological lag. Indeed, China has had a Sputnik moment in recent years—but it wasn’t prompted by AlphaGo’s victory. Rather, since 2018, tightening U.S. trade restrictions have threatened the viability of some of China’s biggest firms, fueling anxiety in Beijing and forcing Chinese companies to reinvent the U.S. technologies they can no longer access.

The Chinese government has long had twin ambitions for industrial policy: to be more economically self-sufficient and to achieve technological greatness. For the most part, it has relied on government ministries and state-owned enterprises to pursue these goals, and for the most part, it has come up short. …

Then came U.S. President Donald Trump. By sanctioning entrepreneurial Chinese companies, he forced them to stop relying on U.S. technologies such as semiconductors. Now, most of them are trying to source domestic alternatives or design the necessary technologies themselves. In other words, Trump’s gambit accomplished what the Chinese government never could: aligning private companies’ incentives with the state’s goal of economic self-sufficiency. Read More