Eurasia Risks 2020: Exacerbation of the Battle for Technological Dominance

Published 22 - January - 2020

Technological advances are not restricted to America and China. They are a global phenomenon both in terms of design and manufacture and, most importantly, in terms of consumption.” Steve Durbin, Managing Director, ISF

An intensifying battle for technological dominance is among the top risks for Eurasia in 2020. The Astana Club survey respondents believe that the US and China will increase mutual restrictions and protectionist measures in the contest for technological leadership trying to undermine each other’s competitive edges.

The remaining players will not just observe from the distance. Countries’ desire to ensure their cybersecurity will trigger a cyber-weapons race. This will inevitably lead to the development of the new tools that can be used against adversaries.

United States vs China

The US-China battle for leadership over new-generation technologies is steadily growing in scope, opening new frontiers for their global rivalry. The White House considers Beijing’s Made in China 2025 strategy not only as a major element of competition in high-tech markets but also as a strategic challenge to US global leadership.

In this context, the US trade war against China goes far beyond the parties’ market-access controversy. Washington is also trying to limit its main competitor’s technological potential by imposing import barriers upon Chinese producers. In 2020, the US will increasingly encourage its European allies to follow the same path.

However, this will not jeopardize China’s aspiration to become a leader in exporting cutting-edge technology that is not inferior to Western technology and has an obvious price advantage. The battle over using 5G technology to gain access to telecom markets of third countries has demonstrated the potential of Chinese tech giants like ZTE and Huawei.

Most developing countries that plan to launch 5G networks are using Chinese equipment. Some developed nations like Australia and the UK. Besides, Chinese developers have a competitive advantage in artificial intelligence and biotechnology.

According to various estimates, US companies have earned more than $125 billion from 4G technologies. The potential profit from 5G networks will be even higher. China is already ahead of its main competitors in developing a new generation of mobile communication technology. By the end of 2019, at least 150,000 5G base stations will be installed in China, compared to only 10,000 in the United States.

Washington is convinced that China illegally collects data on US advanced technologies, and more importantly, on key industrial sectors, using cyber-espionage and technology transfer requirements.

Although US actions are perceived negatively in China, Beijing cannot respond symmetrically. Due to its dependence on imports of semiconductor chips and other electronic components from the US and developed countries, China cannot close its market to Western technologies.

1. This report was presented as part of the V meeting of the Astana Club held on 11-12 November 2019 in Nur-Sultan.
2. This report was prepared by IWEP’s research team with financial support from the Foundation of the First President of the Republic of Kazakhstan-Elbasy.