By Bob Davis
President Biden portrays U.S. relations with China as a clash of
values: democracy vs. autocracy.
But his rhetoric obscures the administration's more pragmatic
approach of cobbling together groups of countries to work jointly
on technology. The goal is to stay ahead of China in
semiconductors, artificial intelligence and other advances that are
expected to define the economy and military of the future.
Preliminary conversations with U.S. allies have begun, though
the effort is expected to take months, said senior administration
The strategy has both offensive and defensive components. By
combining efforts, the U.S. and its allies can vastly outspend
China, whose research-and-development budget now nearly matches the
U.S. The alliances can also coordinate policies to deny China the
technologies it needs to try to become a global leader.
"We have a very strong interest in making sure that the
techno-democracies come together more effectively so we are the
ones who are doing the shaping of those norms and rules," said
Secretary of State Antony Blinken at his confirmation hearing.
The U.S. plans to organize different alliances depending on the
issue, said a senior administration official, who called the effort
a modular approach. The different groupings generally would include
most of the industrial powers of the Group of Seven nations, plus
some others. (The idea is sometimes called the Democracy 10 or the
An alliance focused on artificial intelligence, for instance,
might include Israel, whose researchers are considered leaders in
the field. One involving export controls would probably include
India, to make sure China is blocked from importing certain
technologies. To encourage countries wary of offending China to
join the alliances, the administration may not announce their
participation, said the senior administration official.
Crucially, say those who have worked on the concept, the
alliances must be flexible and avoid bureaucracy. "Creating another
international institution will lend itself to big announcements
without anything being done," said Anja Manuel, a former Bush State
Department official. "With technology, you have to be nimble."
Among the areas considered ripe for alliances are export
control, technical standards, quantum computing, artificial
intelligence, biotechnology, 5G telecommunications and the rules
governing surveillance technology. The list needs to be narrowed,
say technology experts. Too many efforts would take too long to
organize and overtax government officials.
Semiconductor technology is at the top of the administration's
list because computer chips power the modern economy. China is the
world's largest semiconductor market, but more than 80% of the
chips -- especially advanced ones -- are either imported or
produced by foreign companies in China.
Beijing has spent tens of billions of dollars over the past few
decades to try to build a world-class domestic industry but still
lags behind Western rivals. The Biden administration wants to keep
it that way.
During the Trump administration, the U.S. worked with the
Netherlands to block the sale of Dutch-made semiconductor
manufacturing equipment to China's largest chip maker,
Semiconductor Manufacturing International Corp., which could have
helped it produce leading-edge chips. The Trump Commerce Department
also restricted sales of chip-making equipment to SMIC.
The Biden administration is following up on the curbs. In
February, national security adviser Jake Sullivan spoke with his
Dutch counterpart, Geoffrey van Leeuwen, about China and advanced
technology, among other subjects, according to a White House
Technologists describe semiconductor manufacturing equipment as
a "choke point technology" because it is dominated by just three
countries -- the U.S., Japan and the Netherlands -- making it
relatively simple to restrict. A semiconductor alliance would also
probably include big chip producers in Europe, as well as South
Korea and Taiwan.
Along with restricting technology to China, the members could
pool work on advanced R&D, including financing
multibillion-dollar semiconductor manufacturing facilities outside
A high-profile effort is bound to stir concern -- and possible
retaliation -- from Beijing, which is working to lessen dependence
on foreign technology. Beijing has used its economic heft to try to
cow U.S. allies, including cutting off imports of wine and coal
from Australia after Canberra pressed for an investigation into the
origins of the coronavirus pandemic.
Adding Taiwan, a major semiconductor producer that Beijing
regards as a renegade province, would add to China's concern.
A U.S.-led semiconductor alliance "violates the principles of
market economy and fair competition, and will only artificially
separate the world and destroy international trade rules," said
China's Ministry of Foreign Affairs in a statement.
Beijing has plenty of levers to pull. China is the world's major
supplier of so-called rare earths -- minerals that are
indispensable for producing mobile phones, electronics and military
equipment. In 2010, China limited rare-earth shipments to Japan
during a fight over ownership of islands in the East China Sea,
although China denied it was involved in coercion.
China recently started a new round of regulations of rare earths
and has quizzed foreign companies about their dependence on Chinese
production, which some technology experts view as a warning shot.
China's Foreign Ministry said Beijing is "willing to meet the
legitimate needs of all countries in the world as far as possible
in accordance with the actual capacity and level of China's rare
Mr. Sullivan has lauded past allied opposition to China's
rare-earth restrictions and Mr. Biden nominated the Obama
administration's point person, Katherine Tai, as U.S. Trade
Mr. Biden also recently ordered a study of U.S. dependence on
foreign supply of rare earths. American officials have been working
with Australia and other nations to boost production and create
synthetic substitutes for the minerals.
Cutting off rare-earth exports would backfire by undermining
China's commercial reputation and encouraging mineral production
elsewhere, said Martijn Rasser, a technology analyst at the Center
for a New American Security, a Washington, D.C., think tank.
Technology alliances are worth the risk of blowback, he said.
"Ultimately, the U.S. wants to reduce or eliminate Beijing's
ability to use coercion."
Write to Bob Davis at firstname.lastname@example.org
(END) Dow Jones Newswires
February 28, 2021 10:14 ET (15:14 GMT)
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