China-US Competition: Who Will Win the Digital Infrastructure Contest?

With the rapid escalation of the US suppression strategy against China’s digital economy, America’s allies and an increasing number of developing countries have joined the fight. “desinization” bloc led by Washington. In an effort to stifle the growth of China’s digital economy, the United States has promoted not only protectionist policies that safeguard its dominant mainstream technology, but also an ideologically driven digital security governance model designed to contain technology and Chinese companies.

In certain fields, China’s technology has surpassed even that of developed nations, causing growing concern in the United States. From the virtual digital economy to digital infrastructure, it is clear that the competitive rivalry between China and the United States has intensified and even altered the geopolitical fabric.

Since 1993, the “Information Superhighway” proposed by Bill Clinton has made the United States the main driver and beneficiary of the digital economy. Cisco, Amazon, Microsoft, and other world-leading technology corporations came to dominate the global marketplace. Building on its pioneering advantage in Internet and communication technology, the United States has secured preferential rights in digital technology and established extensive laws and regulations focused on US interests.

The United States was the first nation to advocate for the development of a digital strategy, but its main focus is the creation of a dedicated digital infrastructure (DDI). Unlike a Hybrid Digital Infrastructure (HDI), which emphasizes adding digital components to traditional physical infrastructure to improve performance, a DDI is fully digital and is primarily used to support Internet architecture to promote transformation. and improvement of the digital economy. . Examples of dedicated digital infrastructure would be broadband cables, quantum technology hubs, digital government services, etc. the Biden administration $1 billion Investment in Infrastructure and Jobs Law continues in this tradition. The implication of the network infrastructure is comparable to that of railway construction.

The digital economy in China represents the advanced stage of economic reform efforts begun in the late 1970s. Over the past 40 years, Chinese enterprises have forged a path of independent research and development of communication technology from scratch by embarking on the production for multinational companies. The rise of Chinese communication equipment giants such as Huawei, ZTE, and Lenovo can be attributed to technology transfer from developed countries, allowing China to complete the development leap from dial-up networks and broadband communication. first-generation broadband to 5G mobile internet.

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China’s Internet industry experienced explosive growth in the late 1990s. China’s international competitiveness in digital technologies such as e-commerce, big data, the Internet of Things, artificial intelligence, and cloud computing developed over a period of relatively short time, due in large part to the huge domestic market.

Though China has become the world’s second largest digital economy, reaching a value of RMB 45.5 trillion in 2021, it is difficult for China to achieve long-term stability in the Internet-driven digital economy. Manufacturing is the lifeblood of China’s national economy and the foundation of its foundation and power. China has realized that the the real economy is the key to sustaining high-quality economic development, a lesson learned from the effects of COVID-19, the tightening of global internet regulations and the ongoing escalation of the conflict between Russia and Ukraine. China’s digital infrastructure plan is just one tool to achieve this goal.

China is well aware that after decades of construction, despite leading the world in mobile and broadband network speed, lags far behind developed nations in other infrastructure fields. In 2018, the concept of digital infrastructure was included in the scope of development, starting a stage of central planning and scientific construction by the government. Unlike the US DDI, China’s digital infrastructure plan is titled “new infrastructure” and emphasizes the implementation of digital services on traditional infrastructure. China has thus broken new ground, capitalizing on its strengths in communication networks by deeply integrating them into traditional infrastructure application. This allows China to make up for its hardware shortage and pursue new breakthroughs.

For example, seaports are essential infrastructure that facilitate international trade and connect more than 90 percent of world trade and supply markets, but its current structure is still labor intensive. The COVID-19 pandemic has delivered a severe lesson to the global manufacturing sector. In Europe and the United States, labor shortages, high labor costs, and workplace accidents have caused the “worst stagnation in history”; the average ETA of the load has increased to 8.7 days. Automation and digitization could help unlock those grunts.

In China, Huawei built the “Industry-Academia-Research” paradigm. Working with cooperative enterprises, universities and research institutions, Huawei successfully built the World’s first zero-carbon smart container terminal at Tianjin port, one of the 10 best ports in the world. Huawei took advantage of its own advantages in 5G base stations, Huawei Cloud Stack Online (HCS Online), smart security equipment, and green energy to implement a “intelligent port brain” for the terminal, which integrates advanced intelligent algorithms to optimize driving routes, container handling and cargo dispatch. The Huawei and Tianjin port digital infrastructure project has yielded positive results, paving the way for China to explore best practice models in the technological revolution.

Interconnection, or the free flow of information, logistics, and finance, is the essence of the supply chain. As the supply chain moves from developed countries to the world, the degree of interconnection has become as important as military strength, and society has entered a period where supply chains are a new organization type. Technologies and industries can emerge in a technology pool consisting of several cross-cutting technologies, or develop into a cloud-like structure. Once the essential technology enables a breakthrough, it will drive the growth of the entire industry group, and the company or nation that leads the best practice model will become the target of other competitors.

Since the Trump administration, the United States has focused on artificial intelligence, quantum information, 5G, and advanced manufacturing, designating those areas as four key technologies that promise to boost American prosperity in the long term. From the executive order on “Maintaining American Leadership in Artificial Intelligence” signed during the Trump administration for 2020 “Department of Defense Data Strategy” and then to the Biden administration $2.25 trillion US infrastructure plan, the US digital infrastructure blueprint has gradually shifted from promoting the deep integration of society and technology to unleashing the potential of the digital economy. It has become a strategy to enhance national security and stimulate domestic manufacturing, reaching unprecedented levels of containment and threats directed at other countries.

China and the United States have increasing strategic competition. In recent years, the United States has curbed the rise of China’s high-end technologies through export controls, sanctions and technology bans, and has even worked with its economic allies to pressure China through multilateral mechanisms. Closing the gap between China and the United States in terms of economic output, technology, and soft power is a political reality, and this structural contradiction has become the “politically correct” justification for the US government to maintain its anti-China stance. -China.

So, compared to the United States, China’s digital infrastructure is more conservative, placing more emphasis on digital applications over physical infrastructure. China’s hybrid digital infrastructure is mainly made up of semiconductors and data algorithms. These are exactly the areas where Washington is squeezing Chinese companies.

With the start of the The Sino-American “technological decoupling”,Washington introduced the CHIPS and Science Act to strangle China and aims to follow the European Union’s lead in data protection regulation to conduct a thorough market assessment of Chinese companies’ international operations. This caused a serious setback to China’s goals for its digital infrastructure.

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Due to the fact that the energy generated by digital technology possesses characteristics such as scarcity, hierarchy, and periodicity, competition between China and the United States in the domain of digital infrastructure will continue for the foreseeable future. However, as a result of globalization, the United States cannot ignore the impact and digital importance of China. Both nations will have the opportunity to cooperate, as well as compete, in the implementation of laws and regulations. However, it is not yet clear to what extent this “coop-etition” will persist.

The Sino-US relationship must be managed, not only to avoid disastrous deterioration, but also to enhance global stability and promote world peace and development.

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