The US appears to be gearing up for another battle with China over economics and security, after CNOOC, the Chinese oil company, withdrew its bid for American rival Unocal.
The US government is considering new policies to limit further Beijing's access to high technology. Its motivation derives in part from the desire to slow Chinese military modernisation. But the policies are unlikely to succeed. They are based on a misunderstanding of America's standing as a technology producer, of how technology is spreading internationally and of how dependent the US is itself becoming on globalised innovation.
Washington is trying to prevent Chinese nationals from accessing technology in the US and to limit the commercial flow of high technologies into China. The Pentagon and Department of Commerce are considering new regulations limiting the ability of foreign students and researchers to work with information and technology that is export-controlled. Universities would have to apply for special licences and create restricted areas within laboratories to prevent foreign students from using supercomputers, semiconductors, lasers and sensors in their research.
To prevent the more direct flow of technology to China, the Department of Commerce plans to tighten controls on the export of commercial technologies. The US already restricts military sales to Beijing, so new regulations would apply to dual-use goods and could include semiconductors, chip-making equipment, airplane parts and machine tools. Congress is also seeking ways to limit the ability of other countries to sell technology to China. Before it was replaced with a watered down bill that applied only to American companies, the East Asia Securities Act would have punished any foreign persons, companies or governments that transferred dual-use technology to Beijing.
These policies are unlikely to be effective. Today there are few commercial dual-use technologies unique to the US, and the Japanese, Koreans and Europeans do not consider the transfer of these technologies to China to be a potential security threat. In July, the European Union signed contracts with a group of Chinese companies to develop commercial applications for the Galileo satellite navigation system. The US military fears that Galileo will improve the targeting of the more than 700 short-range missiles Beijing has deployed across from Taiwan. But motivated by a desire to lessen its reliance on the US Global Positioning System and unconvinced of the strategic threat of commercial technologies, the EU has welcomed Chinese participation in the programme. These policies are unlikely to stop the flow of technology to China and could also degrade the competitiveness of the US economy.
Given the small number of Americans who pursue advanced degrees in science and engineering, foreign students are increasingly critical to the nation's science workforce. National security concerns must be addressed, but the new guidelines will harm the ability of American universities to conduct scientific research as well as compete in an increasingly tight market for scientific talent. While Europe, Australia and New Zealand offer attractive fellowships to Chinese students, the US will essentially be declaring that there are two classes of students on campus, those who can fully participate in university research and those barred from certain classes and laboratories.
The long-term security of the US is tied to American participation in the global economy. A recent National Research Council report argues that the most important innovations in materials science and engineering may not take place within the US in the near future. In order to ensure access to advanced technologies developed elsewhere, the US needs to be one of the most active players in international markets and absorb foreign research and development into its economy.
US policymakers must balance the long-term challenges of the diffusion of commercial technology to the Chinese military with the systemic changes that have reshaped the global economy. But export controls should increasingly be a secondary part of a larger policy to preserve US technological superiority. Policymakers need to expand private and public R&D, improve mathematics and science education and increase investment in technology infrastructure. The US must remain open to foreign-born scientific talent. And America must be engaged in world markets so it does not miss the next wave of good ideas, no matter where they are developed.
The writer is a senior fellow in China studies at the Council on Foreign Relations.