Key facts
- Chinese companies, such as CATL, are leading in advanced technologies like electric vehicle batteries.
- A study shows China now leads in 57 of 64 key frontier technologies, compared to the US leading in seven.
- US officials worry about becoming dependent on Chinese technology, citing concerns about predatory practices and market cornering.
- China's AI strategy focuses on practical applications, a pattern seen in its previous dominance of e-commerce and e-payments.
- The US faces a decision between utilizing China's advanced technology or developing its own independent supply chains.
U.S. officials are increasingly concerned that China is pulling ahead in critical technology sectors, potentially leading to American dependence. Companies like Contemporary Amperex Technology Company Ltd. (CATL), the world's largest battery manufacturer, are developing advanced technologies, such as electric vehicle batteries that can charge significantly faster and offer longer ranges.
Historically, U.S. firms held a technological lead, often manufacturing in China and transferring knowledge. However, in areas like batteries, solar panels, and rare earths, China has rapidly advanced and is planning to dominate global markets. This shift is raising alarms among U.S. lawmakers and administration officials who argue that China has used predatory practices and subsidies to build its dominance, potentially hollowing out industrial bases in other countries.
Representative John Moolenaar has warned against entrusting critical industries to companies like CATL, calling it a "grave error." Conversely, some experts suggest that isolating China could hinder scientific progress and efforts to combat climate change. Kyle Chan, a fellow at the Brookings Institution, notes that the technological innovation landscape is shifting from the West to China.
A study by the Australian Strategic Policy Institute found that China now leads in 57 out of 64 key frontier technologies, a significant reversal from two decades ago when the U.S. led in most categories. Chinese firms are also aggressively competing in sectors like AI, semiconductors, biotechnology, and space technology.
In artificial intelligence, Chinese companies are focusing on practical applications, similar to their success in e-commerce and e-payments, while U.S. firms concentrate more on model development. This strategic focus, coupled with substantial state support for China's AI sector, is narrowing the gap with the U.S. The U.S. now faces a critical decision: either leverage China's advanced and cheaper technology or invest heavily to develop independent supply chains for crucial industries.