Innovation Core - Michigan 2024 BFHR

INNOVATION ADVANTAGE CORE
AFFIRMATIVE
U---China High
U---China Innovation High
Chinese innovation threatens to overtake the US.
Mark Kennedy 24 (Director of the Wilson Center’s Wahba Institute for Strategic Competition, 3/5/24, “America Must Awaken from Complacency to Win the Tech Race,” https://www.wilsoncenter.org/article/america-must-awaken-complacency-win-tech-race, dhiya)
Naïve arrogance keeps too many Americans from seeing that China has become a tech powerhouse. China has a credible path to gaining technological parity (and in some cases, superiority) in military applications.
Yet too many believe all the US needs to do is to keep the CCP from stealing American technologies (essential – yes, sufficient – no). They have not accepted the fact that the US trails in key technologies and risks falling behind in others. They don’t fully appreciate how harmful America losing its innovative edge would be to its prosperity and security, now and in the future.
America must awaken from complacency and dedicate itself to winning the race for tech leadership.
China is Competing for Tech Leadership
Ever since JFK’s call to win the space race accelerated investment in talent and discovery, America has enjoyed the advantage of being home to much of the most innovative technologies. This has propelled its prosperity by making its products in high demand and advanced its security by giving its military an advantage over any foe. Yet the CCP’s multi-decade focus on achieving leadership in key technologies has undercut America’s advantage.
A recent study found China leading in 37 out of 44 crucial technologies based on the proportion each nation had of the most highly cited research reports. For those frustrated that open-source publication accelerates the dissemination of dual-use technologies, the good news is China is publishing even more than America. Neither the classified insights the US gains nor the People’s Liberation Army’s (PLA) network of military science academies are included in the comparison. The picture may change if they were. Yet dominant Chinese market shares in critical minerals, batteries, EVs, solar cells, telecommunications, and more lend credence to China’s technological advances.
A report by the Australian Strategic Policy Institute (ASPI) suggests...
...no one should have been surprised when China tested a nuclear-capable hypersonic glide vehicle. China publishes four times the most cited papers as the US on hypersonic and advanced aircraft engines. It also leads in other sciences vital to hypersonic flight.
Achieving speeds above Mach 5 requires advances in low-friction surfaces to reduce and dissipate heat produced by air friction. It also demands the development of novel materials able to handle high temperatures and high forces on control surfaces. China publishes three times as many highly cited papers as the second-place country (often, but not always the US) on novel metamaterials, eight times as many on coatings and three times as many on high-specification machining processes. These are areas where China manufacturing producing nearly twice as much output as the US, gives the PRC an advantage.
The CCP’s penchant for secrecy is reflected in its research focus. Their research leadership in photonic sensors, quantum communications, advanced optical communications, and post-quantum cryptography could allow the CCP to make their communications impenetrable by the West and make the West’s classified communications vulnerable.
The ASPI study shows the US leading in research publications in high-performance computing, integrated circuits design and fabrication, and natural language processing. But it trails China in machine learning, advanced analytics, and protective cybersecurity technologies.
It shows the US leading in terms of research in small satellites and space launches, but trailing China in drones, autonomous systems, and advanced robotics.
Finally, it shows the US leading in quantum computing research, but trailing China in post-quantum cryptography, quantum communications, and quantum sensors.
China Contesting Military Leadership
How does this translate into military applications? During the decades America spent fighting terrorism, the CCP rapidly built its military capabilities. The US military is sprinting to retool to deter great power conflict. At the time of JFK’s address, defense spending represented 9% of GDP. Today it is at a post-World War II low of 3.5%.
Since the time of JFK’s inauguration, the Department of Defense’s (DoD) research funding has declined from 36% of global R&D to a mere 3% now. Today’s America’s military is more a consumer than a provider of technology. The CCP has fused its quest for technological and military leadership. It is no different in the US. The contest for technological military superiority is in great part determined by which side can more quickly adapt commercially developed technologies.
The CCP has the advantage of building anew while the US is handicapped by needing to replace an installed base of aging technology and bloated base structure that is aggressively defended by elected representatives in Congress prioritizing keeping federal jobs in their districts.
The CCP has aggressively steered its industry to focus on technologies that give its military a technological edge, while US industry remains focused on gaining the greater payback from consumer markets.
Captains of American industry gave Xi Jinping a standing ovation during his US visit last year, even as the US military is increasingly reliant on industry for its innovative edge.
Chinese R&D spending is skyrocketing.
Science & Technology Action Committee 24 (A group of 25 non-profit, academic, foundation, and corporate leaders working to dramatically strengthen U.S. science and technology. The Committee is co-chaired by: Bill Novelli, Professor Emeritus and founder of Business for Impact at Georgetown University and former CEO of AARP, Sudip Parikh, CEO, American Association for the Advancement of Science (AAAS) and Executive Publisher of the Science Family of Journals, Mary Woolley, President & CEO of Research!America, and Keith Yamamoto, Vice Chancellor for Science Policy and Strategy at UCSF and President of the American Association for the Advancement of Science (AAAS), 5/1/24, “China is investing more in science and technology than ever before. Here’s why that’s a problem,” https://sciencetechaction.org/news-item/china-is-investing-more-in-science-and-technology-than-ever-before-heres-why-thats-a-problem/, dhiya)
As China boldly charges forward with massive funding increases for research and development, the United States is retreating on its commitment to science and technology and risks falling behind in the global competitiveness race.
The Chinese government recently announced a massive $52 billion investment in research and development for 2024 — a 10% surge over the previous year that represents the largest percentage increase of any major funding area, including military spending.
In contrast, the U.S. cut total investment in research and development for fiscal 2024 by 2.7%, including a sharp 11.3% cut in non-defense R&D spending. The budget of the National Science Foundation, the nation’s leading science agency, was cut by 8%, far short of President Biden’s request for a 19% boost.
“We are sacrificing our own competitiveness, unilaterally. We’re not even in the race,” Science & Technology Action Committee (STAC) Co-Chair Sudip Parikh said at a recent Center for Strategic & International Studies (CSIS) event. “We’ve got to make sure we’re putting the heat and that pressure on our elected officials to ensure we maintain the scientific investment required for economic vitality and national security.”
The U.S. was once perceived as the undisputed global leader in science and technology. As China ramps up its investment in innovation, it’s clear that many Americans believe U.S. leadership is now in jeopardy. In fact, a poll in the STAC’s State of Science in America report found 75% of respondents in five workforce sectors believe the U.S. is losing or has already lost global leadership in science and technology. The report also found 60% of respondents believe China will be the leader within just five years.
It’s a trend the country can no longer ignore. As the global competitiveness race continues unabated, it’s clear that the U.S. must develop a national science and technology strategy and ramp up federal investment in the cutting-edge technologies that will shape the future — from artificial intelligence to quantum computing to advanced bioscience — to ensure the new era of innovation happens right here in the U.S.
“Anything that deteriorates the innovation culture in America is a direct threat to our national security,” Dr. John Hamre, president and CEO of CSIS, said at a recent Research!America event.
Over the past several decades, the United States has failed to keep pace with science and technology spending relative to China. Federal R&D spending has decreased to just under 0.7% of our GDP today compared to 1.9% in 1964 at the height of the space race. Between 2010 and 2019, the U.S. share of global research and development spending declined from 29% of global R&D to 27%, while China’s share increased from 15% to 22%.
“China has steadily increased their investments in research and development. And these investments have a clearly stated purpose: unseating the United States as the world’s leader in science and technology,” Rep. Zoe Lofgren (D-Calif.), ranking member of the House Science, Space, and Technology Committee, recently wrote in an op-ed for The Hill. “China’s Communist Party understands that winning the technological race will result in China winning the economic and national security race.”
We can’t let that happen. In order for the U.S. to remain a global leader, lawmakers must step up to provide the vital science and technology funding the nation needs — before it’s too late.
“Throughout our nation’s history, federal support for science and technology has fueled many of the most transformative innovations that have helped the United States overcome its biggest challenges,” said Parikh, CEO of American Association for the Advancement of Science (AAAS) and Executive Publisher of the Science Family of Journals who served as science advisor and professional staff to Senate Appropriations Republicans from 2001-2009. “As new threats to our national security and economy arise, strong federal leadership on science and technology is essential.”
U---China Innovation High---AT: Sanctions
Sanctions put the US behind.
Miles M. Evers 24 (Assistant professor of political science at the University of Connecticut, 1/14/24, “Why the United States Is Losing the Tech War With China,” https://www.lawfaremedia.org/article/why-the-united-states-is-losing-the-tech-war-with-china, dhiya)
Semiconductors—or “computer chips”—lie at the heart of the competition between the United States and China. They are one of the most critical sectors of the modern economy and an irreplaceable input in almost every modern technology, from washing machines to missile guidance systems. For this reason, having reliable and affordable access to semiconductors can shape a country’s economic and military power. China is a prime example. Its meteoric rise over the past 20 years is due mainly to the country’s high concentration of global electronics production. Chinese firms like Huawei and ZTE have led the way in quantum computing, artificial intelligence, and 5G technologies.
Over the past several years, the United States has sought to restrict China’s access to semiconductor technologies. Traditionally, Washington only ever limited the export of cutting-edge chips that might have military applications, believing that the United States could “run faster” than China through innovation and free trade. However, after China released its “Made in China” strategy in 2015, concern spread that China’s military and economic power was growing faster than expected and that it was using U.S. commercial technologies to do so. Consequently, the United States needed to “maintain as large of a lead as possible” in semiconductor technologies. This meant restricting sales of advanced semiconductor technologies to Chinese businesses, regardless of their civilian or military applications, and bolstering the domestic semiconductor industry through the $280 billion CHIPS and Science Act.
In a recent article, “Wars without Gun Smoke,” Ling Chen and I explore the strategic logic behind U.S. technology policy toward China and its likelihood for success. We show that, like in past power transitions between rising and declining powers, the United States is waging a preventive economic war to stop China from becoming a peer competitor. However, the position of American businesses in the global value chains (GVCs) for semiconductors puts the United States at a disadvantage in this war. Ultimately, we find the United States has started a fight that it seems destined to lose.
The Global Value Chain for Semiconductors
Like most commodities, semiconductors are produced through global value chains, in which the stages of the production process are spread among firms in different countries. For semiconductors, the chain typically begins with “fabless” chipmakers in the United States who design the chip’s architecture using electronic automation software. These designers then outsource manufacturing to “foundries” in Taiwan, Japan, or South Korea that fabricate the semiconductor from silicon wafers and other raw materials. The chips are sent to Chinese firms for assembly, testing, and packing into a final product like a cellphone or laptop. Chains like this are generally of net benefit to the world. They promote specialization, reduce costs, and ultimately increase profits.
Each firm that participates in a GVC contributes some “value” to the final price of an item, albeit to varying degrees. High-value businesses specialize in knowledge-intensive activities that involve steep barriers to entry (e.g., research and development, branding, marketing, logistics, and financing). As such, they tend to govern the GVC and reap the most profits. In contrast, low-value businesses specialize in labor-intensive activities that involve fewer barriers to entry and thin profit margins (e.g., raw material extraction, manufacturing, and assembly). In the case of semiconductors, for instance, American “fabless” designers capture 54 percent of the value added in the production process and make almost five times as much in revenue compared to Chinese businesses specializing in packaging, assembly, and testing.
Notably, the structure of GVCs tends to reinforce the distribution of power between states. For development reasons, dominant states like the United States typically have jurisdiction over high-value firms, whereas rising powers like China usually have jurisdiction over low-value firms. For instance, a handful of American chip designers—especially Intel, Nvidia, and Qualcomm—sell almost 50 percent of the world’s semiconductors. Chinese manufacturers buy nearly 60 percent of the global supply of semiconductors. As such, the United States has more regulatory opportunities than China to influence prices and product standards.
For this reason, dominant states can “weaponize” GVCs against rising powers by using export controls preventively to choke off their access to GVCs and slow their rise. The Trump administration realized this in 2019 when it added China’s most prominent electronics manufacturer, Huawei, as well as hundreds of its affiliates, to its “Entity List” of companies barred from purchasing semiconductors that rely on U.S. designs, software, equipment, and components, even if the products were manufactured outside the United States. The Biden administration has since expanded this policy to cover the sale of advanced semiconductors to the entire Chinese tech industry. The measures effectively cut China off from the GVC for semiconductors and the inputs necessary to develop its own advanced semiconductors.
Will the United States Succeed?
The United States is unlikely to win the tech war. There are two reasons for this conclusion.
First, the empirical record consistently shows that rising powers don’t sit idly by when dominant states disrupt their access to critical resources. Typically, they respond by subsidizing industrial development, pushing their businesses to upgrade into high-value positions to become self-sufficient. Chinese President Xi Jinping has urged the country to prioritize “self-reliance in science and technology” and described innovation in core technologies as the key to surviving “intense international competition.” To that end, the Chinese government has supported the development of an indigenous chipmaking industry: Guangzhou City invested $30 billion in initial funding, and Beijing has readied an additional $143 billion in subsidies and tax credits.
Second, the structure of GVCs makes it difficult for the dominant power to coerce the rising power without igniting business resistance at home and easier for the rising power to upgrade its industrial base in response. At the end of the day, businesses will prioritize their profits over national security. However, whether business incentives align with national security depends on a firm’s location in a GVC. In past instances of economic competition, high-value businesses typically resisted the dominant state’s policies to mitigate disruptions and recover lost profits. Low-value companies, by contrast, often collaborated with the rising state’s policies to reap the potential gains from industrial development.
For instance, American businesses have largely resisted U.S. sanctions against China. They continue to sell their designs, software, and equipment to China using legal loopholes, third parties, and dummy companies not on the Entity List. For example, American chip designer Nvidia developed a new advanced chip for Chinese customers that meets U.S. export control rules. Applied Materials Inc. allegedly sent chipmaking equipment to Chinese foundry Semiconductor Manufacturing International Corporation (SMIC) via third parties in South Korea. Some U.S.-based companies, like KLA Corporation, even have contingency plans to “de-Americanize” their operations in the event of more stringent sanctions.
The situation looks different across the Pacific. Chinese businesses have turned to Beijing for support in upgrading their technologies, including stockpiling equipment, building foundries, replacing proprietary data, and recruiting talent. For instance, the Shenzhen and Guangzhou investment funds helped Huawei create a self-sufficient chip network by pouring money into optical specialists, chip equipment developers, and materials manufacturers. Cash-flush start-ups and manufacturers like SMIC are successfully recruiting talent from South Korea, Taiwan, and the United States by offering massive salaries, stock options, and research funds.
As a result, Chinese businesses have achieved significant technological breakthroughs despite U.S. sanctions. Huawei remains, and the company has become mainly self-sufficient. The company stunned Washington last fall with a new 5G smartphone made with primarily Chinese parts and an advanced 7-millimeter chip manufactured by SMIC. Industry experts anticipate SMIC will be able to mass-produce these chips in the coming months, though the Biden administration remains skeptical. Some experts even expect the company to develop more powerful semiconductors. Chinese scientists are filing patents in record numbers to secure their position in the next generation of chipmaking.
U---China Innovation high---AI
Chinese AI innovation is surpassing American companies.
Martinez and Smith 24 (Susana, American politician and attorney 31st governor of New Mexico; Bradley A.

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