Published: 10:33, August 21, 2023 | Updated: 10:54, August 21, 2023
Sinophobic de-risking unlikely to derail China’s renaissance
By Andrew KP Leung

On Aug 9, citing a national security risk, US President Joe Biden signed an executive order banning a range of American high-tech investments in China, largely in semiconductors, microelectronics, quantum tech and artificial intelligence. The executive order is expected to be implemented next year, subject to drawing up relevant regulations and rounds of public comment.

Most transactions will require prior notification instead of outright prohibition, with certain exemptions expected, including publicly traded instruments and intracompany transfers, as reported by the media. 

Nevertheless, this is no doubt a further screw-tightening in an all-out anti-China strategy, such is America’s bipartisan paranoia about the perceived “China threat” to its hegemonic interests.

Andrew Small’s The Rupture: China and the Global Race for the Future (London, 2022) tells the inside story of how Western politicians, thinkers, and business leaders have become Beijing’s sharpest opponents over recent years, galvanized by Western narratives of the COVID-19 pandemic and China’s 5G advances. 

Bethany Allen’s Beijing Rules: China’s Quest for Global Influence (London, 2023) is a blow-by-blow account of what the West sees as China’s “covert” methods of “coercion” to gain influence and control narratives, including “weaponization” of market access, supply chains, and telecommunication technologies. 

With a different civilization, ideology and race, China’s rapid rise through a distinctive development model with unique characteristics is running into a hornets’ nest of Western pride, prejudice, fear and suspicion, eliciting responses that show a total disregard for rights and wrongs. To a nervous mind, every curve looks like a snake, as the Chinese saying goes. 

When President Xi Jinping bid farewell to President Putin at the Kremlin in March, he repeated earlier warnings of a new era of challenges or “changes not seen for 100 years”. 

In a think-piece dated Oct 30, 2017, Professor Yanzhong Huang, a senior fellow at the US Council on Foreign Relations, flagged up China’s perceived “Four Traps” before becoming a world leading power: the “Middle-Income Trap” of economic stagnation, the “Tacitus Trap” of winning credibility, which President Xi used in 2015 to warn cadres; the “Thucydides Trap” of war-threatening great-power rivalry; and the “Kindleberger Trap” of a failure of maintaining international order. 

These four “Traps” appear alive as China grapples with a world economy disrupted by a protracted war in Ukraine, weakening exports and domestic consumption, massive youth unemployment, heavy local government debt, housing sector tremors, and worsening demographics. 

These dark clouds mask China’s resilience as the largest trading partner with most of the world’s nations, its solid head start in critical 21st-century technologies; its faster-than-expected embrace of a greener, more sustainable future, and the nation’s confidence to press ahead with the China Dream of national renaissance. 

As reported in The Economist of Aug 4, the West’s de-risking strategy toward China will fail, says Chris Miller, author of the award-wining book Chip War: The Fight for the World’s Most Critical Technology (UK, 2023). China’s massive supply chain network is extensive, deep and robust enough to withstand the West’s calibrated shocks; foreign entrepreneurs know how to sing the “de-risking” hymnbook; and China has long built up self-reliance in most key technologies. 

A report issued by the Australian Strategic Policy Institute (ASPI) on March 1, found that China is leading in 37 of 44 critical technologies, often producing more than five times as much high-impact research as its closest competitor, the United States. The ASPI study is based on an analysis of the top 10 percent of the most-cited works between 2018 and 2022 — a total of 2.2 million papers.

China dominates in all subsectors in advanced materials and manufacturing; energy and environment; and photonic sensing, timing and navigation; with a substantial lead in all other categories, comprising AI, computing and communications; quantum computing, cryptography, communications and sensors; biotechnology, gene technology and vaccines; defense, space, robotics, and transportation.

All these technologies are at the forefront of the Fourth and Fifth Industrial Revolutions, set to redefine how people live, how businesses are conducted, and how national powers are measured in the 21st century.

High-end nano-semiconductor chips excepted, China’s technological dominance is perhaps not surprising. Since the mid-2000s, China has consistently been producing more STEM (science, technology, engineering, and math) doctorates than the US. By 2025, Chinese universities will be producing more than 77,000 STEM doctorates per year compared with approximately 40,000 in the US. Excluding international students, Chinese STEM PhD graduates will shortly outnumber their US counterparts more than 3-1, according to Georgetown University’s Center for Security and Emerging Technology.

According to Reuters, the International Energy Agency has brought forward forecasts of China’s peak gasoline demand by about a year to 2024. In January to May, electric vehicles (EV)’s share in China, the world’s-largest car market, jumped to 28 percent, up from 9 percent in the same period of 2021, while the share for petrol cars shrank to 72 percent from 91 percent. Monthly EV car sales hit 588,000 units in the first five months this year, 212 percent higher than the previous year. China is now looking to spur EV adoption in rural areas by improving charging infrastructure and encouraging banks, local governments and auto makers to offer support. 

According to a report issued on Oct 26, 2022 by Harvard University’s Fairbank Center for Chinese Studies, China is winning the race for clean energy technology. Leading the world in renewable energy production, it is the world’s-largest producer of wind and solar energy, as well as the largest domestic and outbound investor in renewable energy. Massive coal reliance notwithstanding, the nation is well-placed to fulfill its pledge of carbon neutrality by 2060. 

Despite worsening headwinds, China is pressing ahead with realizing the China Dream. 

According to Paris-based market research company Ipsos’ Global Happiness Index 2023 (March), considering overall life satisfaction including ups and downs, China tops the world at 91 percent, compared with the Netherlands’ 85 percent, Australia’s 80 percent, the US’ 76 percent and Great Britain’s 70 percent. 

In its 2023 Global Report, New York-based communications firm Edelman Trust Barometer, China also tops the Trust Index of 27 nations (covering NGOs, business, government and media) both for high and low-income population segments. 

These findings support Harvard Kennedy School Ash Center’s July 2020 Report “Understanding CCP Resilience”, which finds that Chinese citizens’ satisfaction with their government has been consistent since the first survey in 2003. 

In an official Qiushi Journal article published on Aug 15, President Xi stressed that China’s unique model of modernization is its highway to building a strong nation and national renaissance. 

This is characterized by practical and steady progress to take account of China’s massive and diverse population; high-quality common prosperity to reduce acute inequalities; synergy between material and spiritual progress; symbiosis between human and ecological development; and building a better world of peace, development, cooperation and mutual benefit. 

Among the West’s double standards, bigotry, suspicion, hubris, confrontation and winner-takes-all mentality, President Xi provides a clarion call to inclusiveness, empathy, and cooperation in building a more peaceful, sustainable and prosperous world. 

The author is an international independent China strategist, and was previously the director-general of social welfare and Hong Kong’s official chief representative for the United Kingdom, Eastern Europe, Russia, Norway and Switzerland.

The views do not necessarily reflect those of China Daily.