pjmedia.com
Not since Chiang Kai-Shek blew up the Yellow River dikes at Zhengzhou in 1938 to slow the advancing Japanese has a major nation inflicted as much damage on itself to hurt an adversary as Washington did in its last round of high-tech export curbs on China. Millions died in the ensuing flood and famine. It didn’t help Chiang, and it won’t help the United States, where semiconductor R&D and capital expenditures will shrivel. Unmitigated panic has taken hold of American policymakers, and the outcome will not be good. Scott Foster detailed the damage to the revenues of America’s semiconductor equipment and design industries in Asia Times on Oct. 17.
For years, the U.S. establishment scoffed at China’s technological ambitions. Now it’s ready to damage America’s high-tech industry in the hope of hurting China even more. This Jekyll-to-Hyde metamorphosis of America’s elite has nothing to do with China’s military expansion, the vulnerability of Taiwan, the nasty treatment of China’s Uyghur minority, or the suppression of dissidents in Hong Kong. It’s about elite privilege and money. After the Cold War, the American elite-built wealth beyond the dreams of avarice out of the digital economy that America first created to defeat the Soviet Union. Now China threatens to dominate the Fourth Industrial Revolution.
The problem isn’t that China is advancing. It’s that we’re stuck in the mud. To win the Cold War, the federal government spent about 1% of GDP on the development part of R&D, the equivalent of $320 billion a year in current dollars. That gave us computer chips, lasers, optical networks, flat displays, the Internet, and everything else that went into the modern age. The Biden Administration offers $38 billion in subsidies to chipmakers over five years. We’re off by a zero. We put our top talent into social media, not the frontier of physics.
It seems like China is the only thing that both parties agree about. Count me out of the one-upmanship in China-bashing. If we want to stay ahead of China, we need to put our own house in order. Last year I told the Chinese website Observer: “I want China to be prosperous, secure, and a step behind the United States.”
