5 reasons why China will rule tech, 2017 edition

China’s plans to lead in science and innovation

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China’s push to take over global technology leadership is relentless. It wants to lead in computing, semiconductors, research and development, and clean energy. It is accelerating science investment as the U.S. retreats.

China may be planning a moon base. Surprised? Don’t be. It will soon have a manned space station. It is investing heavily in quantum technologies and it wants to be first to build an exascale supercomputer.

In 2010, Computerworld looked at “Five reasons why China will rule tech.” Here's an update, and the case for China has grown stronger.

1. China’s big science ambitions include a moon base

In the 1950s, the U.S. considered establishing a 12-man Army base on the moon by 1965. The idea was too ambitious for the time and was dropped. Meanwhile, China has set its sights on a permanent lunar base.

Richard Fisher, a senior fellow of Asian military affairs at the International Assessment and Strategy Center, sees the possibility. “The Chinese will be using the moon for a range of military purposes, and thus it is necessary for the United States to go there.” He made the comment at a hearing last month of the U.S.-China Economic and Security Review Commission.

China intends to launch its first space station module, “Tianhe-1,” next year, with the goal of having a completely assembled space station in 2022.

A Chinese lunar base is a long way off. China has targeted 2036 for landing on the moon. But what these efforts illustrate is how China thinks big and long term. China has established a goal of becoming a global scientific power by 2050, according to a report prepared for the Economic and Security Review Commission in 2011.

President Donald Trump’s administration includes more funds for space exploration, but would do so only by cutting other science efforts at NASA. The space agency’s overall 2018 budget would be cut by about 1%.

But the moonbase is just one science effort by China out of many.

Another priority for China is quantum computing, particularly in cryptography.

“The U.S. remains at the forefront of quantum information science, but its lead has slipped considerably as other nations, China in particular, have allocated extensive funding to basic and applied research,” said John Costello, a senior analyst at Flashpoint, a cybersecurity firm, in testimony presented at a U.S.-China hearing on Thursday.

“Consequently, Chinese advances in quantum information science have the potential to surpass the United States,” Costello said.

2. China wants to win in high-performance computing

U.S. scientists -- including those at the National Security Agency -- believe China will soon lead the world in supercomputing.

“National security requires the best computing available, and loss of leadership in high performance computing (HPC) will severely compromise our national security,” wrote NSA and Energy Department scientists in a recent report.

China sees supercomputing as a race. It recently accelerated development of exascale systems and expects to produce a prototype as earlier as the end of this year, ahead of the U.S.

China has the world’s fastest supercomputer at about 125 petaflops built with its own chips. A petaflop system can perform one quadrillion arithmetic operations per second. An exascale system is 1,000 petaflops, and China is on track to produce a system well before the U.S.

Trump’s proposed 2018 budget may cut funding for U.S. supercomputer development.

3. China is attacking U.S. semiconductor dominance

For all its investment and advances, China is at least one and a half generations behind state-of-the-art semiconductors, according to a White House report released in January by President Barack Obama, just days before Trump took office. It was written with industry cooperation.

The report provides insights into criticisms that Trump leveled at China over trade practices. In its push to be first, China isn’t playing fair, the report states.

To help boost its industry, the report claimed that the Chinese government subsidizes semiconductor production, which can lower product cost and threaten direct competitors. It also “places conditions on access to its market” to drive domestic production and “technology transfer” -- requiring foreign firms -- if they want access to China’s market -- to share their technology. Theft is another means of acquiring technology, the report says.

“In 2014, the Chinese Government announced that it would spend $150 billion to expand the share of Chinese-made integrated circuits in its market from 9 percent to 70 percent by 2025,” said former U.S. Commerce Secretary Penny Pritzker, in a speech last November. “To put that figure into perspective, $150 billion is roughly half of all worldwide semiconductor sales last year,” she said.

The Trump administration supports a hardline on China and its semiconductors activities. But Trump may differ from Obama in one key area.

Part of the Obama administration counterattack to the China semiconductor advances was to recommend a series of “moonshots” -- projects to accelerate U.S. innovation.

One moonshot called for advances in “modeling and simulation” development -- a product of supercomputing development. But if Trump cuts supercomputing investment, it may help China advance its semiconductor agenda.

4. China plans to exceed the U.S. in R&D

China’s investment in R&D is rising so rapidly that the country is expected to surpass the U.S. in overall spending by 2020. This doesn’t necessarily mean that China is doing a better job at innovation. Other measures, such as patents registered in multiple countries, continue to point to the U.S. as the innovation leader.

Nonetheless, China’s R&D investment growth was called “remarkable” last year by the National Science Foundation. “Between 2003 and 2013, China ramped up its R&D investments at an average of 19.5 percent annually, greatly exceeding that of the U.S.” the NSF reported.

China’s innovation ambitions include leading the world on clean energy. It invested nearly $103 billion in renewables in 2015, up 17% over 2014. The “U.S. is in second place, but well behind, at $44 billion,” according to a recent report by the Institute for Energy Economics and Financial Analysis. The Trump budget would cut this investment.

5. China’s leadership is focused on science

During the campaign, Trump said he supported investment in science, but his proposed 2018 budget cuts science spending.

The cuts are so deep they “threaten our nation’s ability to advance cures for disease, maintain our technological leadership, ensure a more prosperous energy future, and train the next generation of scientists and innovators to address the complex challenges we face today and in the future,” said Rush Holt, the CEO of the American Association for the Advancement of Science.

Silicon Valley leaders warned before Trump took office that he would be a "disaster for innovation."

Trump may be hoping that deregulation, tax cuts and other private sector incentives will spur innovation. But the government has always played a role in basic science research and big science projects, such as exascale computers, that are too expensive for the private sector.

China’s investment in science is not a given and economic forces could derail its plans. But for now, this country sees science investment as critical to long-term prosperity.

“Innovation is the primary force guiding development,” said Xi Jinping, the president of the People’s Republic of China, in January at the World Economic Forum in Davos, Switzerland. “We need to relentlessly pursue innovation,” Xi said.

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