Welcome to a/symmetric, our weekly newsletter. Each week, we bring you news and analysis on the global industrial contest, where production is power and competition is (often) asymmetric.
- Headlines dub chips, AI, and supercomputing the “latest fronts” in the US-China contest. But does it make sense to think of technologies as discrete points of contention when China takes a whole-of-industrial-chain approach to competition?
- Weekly Links Round-Up: China buys an Italian logistics firm, Boeing’s China headache, the rise and fall of US machine tools
How many fronts are there in the US-China competition?
If headlines are anything to go by, there are seemingly endless fronts. In no particular order:
That is a lot of fronts! Quite aside from the feasibility of keeping track of them all, there’s also the question of whether the “latest front” framing is well suited for thinking about the US-China contest.
Does it really make sense to think of technologies like EVs, AI, and chips as discrete points of contention when China takes a whole-of-industrial-chain approach to competition?
There are, I would argue, two main weaknesses to the “latest front” framing.
First, it presents the technology in question in a vacuum, almost implying that it has suddenly and unpredictably emerged as a new competitive front.
But in many cases, a closer look at Chinese industrial programs—both high-level and more granular ones—offers a roadmap of China’s technological ambitions and priorities. “Newest fronts” would likely not look so new once they are situated in the broader sweep of Chinese industrial strategy, which both lays out goals on a years-long basis and indicates where resources are being directed.
Second, and relatedly, it encourages thinking about the said technology in isolation, removed from the rest of the industrial chain of which it is part.
Take drones. This week, the US Cybersecurity and Infrastructure Security Agency and FBI warned of the “significant risks” posed by Chinese-made unmanned aircraft systems to US national security.
But manufacturers like DJI and Autel are only the most visible manifestations of the Chinese drone threat. Further up the supply chain are batteries, metal and composite parts, lidar sensors, and cameras—technologies where China also dominates. An American-made drone reliant on China for those critical inputs would present its own set of risks.
There’s also the question of whether, once a “latest front” is identified, anything is actually done about it.
Consider batteries. The critical minerals key to their production are consistently referred to as the “new front” in the global tech contest. But it’s one thing to mine and process minerals, another to innovate on different chemistries, and still another to scale and deploy battery technologies.
Ultimately, the sweepstakes are won not by those who dig up the most lithium or invent lithium-ion-phosphate, but by whoever can latch onto an incipient technology, rapidly commercialize it, and then integrate it with the rest of their existing supply chains to compound newly gained leverage.
China has proven adept at this. As Steve Levine writes in The Electric this week about China’s dominance in sodium-ion batteries:
The surprising speed at which Chinese companies then took sodium-ion batteries from lab to commercialization has again demonstrated why the Chinese battery industry is so far ahead of the West’s. While Western companies ponder, tinker and test, Chinese companies have a pattern of moving rapidly from research and development to full-scale production, more willing than their Western counterparts to risk failure.
Levine quotes Christopher Johnson, a senior scientist at Argonne National Laboratory who co-invented nickel-manganese-cobalt batteries (only to see it languish commercially in the US), and who in 2014 had his work on a sodium-ion battery patented—only to see China take the lead:
But Johnson feels the US is again surrendering this early technological advantage with sodium-ion, the chemistry that has the best chance of competing with lithium. “It’s some shortsighted attitude from the manufacturing base in the US that’s created this wacky way of doing business,” Johnson said. [emphasis added]
Rather than focusing on the “latest front,” it may yield a fuller picture of the competitive landscape to look at how any given technology fits within Chinese industrial policy’s broader goal of developing leverage over international supply chains.
An oft-quoted maxim among Chinese academics and industry players (links in Chinese) is that today’s global commercial competition is not being waged between enterprises, but between entire supply chains. That means any strategy worth a fighting chance must take a supply chain-level approach to industrial competition.
🖇️ COSCO goes shopping in Italy. The Chinese state-owned shipping giant acquired an international, Italy-headquartered integrated logistics company. Rome may have ditched the Belt and Road Initiative, but Beijing is still making strategic inroads into Italy. (Decode39)
🖇️ Boeing’s China headache. The embattled aircraft maker is facing new delays in its delivery resumption of 737 MAX jets to China, as it conducts additional inspections of aircraft following the Alaska Airlines door blowout. As the Wall Street Journal notes, paraphrasing Richard Aboulafia of AeroDynamic Advisory: “jetliners are among the few levers China can pull in response to the US trade restrictions on exporting semiconductors to China.” (WSJ)
🖇️ The rise and fall of the US machine tool industry. Brian Potter has a detailed piece on the history of America’s machine tool makers. His discussion of Japan’s focus, from circa 1960s, on “simpler, cheaper [numerical control] machines based on standardized designs, aimed at the large, untapped lower end of the market that previously couldn’t justify the cost of an expensive NC machine” holds close parallels to China’s approach to industrial competition. There’s also a lot to be said about China’s machine tool industry—we’ll get to that one of these weeks. (Construction Physics)
(Photo by cottonbro studio/Pexels)