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IF the U.S. is serious about meeting the challenge from China, it should really be focused on is science and technology.
A new report out this week by the National Security Commission on Artificial Intelligence, chaired by former Google chairman (and New Economy Forum delegate) Eric Schmidt , should be a wake-up call to anybody who believes that a trade deal will level the playing field between the U.S. and China. The competition has only just begun.
And in the domain of artificial intelligence, the digital wellspring of America’s future prosperity and national security, China is winning.
Consider these findings from the report:
  • From 1991 to 2015, China’s spending on AI increased 30 times while U.S. outlays grew only marginally. A decade from now, China will outspend the U.S. in absolute terms.
  • America’s leadership in AI research is shrinking. Next year, Chinese scientists will overtake Americans in the most-cited 10% of AI academic papers.
  • The global reach and sophistication of China’s AI giants, including Baidu, Alibaba and Tencent, may soon overtake their American counterparts, giving China even more data to dominate the technology.
To be clear, America still dominates the field; U.S. universities train the top AI minds. But the U.S. is throwing away the key sources of its advantage. “We are beginning to see troublesome signs that America’s ability to attract and keep the top global talent may be weakening,” the report says.
Restricting visas for Chinese scientists is an extraordinary folly, as is a desire among China hawks in Washington for a broad technological decoupling, which will rob U.S. tech companies of the revenues they need to fund research and stay ahead.
The core issue here is the collapse of trust between the U.S. and China. But as the report notes, that shouldn’t prevent them from collaborating on AI applications that are manifestly good for humanity, such as disaster relief or finding a cure for cancer. As it happens, the New Economy Forum in Beijing later this month will launch an initiative along these lines. 
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“Co-opetition” or confrontation?

An op-ed by the prominent Chinese politician and diplomat Fu Ying, also a New Economy Forum delegate, proposes three scenarios for U.S.-China relations. First: “co-opetition,” a mix of cooperation and benign competition. Second: full confrontation. Third: drift.
Notably absent from Fu’s analysis is any recognition whatsoever that China may be partly to blame for the plunge in U.S.-China ties. According to this line of thinking, China pursues peace, America wages wars; China seeks global partnerships, America chases hegemony.
A similar tone imbued a key Communist party meeting that wrapped up last week. One of its main messages was that, while China is committed to opening its markets wider to foreign companies, President Xi Jinping intends to double down on state control. His plans for a “new national system for making breakthroughs in core technologies under socialist market economy conditions” sound a lot like the old Made in China 2025 blueprint for Chinese technological supremacy.
Trump’s proposed mini-trade deal won’t affect the trajectory of Chinese industrial policy one bit. Between “co-opetition,” confrontation and drift, we should be hoping for the first outcome, but preparing for the second.

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