Center for American Progress

Technology Competition: A Progressive, Principled, and Pragmatic Approach Toward China

Technology Competition: A Progressive, Principled, and Pragmatic Approach Toward China

Technology competition is central to the U.S.-China relationship and has both national security and economic dimensions.

People tour a lab at an info session for MassBio's Bioversity, a new biotech training program to expand workforce training, in Boston on September 26, 2023. (Getty/Erin Clark)

See other chapters in CAP’s Report: A Progressive, Principled, and Pragmatic Approach Toward China Policy

Technology Competition: A Progressive, Principled, and Pragmatic Approach Toward China

CAP China Working Group on Technology

As the United States competes with China for technology leadership, we must make transformational domestic investments in key technologies and workforce, install proportionate guardrails to protect our national security and current technological edge, and work with partners to set rules that are consistent with our shared democratic values.

Key assessments and recommendations

  • As the United States competes with China for tech leadership, we must play both offense and defense. On offense, we need to make transformational domestic investments in key technologies and our tech workforce.
  • On defense, we need proportionate guardrails to protect U.S. national security and current advantages in critical technologies. As defensive tools such as export controls play a larger role in managing technology competition with China, the United States will need the personnel and other resources to enforce these policies effectively.
  • The United States needs a strong domestic data protection regime and must work with international partners to set rules for the digital economy consistent with democratic values.

Context: U.S.-China technology race: The economic and security imperatives

Technology competition is central to the U.S.-China relationship and has both national security and economic dimensions. Technologies such as semiconductors and artificial intelligence have the potential to accelerate China’s already rapid military modernization and will also drive growth in an increasingly digitized world. The digital economy in the United States accounted for about 10 percent of GDP in 2022, employs approximately 8 million Americans, and is growing far faster than the economy as a whole. While we lead the world in many critical technologies, Chinese companies are increasingly competitive—and in some cases exceed U.S. capacity—in sectors such as clean energy, telecommunications, legacy chips, internet, and e-commerce and payments.

The role of Congress

Congress can set a strategic vision for U.S. technology leadership that invests at home and advances U.S. global leadership in technology development, use, and trade. Congress should adequately fund agencies responsible for advancing U.S. technology leadership and managing competition with China. It should also use its oversight power to ensure executive branch policies, such as export controls, do not cause undue harm to long-term U.S. competitiveness and that U.S. strategy is based on cooperation with allies and partners. The lack of federal data security and privacy law means the European Union and individual U.S. states, primarily California, now set global rules for U.S. tech companies.

Investing in U.S. technology leadership

U.S. technology leadership begins at home. We should continue to invest in critical and emerging technology areas (as we did with the internet and GPS), which create high-paying American jobs. We should enhance supply chain resiliency for critical goods—for which we need uninterrupted supply—by capitalizing on our existing strengths, including our unique innovation ecosystem and drawing on successes and lessons of the CHIPS and Science Act and Inflation Reduction Act (IRA). Clean energy and chips have been the focus of investments to date; we need similar R&D investments in biotech; public AI infrastructure (i.e., computational, data, software, model, and training resources available to the public); and quantum technologies.

Building a technology workforce

A skilled workforce is essential to U.S. leadership, but we suffer from chronic shortages of workers prepared for technology careers. U.S. STEM scores consistently rank far below those of other advanced democracies. Our priority must be to invest in education at all levels, including training and registered apprenticeship programs; partnering with industry to develop specific critical skills; and building stronger education-industry pipelines in critical sectors. We also need to modernize our immigration system so we can continue to attract highly skilled workers and retain those educated here to grow our economy instead of sending their talents overseas to compete with us.

Protecting U.S. technologies

The United States leads in “force multiplier” fields such as semiconductors, AI, and quantum information systems that give us an edge in other critical technologies as well. U.S. policy is to maintain as large a lead as possible in these technologies, given the difficulty in distinguishing between their civilian and military applications. The corollary concern is that any advance of China’s capabilities in these areas is a de facto national security threat even if they may also have commercial benefits. The new approach has been seen most notably in the administration’s effort to freeze China’s advances in chips, AI, and supercomputing. These measures can only delay China’s advances—for example, see Huawei’s release of a phone using an advanced chip produced by a Chinese chip manufacturer. We need to support U.S. research in these areas to maintain our lead.

Improving defensive tools, such as export controls, will not help if we do not have the personnel and systems to implement them. Congress needs to boost U.S. export control capabilities. The budget for the Commerce Department’s Bureau of Industry and Security, which administers export controls, has remained flat in real terms for over a decade, even as the export control workload has boomed in response to China’s rise and Russia’s invasion of Ukraine.

The United States cannot—and should not try to—degrade Chinese capacity in less advanced technologies. Doing so would alienate us from international partners, whose cooperation we need to meet the China challenge and would have minimal effect on Chinese capabilities. Instead, for lagging technologies such as legacy chips, we will need policies to ensure that we do not let those products enter into sensitive applications in the U.S. market (i.e., in critical infrastructure) and that we have a secure, diversified source of supply from other producers.

Creating a high-standard regulatory environment

Global technology leadership will require smart, nimble regulatory frameworks, in addition to private sector innovation and public sector investments. The United States has had an overly permissive approach to technology regulation, even as the wide range of harms of the internet-based economy have become evident, from data (in)security; (the lack of) data privacy; (minimal) online safety; harmful impacts on civil rights, workers and economic concentration; and widespread misinformation and disinformation. CAP outlines a roadmap for Congress to address these well-known issues and create a regulatory framework that can nimbly address concerns from generative AI or other online services.

While TikTok has dominated the data security debate, restricting one foreign-owned social media app in the U.S. market is insufficient to address broader concerns over foreign-owned apps or general abuses from digital platforms. Among other things, the United States needs comprehensive frameworks for data privacy to let individuals control how their data is collected and used; data security to prevent adversary actors from exploiting bulk data; and adequate tools and policies to identify malign content manipulation and determine how best to respond. A February 2024 executive order (EO) proposed the first-ever limits on the collection and sale of bulk amounts of sensitive personal data on U.S. persons to countries of concern (e.g., China). Although a step in the right direction, the EO does not affect privacy outside of its narrow construction and is not a substitute for data privacy legislation or regulation. Congress should codify the EO and address data privacy issues.

The United States should lead in setting rules of the road for the digital economy, including cross-border trade in digital goods and services. Digital trade agreements are an opportunity to set global digital trade rules that are consistent with U.S. interests and values and that advance core progressive issues such as online safety and consumer protection. A U.S. digital trade strategy should balance the economic benefits of open data flows with the need for data security.

AI safety and stability

Frontier AI systems, such as ChatGPT, are increasingly able to mimic certain aspects of human cognition. While the transformative potential of these systems may lead to innovation across the technology landscape, they already show potential for harm across a range of areas such as democracy and election administration, civil rights, and labor protections. Mitigating such risks requires cooperation from governments across the world. The United States and China are far and away the leaders in AI research, and we need to work together bilaterally and multilaterally. One concrete opportunity would be to build off of the work begun with the 2023 Bletchley Declaration by Countries Attending the AI Safety Summit—to develop norms to address the harms already emerging from the use of these systems and to avoid catastrophic risk. CAP recommends numerous policy solutions to harness AI’s societal benefits while simultaneously mitigating its risks.

Clean energy technologies

Ambitious investments in clean energy tech and manufacturing are essential to balancing derisking and the urgent need for climate action. We should continue to strive to maintain a diversity of clean energy sources, transition quickly to U.S. or friendly sources of supply, and avoid creating a new dependency on China.  But meeting our climate transition goal will require using some Chinese clean energy technologies in the U.S. domestic market, at least in the near term. However, we should not accept Chinese technologies when doing so would endanger national security or the domestic economy. We also must remain focused on addressing nonmarket practices that lead to oversupply of Chinese clean energy technologies.


Breakthroughs in gene sequencing, biological engineering, and more could soon transform everything from medicine and manufacturing to the food, fuel, and fibers we use every day. Securing U.S. biotechnology leadership requires a systemic approach, including robust public and private investment to scale a domestic biomanufacturing base, streamlined regulation from the Departments of Agriculture, Health and Human Services, and the Food and Drug Administration, and reforms to allow researchers and innovators to better tap U.S. biodata while protecting privacy and civil rights. The United States should also seek to lead the international debate about ethical biotechnology development and applications.

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CAP China Working Group on Technology


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