Show an ad over header. AMP

Former Google CEO and others call for U.S.-China tech "bifurcation"

A new set of proposals by a group of influential D.C. insiders and tech industry practitioners calling for a degree of "bifurcation" in the U.S. and Chinese tech sectors is circulating in the Biden administration. Axios has obtained a copy.

Why it matters: The idea of "decoupling" certain sectors of the U.S. and Chinese economies felt radical three years ago, when Trump's trade war brought the term into common parlance. But now the strategy has growing bipartisan and even industry support.


The report, called "Asymmetric Competition: A Strategy for China & Technology," was written by an informal working group formed last summer with 15 participants, including:

  • Eric Schmidt, former CEO of Google and technical adviser at Alphabet. (Google exited China in 2010 while Schmidt was CEO).
  • Jared Cohen, CEO of Jigsaw, a tech incubator created by Google, and former adviser to Condoleezza Rice and Hillary Clinton.
  • Richard Fontaine, the CEO of the Center for a New American Security, whose co-founder Kurt Campbell now occupies a top position on Biden's National Security Council.
  • Liz Economy, China scholar at the Council on Foreign Relations and Stanford University's Hoover Institution.
  • Alexandr Wang, CEO and founder at Scale AI.
  • Marissa Giustina, a quantum electronic engineer at Google.

What they're saying: "America’s technological leadership is fundamental to its security, prosperity, and democratic way of life. But this vital advantage is now at risk, with China surging to overtake the United States in critical areas," the authors write.

  • The report "advances policies that position the United States to out-compete China without inviting escalatory cycles of confrontation, retaliation, or unintended conflict."

The nature of the challenge, according to the report:

  • The competition is "asymmetric," meaning "China plays by a different set of rules that allow it to benefit from corporate espionage, illiberal surveillance, and a blurry line between its public and private sector."
  • We're heading towards somewhat tech spheres. "Some degree of disentangling is both inevitable and preferable," the authors write. "In fact, trends in both countries — and many of the tools at our disposal — inherently and necessarily push toward some degree of bifurcation." That's because the alternative to bifurcation is a world in which China's non-democratic norms have "won."
  • There will be trade-offs, such as between "creating risk-tolerant research environments that encourage innovation versus security/espionage risks."

Their proposed solutions:

  • The creation of a national tech analysis and forecasting center.
  • Building more resilient supply chains by investing in domestic infrastructure and "ally-centric production."
  • Improving education and reducing immigration bottlenecks to ensure a strong supply of highly skilled labor.
  • A government redesign across the executive branch to guide a "new era of technological statecraft."
  • New multilateral initiatives, including an alliance of democracies called the "T-12" to coordinate responses to tech competition, an "International Technology Finance Corporation," and the creation of "multilateral trust zones" where integration can be safely achieved.

What to watch: Whether or not the proposal gets traction in the Biden administration, its emphasis on multilateralism fits with the administration's goals and priorities.

Go deeper:

How the tech stock selloff is hurting average Americans

Data: FactSet; Chart: Axios Visuals

Investors holding the ultra-popular Nasdaq 100 and S&P 500 index funds have been hard hit over the last two weeks as tech shares have been roiled by rising U.S. Treasury yields.

Why it matters: Even though the economy is growing and many U.S. stocks are performing well, most investors are seeing their wealth decline because major indexes no longer reflect the overall economy or even a broad swath of public companies — they reflect the performance of a few of the country's biggest companies.

Keep reading... Show less

UN human rights chief: At least 54 killed, over 1,700 detained since Myanmar coup

Police and military officers in Myanmar have killed at least 54 people during anti-coup protests, while "arbitrarily" detaining over 1,700 people, United Nations Human Rights Commissioner Michelle Bachelet said Thursday.

Why it matters: Protesters have demonstrating across Myanmar for nearly a month, demanding the restoration of democracy after the country's military leaders overthrew its democratically elected government on Feb. 1.

Keep reading... Show less

The U.S. may be setting itself up for a fourth coronavirus wave

Data: The COVID Tracking Project, state health departments; Note: Anomalous Arkansas case data from Feb. 28 was not included in the calculated change; Map: Andrew Witherspoon/Axios

The U.S. may be on the verge of another surge in coronavirus cases, despite weeks of good news.

The big picture: Nationwide, progress against the virus has stalled. And some states are ditching their most important public safety measures even as their outbreaks are getting worse.

Keep reading... Show less

Sidewalk robots get legal rights as "pedestrians"

As small robots proliferate on sidewalks and city streets, so does legislation that grants them generous access rights and even classifies them, in the case of Pennsylvania, as "pedestrians."

Why it matters: Fears of a dystopian urban world where people dodge heavy, fast-moving droids are colliding with the aims of robot developers large and small — including Amazon and FedEx — to deploy delivery fleets.

Keep reading... Show less

The biggest obstacle to a wealth tax

Taxing the rich is an idea that's back. An "ultra-millionaire tax" introduced by Elizabeth Warren and other left-wing Democrats this week would raise more than $3 trillion over 10 years, they say, while making the tax system as a whole more fair.

Why it matters: New taxes would be a necessary part of any Democratic plan to redistribute wealth and reduce inequality. But President Biden has more urgent priorities — and Warren's wealth tax in particular faces constitutional obstacles that make it a hard sell.

Keep reading... Show less

House passes For the People Act to expand voting rights

The House voted 220-210Wednesday to pass Democrats' expansive election and anti-corruption bill.

Why it matters: Expanding voting access has been a top priority for Democrats for years, but the House passage of the For the People Act (H.R. 1) comes as states across the country consider legislation to rollback voting access in the aftermath of former President Trump's loss.

Keep reading... Show less

House passes George Floyd Justice in Policing Act

The House voted 220-212onWednesday evening to pass a policing bill named for George Floyd, the Black man whose death in Minneapolis last year led to nationwide protests against police brutality and racial injustice.

Why it matters: The legislation overhauls qualified immunity for police officers, bans chokeholds at the federal level, prohibits no-knock warrants in federal drug cases and outlaws racial profiling.

Keep reading... Show less

Republicans are demanding a full 600-page reading of Biden’s COVID relief bill

Republicans are demanding a full, 600-page bill reading — and painful, multi-hour "vote-a-rama" — as Democrats forge ahead with their plan to pass President Biden's $1.9 trillion COVID-19 relief package.

Why it matters: The procedural war is aimed at forcing Democrats to defend several parts the GOP considers unnecessary and partisan. While the process won't substantially impact the final version of the mammoth bill, it'll provide plenty of ammunition for future campaign messaging.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories