China’s ambitions to enter new markets and expand its presence globally were stoked with its admission to the World Trade Organization on Dec. 11, 2001, Dr. Lora Saalman said at the weekly luncheon of the Kiwanis Club of Atlanta, coincidently on Dec. 11 at the Loudermilk Conference Center downtown.
Billed as a routine address on “China-U.S. Trade and Tensions,” it turned out to be sort of a wake-up call to U.S. firms in a wide variety of economic sectors by a security expert who aside from being vice president of the New York-based EastWest Institute’s Asia-Pacific program also was the first American to earn a doctorate from the Department of International Relations at Tsinghua University in Beijing, having completed all her coursework in Chinese.
The Kiwanis Club of Atlanta has had a long-term relationship with the institute due to its member Joel H. Cowan being on its board of directors.
Dr. Saalman’s research is focused on China’s cyber, nuclear and advanced conventional weapons developments in relation to India, Russia and the United States and her grasp of the material provided her with a platform to cover a range of topics including the reach of China’s “Belt and Road” initiatives, U.S. and Chinese objectives in the Indo-Pacific region, China’s ambition to dominate digital cyber space, its advances in technologies in the areas of artificial intelligence, telecommunications, quantum computing and smart cities.
Her expertise ranged from describing at the luncheon STEM education in China as well as an overview of U.S. and Russian pursuit of hypersonic glide-related capabilities that can elude missile defenses and China’s efforts to catch up with the latest military technologies..
In addition to describing the expansion of the “Belt and Road” as an economic development initiative stretching into 65 countries, she said that China’s long-term planning considers the initiative’s objectives to include reaching not only across land, but also across seas, cyberspace and even into the Arctic.
“China seeks to dominate digital cyberspace,” she said, adding that “tech sectors are where the trade tensions will be felt.”
She was adamant that the U.S. needs to augment efforts to train coming generations in STEM and related skills, especially in targeted sectors to be able to compete in the future with the tens of thousands of Chinese children who are learning programming from kindergarten on. As an example, she cited China’s 2017 New Generation Artificial Intelligence Development Plan.
To keep up with China’s long-term planning objectives she pointed specifically to the following economic sectors that will feel its competitive onslaughts: information technology, numerical control tools and robotics, aerospace equipment, satellite technology, ocean engineering equipment and high-tech ships, railway equipment, energy saving and new energy vehicles, power equipment including smart grid and smart city technology, new materials, medicine and medical devices and agricultural machinery.
In addition, she cited the “China Standards 2035” report from China’s Standardization Administration, which seeks to set the technical standards for a wide range of industries making it creator of rulebooks to be followed by industries globally.
“China is poised to be the rule maker, not simply the rule taker or rule breaker,” she said in an email sent in response to questions she received from Global Atlanta upon returning to New York.
Her address anticipated by two days reports that China was preparing to tone down its “Made in China 2025” blueprint to make it a leader in high-tech industries, and in keeping with some of the benefits of what she termed the “push back” of the Trump administration on China’s ambitions and demands.
“I have come across a small but seemingly growing group of young professionals in China who argue that while painful in the short-run, U.S. tariffs and sanctions are likely to be healthy for the Chinese economy in the longer term,” she said in her email to Global Atlanta. (See below for her full statement on perceived benefits of Trump policies by young Chinese professionals.)
Throughout her address, she made it clear that China’s technological advances will shore up the abilities of authoritarian governments to retain control over their societies through “top-down” policies.
Dr. Saalman’s responses in full to Global Atlanta’s queries sparked by her address appear below.
1) Under ‘Made in China 2025,’ China has identified 10 sectors that are priorities for domestic innovation and market share. These categories, which are listed below, range across a number of fields that are increasingly coming into competition with U.S. industries. China’s ability to manufacture and innovate at lower costs, technical training of youth in such fields as coding, and long-term strategic vision position it to dominate technology-related sectors in the future.
While market access and the trade deficit remain important issues, the United States needs to place a greater emphasis on an implementable strategic roadmap that systematically works on training the next generation in STEM and related skills in targeted sectors. This needs to be at the state-level, as much as the federal. Among these focal points, China’s 2017 New Generation Artificial Intelligence Development Plan indicates that the U.S. needs to be thinking more broadly about AI applications and skill-sets and how these can be improved across the board in terms of early training and access of American youth.
- Information technology
- Numerical control tools and robotics
- Aerospace equipment, satellite technology
- Ocean engineering equipment and high-tech ships
- Railway equipment
- Energy saving and new energy vehicles
- Power equipment: Smart grid and smart city technology
- New materials
- Medicine and medical devices
- Agricultural machinery
2) “China Standards 2035” from China’s Standardization Administration builds upon its “Made in China 2025,” implementing technical standards across a range of industries. China is poised to be the rule maker, not simply the rule taker or rule breaker. As China reaches outwards along its Digital Silk Road, which is a technical off-shoot of its Belt and Road Initiative, it is building up the technical infrastructure of its neighbors throughout Central Asia, Southeast Asia, South Asia, Oceania, and Africa. From cross-border optical cables and energy grids to mobile networks and e-commerce, China is creating the foundations of infrastructure throughout the Indo-Pacific and beyond. This dependence on the Chinese IT backbone means that it will be able to set the standards throughout the region in terms of everything from energy supply to rail links to communication. For any number of authoritarian governments, China also provides a road-map to how to best control information flows and to engage in surveillance. Its likely dominance in designing smart cities of the future needs to be better understood. This is because China’s technical standards are much more far ranging than economic growth, they also point to fundamental shifts in governance and civil society.
3) The Chinese concept of cyber sovereignty is another arena in which it has played a fundamental role in shaping the direction of the flows of information and the Internet. Typified by China’s “Great Firewall,” cyber sovereignty posits that countries have the right to self-determination in cyberspace. As such, they have the impetus and right to monitor, access, and control the flow of data across their national systems and platforms. In doing so, they are able to block information flows that are viewed as being objectionable or as a threat to domestic integrity. This concept is crucial in that it is tied to the infrastructure building throughout China’s neighboring regions. The flat IT infrastructure that China is creating can be controlled from the top-down and allows for the concept of cyber sovereignty to be applied in practice among authoritarian governments. In essence, it sets a new standard for cyberspace.
4) While there is certainly no end of concern in China over the challenge posed by the Trump administration to Chinese trade and business practices, I have come across a small but seemingly growing group of young professionals in China who argue that while painful in the short-term, U.S. tariffs and sanctions are likely to be healthy for the Chinese economy in the longer term. On the one hand, controls on semiconductors and other technologies may undermine the business interests for some Chinese firms like ZTE. On the other hand, they are compelling faster movement on domestic innovation and the Made in China 2025 strategy. Further, they argue that U.S. tariffs may dislodge some of the vested interests and oligarchical tendencies of the upper echelon in China. In doing so, they open the opportunity for younger entrepreneurs to enter the market in China. While still not a mainstream view—since the leadership and upper echelon are those whose interests are currently threatened—it still indicates that China’s future economic structure may change a good deal in the coming years, due to external forces. These include everything from U.S. tariffs to China’s expanding partnerships along the Belt and Road as it winds its way throughout the globe.