The strategic policy “Made in China 2025” aims to make China the world’s AI innovation center by 2030. In addition to AI, China hopes to overtake the United States to lead the world in biotechnology, robotics and 5G (fifth-generation wireless technologies). In an October speech, U.S. Vice President Mike Pence attacked the Chinese policy, claiming that “the Communist Party has set its sights on controlling 90 percent of the world’s most advanced industries, including robotics, biotechnology and artificial intelligence. To win the commanding heights of the 21st-century economy, Beijing has directed its bureaucrats and businesses to obtain American intellectual property — the foundation of our economic leadership — by any means necessary.”

Moreover, Pence claimed that China is pursuing a “military-civil fusion” by “sponsoring the acquisition of American firms to gain ownership of their creations. Worst of all, Chinese security agencies have masterminded the wholesale theft of American technology — including cutting-edge military blueprints.” In other words, China is rapidly increasing its military strength by integrating civilian and military technologies. At present, the most pressing issue China wants to address through this AI revolution within its military is the integration of artificial intelligence and drone systems (both aircraft and submarines) to restrict the mobilization of U.S. aircraft carriers.

Meanwhile, an investigation by the Australian Strategic Policy Institute found that over the past decade, the People’s Liberation Army has sent approximately 2,500 PLA-affiliated scientists and engineers — primarily AI specialists — to study at Western universities, while obscuring their true identities. The Pentagon established a Defense Innovation Unit (DIU) in Silicon Valley to invest in AI and other “disruptive technology” startups, only to discover that China had already invested in the most promising companies.

In this game of leapfrog with the U.S., China’s tactic is, to quote a high-ranking PLA official, one of “overtaking on the curve.” The only way to overtake the leading car in a race is to accelerate and outdrive it on a fast curve. Institutions such as Tsinghua University and businesses like Baidu Inc. are the drivers of China’s “military-civilian fusion.” After all, there is no “public” or “private” within the Chinese political system. Companies like Alibaba and Tencent have no choice but to accept the creation of Communist Party cells within their organization.

Moreover, the essence of China’s strategy for competition is to protect Chinese companies by excluding foreign competitors. In order to strengthen social surveillance and political control, the party and government avail themselves of the big data accumulated by companies like Alibaba and Baidu, and provide these companies with government-maintained data on private citizens in return.

In the same October address, Pence said the U.S. should respond to China’s “whole of government approach” with one of its own: In other words, the U.S. should prepare for competition with China, not engagement. The entire world is now in the age of all-out competition with China — not only military, but also economic, diplomatic, political and in the field of intelligence.

Meanwhile, China is pursuing a “gray zone” strategy with regard to the U.S.: avoiding war while steadily forcing changes to the status quo that will culminate in a new, Chinese-led international order. China’s gray zone strategy demands a response from the U.S. and its allies.

It is thus imperative to adopt a “whole of government” and a “whole of society” approach, particularly to the issue of cybersecurity. Indeed, cybersecurity depends on the resources and capacity of the private sector. National governments cannot keep up with the speed of the private sector’s developments and innovations in “disruptive technologies.” We must break down the vertical segmentation of public and private sectors and ready a robust, flexible public-private partnership.

We must also think carefully about how we compete with China.

We must take full advantage of the ways in which disruptive technologies can be used for social progress, while keeping its potentially negative applications in check. We need to establish a code of ethics, rules and system of governance that will ensure this type of use, and limit the ability of disruptive technologies to upend our societies and politics. Rooting this approach firmly in democratic societies and developing it into a set of international standards and norms will, in the long run, prove to be the most effective strategy for competing with China. Democratic societies must win the war domestically before taking on the outside world.

Next, we must not allow the world to segregate China. The fact that China can access the U.S. market while the U.S. cannot access China’s has prompted some in the U.S. to push for a stricter distinction between the “free internet” and China’s “controlled internet.” However, we should not be so quick to abandon the goal of establishing common global standards and rules to govern the digital sphere.

Finally, we should neither overreact to China’s threat nor compete with China to the extent that we end up imitating it. We would lose everything by doing so. As the Cold War intensified, George F. Kennan, the architect of the U.S. strategy of containment toward the Soviet Union, warned: “The greatest danger that can befall us in coping with this problem of Soviet communism, is that we shall allow ourselves to become like those with whom we are coping.”

Now is a good time to reflect on the implications of his warning.

Yoichi Funabashi is chairman of the Asia Pacific Initiative and a former editor-in-chief of the Asahi Shimbun. This is a translation of his column in the monthly Bungei Shunju.

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