US-Sino Technology Competition: Chinese State Capitalism vs US State Capitalism

The U.S. and China are increasingly vying for supremacy over emerging technologies in what some have termed a “technological race.” Given the economic and military implications of these technologies, the direction of this competition will likely determine the geostrategic balance of power of tomorrow. Therefore, in recent years, Washington and Beijing have been accelerating their efforts to develop these technologies.

Eurasia Group has tasked the Capstone team with analyzing the evolution of this competition. The evaluated who is currently “winning” the race to develop specific emerging technologies, determine how both countries arrived at this point, and predict who is likely to “prevail” within a five-year time horizon.  The team compared U.S.-China public policy and innovation ecosystems to assess the relative efficacy of “state-led” vs. “market-led” development models in spurring technological innovation. By drawing on existing literature regarding economic and industrial development, the Capstone team developed an overview of how each country has historically achieved technological advancements .

The report focused on two of the most significant emerging technologies: A.I. and quantum. Using both qualitative and quantitative metrics to evaluate and compare Sino-American progress in developing these technologies, the Capstone team analyzed the commercial and military implications. In addition, the team presented a case study on semiconductors to contrast the utility of state- and market-led models with respect to foundational and emerging technologies. Finally, the team conducted scenario analysis to project the likely near-term evolution of the competition in A.I. and quantum.