(Don) of a new era

Today’s clusters of growth, both economic and technological, in many ways have Asia at the forefront with China being the epicentre. Asserting that these may be triggers for a new era may not be an over-emphasis.

China has become the top research nation in the vast majority of advanced technologies, according to a new study by an Australian think tank that calls on the US and its Asian allies to work together to catch up.

The government-backed Australian Strategic Policy Institute’s (ASPI) Critical Technology Tracker assesses countries’ research competitiveness based on the number of research paper citations in 64 technology categories. China grabbed the top spot in 57 areas, or nearly 90 per cent, for papers released between 2019 and 2023, according to the report.

It also found that “China and the United States have effectively switched places as the overwhelming leader in research in just two decades”.

This represents a turnaround from 2003-2007 when the US led in 60 out of 64 categories while China topped just three. For 2019-2023, the US ranked first in just seven categories, including quantum computing and biotechnology, gene technologies and vaccines.

In particular, China has made strides in dual-use technologies that have possible military applications. There are 24 categories classified as being at high risk of being monopolised by a country, including radar, satellite positioning and drones.

When it comes to citations related to hypersonic detection and tracking, China has a 73% share, the US has 13% and the UK 3%. For advanced aircraft engines, China leads with 63% while the US trails at 7%.

“Scientific breakthroughs and research innovations in key defence technologies are increasingly likely to occur in China,” the ASPI report states.

Chinese President Xi Jinping’s “Made in China 2025” initiative, announced in 2015, seeks to modernise Chinese industry and boost self-reliance in 10 critical sectors, including semiconductors and robotics.

China’s goal is to become a global manufacturing powerhouse by 2049, the year of the centennial of the founding of the People’s Republic.

ASPI, founded by the Australian government in 2001, looked at papers published between 2003 and 2023 that are in the top 10% in terms of citations.

With the risk of Chinese tech monopolisation rising, the think tank recommends that AUKUS — the security grouping of Australia, the UK and the US — work more closely with Japan and South Korea.

“In a range of technologies, such as advanced robotics and autonomous systems operation technology, combined AUKUS efforts still trail China’s high-impact research output,” according to the report. “Combining AUKUS efforts with those of closer partners Japan and South Korea in these areas, however, helps close the gap in research performance.”

AUKUS was launched in 2021 as a counterweight to China’s growing influence in the Indo-Pacific. The three countries plan to work together on artificial intelligence and other advanced technologies.

In April, defence ministers from the three AUKUS countries issued a joint statement saying they are considering cooperation with Japan.

The US, the UK and Australia see Japan as a potential partner in AI, quantum technology, electronic warfare capabilities and hypersonic weapons, among other areas. Meanwhile, South Korea, which is investing in the mass production of next-generation semiconductors, is seeking joint research opportunities in cutting-edge defence technologies.

Japan ranked among the top five in terms of 2019-2023 citations in only eight tech categories, including nuclear power and quantum sensors. South Korea ranked in the top five in 24 categories, such as semiconductor manufacturing.

The authors of the ASPI report, Jenny Wong-Leung, Stephan Robin and Danielle Cave, said China and the US had “effectively switched places” over the past two decades, with more research now taking place in large economies in the Indo-Pacific region, “led by China’s exceptional gains”.

US technology companies such as Google, IBM, Microsoft, and Meta were found to have “leading or strong positions in AI, quantum and computing technologies”, but organisations including the National Aeronautics and Space Administration (NASA) and the US Air Force Research Laboratory slipped in the ratings, with all of the 10 top-performing institutions now in China.

The Chinese Academy of Sciences was the highest-performing organisation overall, with a global lead in 31 of the 64 technologies (48 per cent).

“China has executed a dramatic step-up in research performance that other countries simply haven’t been able to match,” the authors wrote.

India has also emerged as “a key centre of global research innovation and excellence”, the researchers said, as the nation ranked in the top five countries for 45 of the 64 technologies (70 per cent), up from 37 last year.

The authors said it was possible that some US research in sensitive technologies had already moved “into classified or commercial-in-confidence spaces” but argued “other countries would be wise to assume” that China’s momentum would continue.

“Some observers might argue that China’s ascendance into a research power—indeed the research power—doesn’t matter because other countries, the US in particular, remain ahead in commercialisation, design and manufacturing.

“That might be true for some technologies, but it represents a very short-term attitude.

“China, too, is making enormous investments in its manufacturing capabilities, subsidising key industries and achieving technological breakthroughs that are catching the world by surprise.”

The US and Canada have made moves to protect their local economies from China’s manufacturing power, with both imposing 100 per cent tariffs on imports of Chinese electric vehicles.

Asian countries encompass about 45 million square kilometres, almost five times the size of Europe which makes the talk of Asia in the singular as naïve.

They feature enormous cultural and linguistic diversity, with about 2,300 languages against Europe’s 300, and significantly different political approaches. Economically, too, variations are huge, in both scale and composition. Take the per capita GDP of Nepal and Singapore: the latter’s is 60 times the former’s. However, we can refer to these countries in the collective because they constitute a complementary and interlinked ecosystem, largely through mutual trade interests. Collectively, Asia is at centre stage in this unfolding new global drama.

The world order constitutes the institutions, frameworks, and rules that shape international affairs. During the Era of Markets, Asia rode a wave of prosperity through expanding trade with the world and — leveraging complementary comparative advantage — within Asia. It integrated economically without needing a political alliance or formal governance. But in a new era, non-economic factors may play a bigger role, raising the question of whether Asia will continue its pragmatic cooperation in a more contested, multipolar world.

In the international arena, the United States has used a range of economic and trade actions, including key technology restrictions on China, for technologies seen to have direct military application; tariffs, such as the Section 232 tariffs on steel and aluminium imports; and sanctions, including measures on Myanmar following its military coup and Chinese companies alleged to be supporting the Russian war effort in Ukraine.

The US also introduced new export controls on critical technology to China, including chip-making equipment and quantum computers and components.

The continued efforts to curb China’s chip industry mean that Beijing must look further afield for advanced technology.

As China continues its dominance in critical technology research, questions have been raised over exactly how the country is making these breakthroughs.

Around a year ago, officials from the Five Eyes intelligence alliance (Australia, Canada, New Zealand, the United Kingdom and the United States) issued a joint statement accusing China of stealing intellectual property. US FBI director Christopher Wray described it as an “unprecedented threat”.

Kennedy-White, managing director of Singapore-based venture catalyst firm DivisionX Global, has been quoted as saying that China’s jump up the ASPI rankings is “not entirely organic”.

He has added: “There is a correlation between China’s rise in certain technologies and allegations of intellectual property theft.”

It remains to be seen whether Asia’s pragmatic model of integration holds up well in this changing world or comes under strain with rivalry over strategic supply chains in the absence of more widespread formal regional arrangements that may expose fragilities. Not to forget, many of these pivotal drivers lie outside the control of any one actor, so there is a need not only to respond to but also to shape the perspective.

Views expressed are personal