Can We Head Off a China-U.S. Technological Cold War?

The famous Prussian military theorist Carl von Clausewitz once described war as “the continuation of politics by other means.” The same can often be said of tech and trade policy, especially when it comes to the U.S. and China.

Over the past several years, the two countries have been caught up in what has become a serious rivalry impacting the fortunes of multi-billion dollar, multinational companies and the future of telecommunications infrastructure and technological development in two of the world’s largest and most consequential economies.

Indeed, events just this past month underscore the extent and severity of the current standoff. In mid-April, the U.S. banned American firms from selling parts and software to China’s ZTE, ostensibly for its role in undermining Iran sanctions. The move may bar ZTE from using Google’s Android OS in its phones and threatens its supply of components, up to 30 percent of which are supplied by U.S. companies, according to Reuters.

ZTE isn’t alone. Earlier this year, America’s top intelligence officials issued a public warning against Huawei, urging U.S. customers to stay away from its products. AT&T, Verizon and Best Buy promptly dropped the highly anticipated Huawei Mate 10 smartphone from their offerings. China’s market-leading drone maker DJI has also been in the crosshairs. The U.S. is looking to ratchet up pressure still further with the Foreign Investment Risk Review Modernization Act of 2017 (FIRRMA), which would enable the U.S. to block more technology transfers, the sharing of intellectual property with certain foreign individuals and more.

The ostensible reason for the U.S. moves is the fear that the Chinese government could use these companies to conduct espionage against the United States. The idea that a government would use a theoretically private tech company for espionage purposes shouldn’t come as a surprise to Americans. After all, U.S. tech companies, including Verizon, AT&T and Yahoo, have all been caught helping the NSA embed surveillance tools in their products and networks. After NSA contractor Edward Snowden spilled the beans on how the U.S. conducts cyber espionage with the willing cooperation of private U.S.-based tech firms, multiple U.S. tech companiesearned a chilly reception in overseas markets.

And while Chinese firms have been in U.S. crosshairs of late, the country has put its own pressure on U.S. tech firms as well. Apple was forced to set up a data center in China to store Chinese customer data, while social networking services Facebook and Twitter are banned outright. According to The New York Times, China has banned government offices from installing the most recent version of Microsoft Windows, while Cisco, Apple and Intel products were removed from equipment buying lists distributed to state officials. Another U.S. giant, Qualcomm, was fined $975 million for “anticompetitive behavior.”

Given how tightly integrated global supply chains are, it’s difficult to imagine how the U.S. and China could completely disentangle and effectively nationalize their technology companies, even if they wanted to. But there’s no question that the countries are moving beyond tit-for-tat retaliation and are instead entering a potentially more disruptive phase. The upshot is that both U.S. and Chinese tech brands could find themselves permanently foreclosed from each other’s markets. Important next-generation projects, like the building out of 5G networks and the development of more powerful artificial intelligence, could suffer.

But if we are entering a form of technological Cold War, maybe the actual Cold War holds out the promise of a solution. Specifically, we can look to how the two combatants managed to de-escalate a headlong rush to weaponize the Antarctic and outer space.

Both the “Outer Space Treaty” (as it’s colloquially called) and the Antarctic Treaty System effectively cordoned off both arenas from military competition between the Cold War superpowers (though not, in the case of space, espionage). The U.S. and Soviet Union also agreed to forswear certain technologies, such as chemical and biological weapons, and consented to limits on nuclear weapons and a ban on nuclear testing.

Perhaps a similar template could work with the U.S. and China today. The countries could agree that certain pieces of network infrastructure and certain technologies are off limits to backdoors and other exploitable vulnerabilities. Much as the Antarctic and Space treaties created defacto “neutral zones” around geographical territory, a modern pact could establish that certain technologies be off limits to state surveillance technologies (at least at the point of manufacturer and sale). A neutral and international monitoring regime could be put in place to monitor compliance.

It wouldn’t be easy and, unlike the actual Cold War, the China-U.S. technological Cold War doesn’t have the sobering threat of nuclear annihilation to incentivize cooperation. But the alternative is a race to nationalize and wall off technological cooperation from two of the world’s foremost innovators. Surely there’s a better way.