Welcome to Here It Comes, my latest email bulletin effort and the successor to the Transpacifica and U.S.–China Week newsletters.

Secretary of Commerce Gina Raimondo speaks at an event in October 2022. Source

US Commerce Secretary Gina Raimondo delivered a major speech on “U.S. Competitiveness and the China Challenge” today at the Massachusetts Institute of Technology. It is an important document, joining Secretary of State Tony Blinken’s May China policy speech, National Security Adviser Jake Sullivan’s September speech on high-tech strategy, and the October National Security Strategy as one of the Biden administration’s most substantive strategic statements on China topics.

This speech does not break much new policy ground; it reiterates the administration’s approach and provides a technology- and economic-focused summary of measures taken so far and further intentions. I’m not going to summarize the speech or try to list its top messages, but here are a three things that stood out:

I. Raimondo: China is committed to decoupling, but we are not. Really?

Two quotes. One from the top of the speech:

[China’s leaders] are committed to increasing the role of the state in society and the economy, constraining the free flow of capital and information, and decoupling economically in a number of areas, including many technology sectors of the future. They have firewalled their data economy from the rest of the world. And they are accelerating their efforts to fuse their economic and technology policies with their military ambitions. [Emphasis added.]

One from near the end:

At the same time, we are not seeking the decoupling of our economy from that of China’s. We want to promote trade and investment in areas that do not threaten our core economic and national security interests or human rights values.

Is it true that China seeks to decouple but the United States does not? I think a fair reading of each side’s actions leads to the conclusion that they have pretty similar goals in this regard, namely to reduce dependency in areas that each side perceives as making them vulnerable to the other.

China’s government has long been explicitly committed to independent or indigenous innovation 自主创新. This is especially the case since the Trump administration demonstrated the US government’s ability and willingness to cut off Chinese industries from key components such as semiconductors that are crucial to their success. Decreasing dependency was a key motivator in 2015’s Made In China 2025, and clearly it has proven to be a valid concern, given the US decision to deny China access to the advanced chips that, as Raimondo says, “are used to train large-scale artificial intelligence models”—affecting a broad range of applications. If you define “decoupling” as developing alternatives to dependencies that give another entity leverage over one’s economic and security interests, then yes Chinese leaders are determined to decouple.

Raimondo speaks of the United States becoming “overly dependent on China for an increasing number of critical technologies and goods.” She identifies “supply chain dependency” as one risk factor in new CFIUS guidance. She cites China’s use of trade cutoffs as leverage as one form of “economic coercion” the administration wants to avoid. Fair enough. But how does the administration’s determination to reduce dependence on China for key products land outside the same definition of “decoupling”?

I would argue that neither side’s urge to reduce dependency it views as perilous needs to translate to “decoupling” in a literal sense—separating the two countries in the field concerned. Troublesome dependency could be reduced through the creation of a competing supply chain either domestically or in a location not controlled by the other, yet the two could still do business. It’s hard to understand Chinese actions as particularly more decouple-ish than US ones in recent years, though China made policy changes and demands in its digital economy that effectuated some decoupling a decade ago, around the time Google famously pulled out of the China search market. More recent dis-entangling efforts seem to have been spurred by the US side. For example, I’m not sure the high-end semiconductor blockade, for instance, can be honestly understood not to be aimed at separating the US and Chinese advanced tech ecosystems.

The word “decoupling” is annoying. It can imply full separation where limited disentanglement or hedging may actually be the trend. It tends to imply changes across many fields when degree and direction of change varies widely across industries. But I can’t wrap my head around a definition where actions indicate China’s for decoupling but the US is against it.

II. Linkage to US values. (Free flow of info, and privacy?)

Raimondo mentions “values” more than twice as many times as “interests” in this speech (14 vs. 6). A quick list of how values show up, followed by a comment about what leapt out at me here:

“Democratic values” appears three times as a set phrase, twice as a companion to “our national security” and once as “our core democratic values.” China’s “authoritarian standards and values” are the counterpoint.
A type of growth. “our values of sustainable and inclusive growth, as well as openness, transparency, and the rule of law”
With allies. “partnering with our allies in new ways to advance our shared values and shape the strategic environment” … “new multilateral arrangements reflect the shared values of the U.S. and its partners and allies.” … “they voice similar concerns about China’s behavior and a shared desire to cooperate and coordinate our policies around the rules, standards, and values that advance our collective national security and economic well-being” … “We are aligning our policies with our allies around our values of freedom, privacy, the rule of law, and fair competition.”
Something at risk. “[Chinese] efforts ‘to game the system’ … put at risk many of our fundamental values, such as the free flow of information and data privacy.”
Characterizing desirable US-China ties. “We want to promote trade and investment in areas that do not threaten our core economic and national security interests or human rights values” … “When Apple launched its iPhone 13, shoppers in China stampeded through a mall to be first in line. Our products signify not only high-quality but also our values of openness, innovation, and creativity.”1 …“promote trade and investment in those areas that do not undermine our interests or values” … “we must remember that sustaining these benefits over the long term requires that we defend our security and values in the near term.” Raimondo relatedly cites the Uyghur Forced Labor Prevention Act as a way to ensure US values are upheld in bilateral trade.

Two comments.

First, It’s worth underlining that values are framed as a baseline condition for ongoing economic interaction between the United States and China. Can anyone say linkage? It’s not the same as the ‘90s, but it’s back.

Second, this to me is a remarkable turn of phrase: “our fundamental values, such as the free flow of information and data privacy.” Here Raimondo is talking about how Chinese activities in international standards-setting bodies put these values at risk. I can’t resist noting that calling “data privacy” a fundamental US value is at odds with our country’s utter shambles of a legal regime to protect personal data from breaches or corporate abuse. It would be really nice if we started acting like it. Meanwhile, US commitment to “free flow of information” can refer to freedom of expression, which I believe is a core US value and one shared with many US allies; but the corollary free flow of data across borders is, as the secretary well knows, a significant area of friction between US corporate interests and allied jurisdictions such as Europe.

III. What’s ‘core’ for the USA? A tech trio.

The US government maintains a list of “critical and emerging technologies” (CET) that I from time to time compare with Chinese lists of key sectors such as the “strategic emerging industries.” The Biden administration updated the CET list in February.

Raimondo today identified a trio of fields as “core critical and emerging fields”: advanced computing, biotechnologies and biomanufacturing, and clean energy technologies. Later, she calls these three “foundational technologies,” echoing Sullivan, who in his September speech called them “force multipliers.” All of these are also on the CET list, sometimes in different phrasing, but these three are now regularly referenced as the Biden administration’s core technological development concerns.

That’s all for today. There’s a lot more in the speech, but these are my first reactions. What else stands out to you?

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About Here It Comes

Here it Comes is written by me, Graham Webster, a research scholar and editor-in-chief of the DigiChina Project at the Stanford Cyber Policy Center. It is the successor to my earlier newsletter efforts U.S.–China Week and Transpacifica. Here It Comes is an exploration of the onslaught of interactions between US-China relations, technology in China, and climate change. The opinions expressed here are my own, and I reserve the right to change my mind.

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For all that Apple is going through right now with China, this comes off as a mind-boggling reference. One of very few individual companies mentioned. Others include Micron, Intel, and Bulova Watch Factory, which Raimondo said moved her father’s job to China.

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