In the past 12 or 18 months, we’ve seen countless headlines relating to the so-called “Trade War” between the United States and China. Tariffs from Trump, retaliation from China, and so on were a continual story until a December trade agreement was reached. And now, at long last, the “Trade War” chatter appears to be dying down. The real economic cold war between the U.S. and China, however — the battle for worldwide tech supremacy — is ongoing, and is exceedingly unlikely to slow down.
The question we’re asking here is, who’s winning? And the best way to answer that question may be to break the tech war down into categories.
Biggest Tech Companies
Some would argue that the conversation about which nation is home to the biggest, most valuable, and most influential tech companies is essentially the whole ballgame. These are the companies that drive the entire tech field forth into the future, after all. And in this category, the U.S. remains the world’s dominant technological force.
As of last year, the United States was home to eight of the top 10 most valuable tech companies in the world (with South Korea’s Samsung Electronics ranked second and China’s Tencent Holdings ranked ninth). Zooming out even further, data indicated that 65 of the 154 largest tech companies on Earth were American, next to just 20 that were Chinese. Now, there are some Chinese companies, like Tencent and Alibaba, that have gained significant influence in the past several years, and this can seem to influence headlines to suggest a dead heat on the tech company front. But the numbers show that in this category, there’s little debate to be had.
Scale of Manufacturing
On the manufacturing front — that is, when it comes to the actual production of tech-related products — China still has a significant edge. As many are well aware, this is in large part because even the biggest and most successful American tech companies still outsource parts, and sometimes whole products, to Chinese manufacturers (as well as others around the world). To give one example, China manufactures more iPhones than any other country on Earth, despite Apple being one of the companies giving the U.S. such a strong edge in our previous category. Even beyond this example though, China is well ahead in tech production.
Semiconductors and processing chips can fly under the radar in broader tech conversations, but are often the keys to advancing tech products of all kinds. And where chip development is concerned, the United States’ collection of tech giants is keeping it well ahead in both innovation and revenue.
Regarding innovation, various U.S. companies concerned either specifically with circuit board design or with the creation of consumer tech products are consistently pushing boundaries. PCB design is incorporating materials for HDI to enable smaller, lighter, high-performance circuit boards, which in turn facilitate the design of some of our most advanced tech products. At the same time, advanced manufacturing methods and cloud support for sharing schematics are helping companies to make their chip development more efficient.
Meanwhile, as to revenue, the name of note is Intel. As the U.S. company most closely associated with chip development for the broader tech world, it still dwarfs its closest Chinese counterpart (HiSilicon) in production and revenue.
Internet & Telecommunications
Combining internet access and telecommunications makes for an extremely significant category. However, China has such a significant lead in both areas that it’s worth considering this as a fairly comprehensive advantage.
In terms of internet access, it’s perhaps inevitable that China is leading the U.S., given the differences in population. That said, the extent to which China leads in this area may surprise some people: Per 2019 data, China has 765 million citizens who are online, compared to 245 million in the U.S. (with India in between at 391 million). This matters within the broader scope of the tech war mostly because it means that many more Chinese citizens have the potential to get involved in technology, take advantage of eCommerce, and so on.
In the telecommunications subset of this category, the name to know is Huawei. Founded in the late ‘80s but growing explosively of late, the Chinese company is said to control nearly 30% of global telecommunications infrastructure. It’s also an early leader in the deployment of 5G networks, and is currently vying to move into the European market.
Unfortunately, it’s hard to come up with an ultimate conclusion in analyzing this tech war. Really, it depends on what you most value as an indicator of leadership in technology. What we can say for now is that in a general sense, the U.S. leads in innovation, while China may in some senses have more reach.
This is an op-ed article written by Edward Dennis.
This article is so incomplete. It is interesting he stops where USA has kept its marginal advantage. But, there so much information to talk about if you get into the technological world. It is immense. For example, robots, face recognition, quartz, etc. This was a lousy job.