[5th EAI Academy] ⑤ Advanced Technologies such as Artificial Intelligence and Semiconductors, and Future World Politics

YouTube link: https://www.youtube.com/watch?v=CJFkmbFyr0U

■ Bae Young-jais currently a professor in the Department of Political Science and International Relations at Konkuk University, and serves as the Chairperson of the Advisory Committee for the Ministry of Foreign Affairs' Center for Economic Security and a member of the National Security Advisory Council for the Presidential Office. She earned her Ph.D. in Political Science from the University of North Carolina at Chapel Hill and previously worked at the Science and Technology Policy Institute. Her main research areas include science, technology, and international politics, and science and technology diplomacy. Her major papers and books include "A Study on the World Politics of Science and Technology" (Korean Journal of International Studies, 2021), "International Political Hegemony and Technological Innovation: A Case Study of US Semiconductor Technology" (Journal of International Area Studies, 2020), "Regulation of Foreign Direct Investment and National Security: A Focus on the US Case" (Journal of International Area Studies, 2020), and "Public Diplomacy of Middle Powers" (Sahoapyongron, 2013).

Video Transcript

making things, then the compass that points north, south, east, and west, then gunpowder, and then printing. These are the four great inventions. Where are they all from? They are from China, from China during the Song Dynasty in the 10th and 11th centuries. So, the Song Dynasty at that time was a very advanced Chinese empire, but why didn't it conquer the world? With such advanced technology, why didn't it conquer the world? There are many complex reasons for this. It didn't conquer the world. The boundaries of the Chinese Empire were set to a certain extent. It didn't go into the Middle East or Turkey, nor did it cross the Pacific. You may have heard of the Zheng He voyages during the Ming Dynasty, which are said to have sailed multiple times, but these were not imperialistic invasions.

They simply visited, observed the local specialties, and how people lived. They didn't start wars. Why? Why would they have used their technology to conquer and expand? This is because the West did. But later, the West, with its advanced technology, such as the firearms of the time – gunpowder was first invented in China, but the Chinese mainly used it for fireworks. So, every time you see fireworks during China's National Day, the Scientific Revolution and the Industrial Revolution followed, and the West expanded imperially, going to Africa, and indeed to Korea and China.

This expansion was clearly driven by a technological foundation. Because such historical experiences fill our minds, it's easy to think that technologically advanced nations in history always expanded and built empires using their technology. However, this is not necessarily the case. Technology is neither a necessary nor a sufficient condition for hegemony. But why all the fuss about semiconductors now? It makes you wonder. So, how should we view this? We are currently focused on the US-China semiconductor competition, and it's important to see who will win this technological race. However, it seems more important to adopt a perspective that views technology and global politics from a broader historical viewpoint. This is what I would like to convey.

In international politics, theoretically, regarding international relations and technology, what the professor has discussed is a theoretical perspective on understanding technology. Assuming that most of you are familiar with the basics of international relations, we talk about realism, liberalism, and constructivism. However, neither realism, liberalism, nor constructivism has explicitly discussed what technology is. But if you read between the lines of realists, liberalists, and constructivists, realists see technology as a crucial means for national power and prosperity, hence the conflict between the US and China over semiconductors – possessing it grants national power. It enhances military and economic capabilities. Liberalism emphasizes interdependence in international politics. The most important foundation for emphasizing interdependence is the development of transportation and communication. Without it, a globalized world would be impossible. So, in a way, the interaction of global politics in the 21st century

and interdependence, the most crucial element enabling these is the technological foundation. Liberalism considers this a very important environment and stops there. It doesn't research how it changes. Constructivism focuses on identity and mutual constitution. From this perspective, it examines how technology shapes global politics and how global politics has shaped technology. For example, we look at containers. When we consider maritime transport, we might think that containers emerged simply because they were needed. But if you look closely at the process, politics is deeply involved. The standardization and widespread development of containers were significantly influenced by the Vietnam War. The history of containers, the history of objects – if you ever try to study the history of eyeglasses, shoes, or containers, or even cars

We tend to think that things have evolved into the most efficient forms. But this is not always the case. Politics is deeply embedded within them. For instance, there's a paper arguing that the two-wheeled form of the bicycle, which seems straightforward, incorporates various political perspectives. The creation of a single container involved the imposition of standards and international politics. Therefore, it's of interest to examine how politics constitutes international relations and how technology constitutes international relations. I've spoken too long in the introduction, but regarding technology and world politics, the most discussed aspect currently, as mentioned earlier, is the relationship between technology and world politics, and hegemony.

This is by George Modelski, an international relations scholar. His long-cycle theory, or more precisely, the theory of long-cycle leadership cycles, posits that leadership in international politics is determined by the leading sector – the sector where innovation is most active. The shift in global political power occurs based on who leads the economic paradigm shift driven by new technologies. Historically, British hegemony was possible due to the Industrial Revolution, textiles, and the steam engine. The second Industrial Revolution, characterized by railways and steel, enabled British hegemony. Edison's inventions, electricity, chemical engineering, and automobiles, including Ford's, formed the foundation of American hegemony. Although the US faced challenges in the 1980s, the IT revolution brought it back, solidifying its hegemony. Currently, another technological revolution is underway, and its outcome will determine the future of global political hegemony.

Modelski discussed this. Therefore, in this framework, the intense focus on the current competition in semiconductors and artificial intelligence seems to be centered. Now, let's talk a bit about semiconductors. You don't need to know the details of the semiconductor industry, but there's the design part, and then the manufacturing part. For design, there are Electronic Design Automation (EDA) tools, and then the equipment, and then materials. The major players are about seven or eight countries. Of course, countries like Singapore and Malaysia are also involved, but the major players are these countries. Keeping this in mind, the US...

In this area, China is also working hard on design now. However, the most hotly contested area is wafer fabrication. The US flag is not shown here. The US excels in design, equipment, and software. South Korea is also good at semiconductors but not in other areas; it focuses on DRAM, etc. Japan is involved in materials and equipment. China started with assembly and is now diligently entering this field. From the US perspective, seeing China's rapid advancement in this area, posing a threat to Japan, South Korea, and Taiwan, they felt a sense of crisis.

While the US still leads in design, the foundry process, primarily handled by South Korea, Taiwan, and Japan, is being rapidly pursued by China. This poses a significant risk. If, for instance, during a contingency like a Chinese invasion of Taiwan or a North Korean attack on South Korea, the fabrication processes in Taiwan or South Korea were halted, the US semiconductor industry would face severe difficulties. In fact, South Korea and Taiwan's proficiency in semiconductor fabrication originally stemmed from the US.

The US handled this until the late 1960s and early 1980s. This involved massive equipment investment and required 24-hour operation, which was not the American style. It demanded constant, high-tension work rather than flexible engagement. Working in clean rooms also contributed. So, the US essentially said, 'Let South Korea and Taiwan handle this.' Consequently, through a division of labor, the US retained design and equipment, while the fabrication process was naturally transferred to South Korea and Taiwan. However, the rise of China presents a risk of supply disruptions.

Furthermore, China could potentially take over this sector. The US began to feel this threat, leading to the current semiconductor regulations. From 2001 to 2015, following China's WTO accession, China experienced tremendous economic growth, nearly 10% annually. It integrated into the global economy and began to grow rapidly. Moreover, with Xi Jinping's rise to power in 2013, China shifted from Deng Xiaoping's cautious 'hide your strength, bide your time' approach to a more ambitious 'Chinese Dream,' signaling a more assertive stance.

Up to that point, it was manageable. During the Obama administration, there was a sense that perhaps China could coexist with the US as it integrated into the global economy. However, with the launch of 'Made in China 2025' in 2015, China recognized the need to upgrade its economy from a low-wage, labor-intensive model. It began large-scale strategic investments emphasizing innovation and advanced technologies to become a manufacturing powerhouse. Even then, during the Obama era, concerns were present, but it was considered manageable. Obama did not impose any sanctions.

However, as President Obama was leaving office, a report was prepared at the White House on how the US would maintain its semiconductor leadership. This was likely intended for Hillary Clinton, who was expected to succeed him. At that time, there was no significant containment. There were some minor checks, though. For instance, a Chinese DRAM company sought to acquire Micron, a US-based DRAM manufacturer. This was because, after years of economic growth, China had accumulated substantial capital and needed technology.

Developing technology takes time. Therefore, the strategy was to acquire foreign companies possessing the necessary technology. Companies involved in technological development often face capital shortages and require continuous investment for output. Thus, Chinese capital and technology companies often found mutually beneficial arrangements. Many Silicon Valley companies were acquired. However, Micron is the only US-based DRAM company. The Obama administration placed some restrictions on this acquisition.

The US has a mechanism within the Treasury Department to block foreign companies from acquiring strategic companies or industries. This marked the beginning of such measures. However, the situation escalated significantly in 2017 with the election of Donald Trump. From his campaign onwards, Trump argued that China was stealing US technology and that the US trade deficit was due to China. The Trump administration's perception was that China's technological innovation was driven by the illicit acquisition of advanced industries, viewing it as economic aggression and even a military threat. This led to a full-scale crackdown. Initially, the focus was on regulating Chinese capital's mergers and acquisitions of US companies.

This was done through bodies like the Committee on Foreign Investment in the United States (CFIUS). Subsequently, export controls were implemented. Many of you may have heard of this. In 2018, the US enacted the Export Control Reform Act on a large scale. Following World War II and the Cold War, strategic materials were controlled between the two blocs. High-end computers, for instance, could not be exported to the Eastern Bloc because they were designated as strategic materials. COCOM (Coordinating Committee for Multilateral Export Controls) existed for this purpose, ensuring that Western countries did not export strategic materials to each other.

However, this was deemed insufficient, and regulations were gradually tightened. With the end of the Cold War, COCOM became unnecessary and was dismantled. Nevertheless, the need to regulate strategic materials persisted, leading to the establishment of the Wassenaar Arrangement. Export controls have been ongoing, but this system significantly expanded their scope. The Export Control Reform Act broadened the range of covered technologies considerably.

Furthermore, there is a 'foreign direct product rule.' This rule allows the US to block exports from countries like South Korea and Taiwan if they use US components or technology. This law was enacted to systematically target Chinese semiconductor companies, placing them on the Entity List and imposing trade restrictions. Huawei is a prominent example. Restrictions were imposed on Huawei starting in 2018. However, after about a year, Huawei remained resilient. The US then escalated its measures with secondary and tertiary regulations. The fourth round of regulations in May 2020 proved decisive in curbing Huawei's growth. This involved the foreign direct product rule.

This rule requires foreign companies to obtain US permission. For instance, Samsung, a South Korean company, needs US approval to export semiconductors to China. How is this possible? Although it's a South Korean entity, the US Export Control Reform Act's foreign direct product rule applies. Samsung could theoretically avoid this by not using US components. However, if they want to continue exporting, they cannot simply stop using US components; they need alternatives. Thus, they are forced to comply. Consequently, Samsung cannot export, and Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading contract chip manufacturer, which produced chips for Huawei, was also prohibited from doing so due to this regulation.

As a result, Huawei, which was rapidly growing as a smartphone competitor to Samsung, could not import the latest semiconductor chips needed for its devices. The most advanced chips are used not only in military applications but also in smartphones. Unable to obtain these chips, Huawei could not become a top-tier smartphone company, relegated to producing mid-range phones. Huawei's ambition to grow was thus thwarted, and its smartphone business has since been spun off.

This effectively prevents challenges to Samsung or Apple. These export controls were initiated. Then, Trump was succeeded by Biden. Many professors and technology experts expected Biden to adopt a different approach. Trump's policies were seen as overly nationalistic ('America First'), prioritizing the US. However, Biden, having served as Vice President and Senator, was known for his pro-engagement stance, having met with Xi Jinping. Therefore, it was anticipated that China policy, including regulations, would be eased. However, the opposite occurred; the regulations intensified.

This indicates a bipartisan consensus on containing China, with both Republicans and Democrats sharing the same objective. The Biden administration's strategy towards China in technology and semiconductors has two main pillars: First, preventing China from catching up by withholding advanced US technologies, including semiconductors, AI, and quantum computing. Second, the US has begun self-reflection, a key difference from Trump's approach. The first pillar is identical to Trump's policy of continuing export controls. The second and third points differentiate Biden's approach. The second point involves the US acknowledging its manufacturing decline. Trump's approach was to encourage domestic production, suggesting that the US could simply increase its own foundry capacity. However, it became apparent that decades of deindustrialization had led to a shortage of skilled labor and a dilapidated industrial infrastructure.

This led to US introspection. Historically, the US had two visions: Hamilton's, focusing on industry and commerce for national strength, and Jefferson's, advocating for an agrarian society. Hamilton's vision ultimately prevailed, leading to industrialization. From the late 19th century through the mid-20th century, the US was the global manufacturing center. However, Germany and later Japan emerged as industrial powerhouses, followed by South Korea and Taiwan. US manufacturing began to decline, underscoring the importance of actual manufacturing capabilities, not just services and finance. This realization has prompted the US to strengthen its manufacturing sector.

When trying to do so, manufacturing capacity had severely declined. In the U.S., after not having produced foundry for 20 to 30 years, there was a lack of personnel and the system had to be rebuilt. What happened? This led to the U.S. recognizing its weakness. In fact, early in its history, the U.S. had Hamiltonian and Jeffersonian visions for how to build the nation. The Hamiltonian vision centered on industry and commerce to create a strong nation, while the Jeffersonian vision aimed for an agrarian society of independent farmers. Ultimately, the Hamiltonian vision prevailed, leading to an industrialized nation. From the late 19th century through the mid-20th century, until the 1970s, the U.S. was the center of global manufacturing. Afterward, Japan and Germany surged ahead, and then countries like South Korea and Taiwan entered the manufacturing arena, leading to the decline of U.S. manufacturing. While excelling in services and finance is important, the U.S. has once again realized the critical importance of manufacturing, the actual production of goods, and its technological prowess. It is now striving to strengthen this sector. You may have heard about...

...the CHIPS Act in the news. That is precisely why. The U.S. is already involved in chip design and equipment manufacturing, so that is not the focus. Instead, the emphasis is on processes and packaging, areas where the U.S. has fallen behind. Furthermore, while the Trump administration pursued an "America First" or "America Only" policy, the Biden administration's approach is different. Initially, the U.S. attempted to curb China's semiconductor advancements through restrictions for a year or two, but this proved insufficient. However, by imposing restrictions that also affected South Korean and Taiwanese companies, China's progress was significantly hampered. This highlights the necessity of alliances. The U.S. cannot achieve its goals alone; to counter China, cooperation with South Korea, Europe, and Taiwan is essential. This underscores the need for alliances, which is what is currently being discussed.

Looking at export controls, one can see how they have been implemented. Those who have followed the news will be familiar with the details. Naturally, export controls are applied to areas related to military security, particularly concerning chips used in the production of certain goods. Currently, the situation has evolved to this point: For those unfamiliar with technology, terms like 128-layer or 18-nanometer are used. For context, the cutting edge today is around 2-nanometer or 3-nanometer, a technology mastered by Samsung and Taiwan's TSMC. Chinese companies, however, are currently at around 28-nanometers.

The U.S. is aiming to prevent China from reaching 14-nanometer or 20-nanometer processes. They are allowing advancements beyond 18-nanometers but strictly prohibiting progress within 20-nanometers. To achieve this, they must control the necessary equipment. The critical cutting-edge equipment for semiconductor manufacturing is EUV (Extreme Ultraviolet lithography). Only ASML in the Netherlands produces this type of advanced equipment. While other companies manufacture certain types of optical equipment, ASML is the sole producer of the extreme ultraviolet lithography machines required for 14nm, 20nm, 3nm, and 2nm processes. Therefore, the U.S. is focused on preventing ASML from selling its EUV equipment to China. Although ASML is a Dutch company, the U.S. exerts influence through regulations and diplomatic channels with the Netherlands. One might wonder about the ASML CEO's perspective. Is it good or bad for them?

The professor mentioned that a company's interests do not always align with a nation's interests. ASML would, of course, prefer to sell more. Despite some internal dissent, the Dutch Ministry of Foreign Affairs is enforcing the restrictions. To date, the Netherlands has been a staunch ally of the U.S. Similarly, TSMC in Taiwan is being pressured not to manufacture for China. If China cannot produce 14nm chips, they would need to import them, and the U.S. is urging TSMC and South Korea's Samsung not to supply them. Through these measures, the U.S. is preventing ASML from exporting equipment and discouraging cooperation from the Netherlands, South Korea, and Taiwan in containing China.

How does the professor view these export controls? These controls have, in a way, given the U.S. some breathing room. China's semiconductor industry, which was rapidly advancing, has effectively been halted. Without access to equipment and advanced semiconductors, China, despite its financial resources, cannot proceed. The rapid ascent of China's semiconductor industry has thus stalled. Attempts within China to develop these technologies independently are proving difficult because such advancements require 20 to 30 years of dedicated investment, much like Samsung's decades of experience since 1986. It is unrealistic for China to achieve this in a few years, unlike ASML's development.

While not impossible over a longer period, China lacks the necessary time. Furthermore, the U.S. is restricting not only equipment manufacturers but also companies like Qualcomm and NVIDIA, which produce the advanced chips (like the H100 or A100) essential for generative AI. These AI systems require thousands of such chips to operate. Given that China is a vast market, these companies naturally wish to export. However, the export restrictions are preventing them from doing so.

During the Trump administration and the early Biden administration, the strict atmosphere made it difficult to defy the restrictions. Companies did not immediately protest. However, as these measures have persisted for two to three years, corporate profits have declined. Consequently, complaints have emerged. Jensen Huang, CEO of NVIDIA, has voiced concerns that such prolonged restrictions could harm U.S. companies. Elon Musk of Tesla has also visited China, suggesting that such stringent regulations are not beneficial. Wall Street analysts are echoing these sentiments. Reports indicate that the revenue of U.S. semiconductor companies has decreased by approximately one-third.

On average, this raises the question of how long these restrictions can be maintained. The U.S. shows little inclination to ease them. This brings us to the issue of strengthening manufacturing capabilities. The U.S. is heavily investing in this area, encouraging companies like Samsung and TSMC to invest as well. How does the professor perceive this? The U.S. has long maintained its leadership without robust manufacturing support. Now, it is making significant investments.

While substantial investments are being made, before discussing the professor's views, let us consider Morris Chang, the founder of Taiwan's TSMC. He started the company in 1986 and is considered a leading expert in foundry, a manufacturing technology the U.S. now desperately seeks. Now in his nineties, Chang remains active and has expressed skepticism about the U.S. efforts to revitalize its manufacturing sector, predicting potential failure. His reasoning is the lack of manufacturing talent in the U.S. The prevailing notion is that manufacturing requires talent, but Chang believes the U.S. lacks it. The common assumption is that manufacturing can be achieved by simply setting up equipment, training workers, and offering incentives for 24-hour, three-shift operations. However, TSMC built a factory in Oregon, mirroring its facility in Taiwan's Hsinchu Science Park.

Operational experience revealed that costs in the U.S. were 50% higher. American workers, for instance, do not work 24-hour shifts. While TSMC technicians would respond immediately, even in the early morning, to fix equipment issues, U.S. counterparts would wait until the next day. Chang believes that countries like South Korea, Japan, Taiwan, and China possess manufacturing talent, whereas the U.S. does not. He questions the U.S. drive to revitalize manufacturing without this talent pool. He suggests that the funds allocated for this revitalization could be better invested in Taiwan's security, ensuring a stable supply chain. This approach, he argues, would be a more effective use of resources, integrating market dynamics and labor considerations.

Therefore, simply pouring government funds into manufacturing does not guarantee success. What is the professor's opinion? Initially, he was highly skeptical of the U.S. semiconductor initiative, viewing it as misguided for a service-oriented economy. However, the U.S. is investing approximately $50 billion. While a significant sum, it is not astronomical in the context of global investment. The question remains: what can be achieved with $50 billion? This initial investment, however, has acted as a catalyst, attracting $200 billion in private investment. Furthermore, the diverse nature of the U.S. landscape is beginning to reveal untapped talent, with individuals who may not have previously displayed manufacturing prowess now emerging. Coupled with large-scale workforce training initiatives, the professor is cautiously optimistic, wondering if the U.S. might succeed. While not entirely convinced, he acknowledges that dismissing the possibility outright would be premature.

Moreover, the U.S. is not pursuing this alone; it is attracting companies like Samsung and TSMC. Considering the immense power and influence of the U.S., this initiative warrants careful observation. Regarding technological alliances, the situation is becoming more complex. Allies are beginning to voice concerns. For instance, a major issue for South Korea is the operation of Samsung and SK Hynix factories in China. These facilities produce DRAM and NAND memory, and continuous upgrades to equipment are necessary to maintain market competitiveness. This requires purchasing new equipment, often from U.S. or Dutch suppliers.

However, the U.S. is preventing the acquisition of such equipment. Consequently, these factories can only produce older-generation chips, significantly diminishing their market value. This leads to a substantial decline in overall revenue for Samsung and SK. Faced with this dilemma, South Korean companies are caught between adhering to U.S. demands and protecting their own business interests, resulting in a state of indecision. This cautious approach reflects the complex geopolitical landscape. Therefore, the future of these technological alliances remains uncertain, particularly as corporate profitability is a primary concern.

How is China responding to this situation? With limited options, China is compelled to develop its own technologies in the absence of U.S. support. This necessitates increased investment, though progress is challenging. As a result, China's semiconductor development is currently stagnating. Does this signify the end of China's ambitions? Absolutely not. Many individuals in Silicon Valley are of Chinese descent, and the Chinese government possesses substantial financial resources, including at the provincial level. While it may take time—perhaps 20 years, compared to the 5 to 10 years it might have taken under more open conditions—they are likely to succeed eventually. However, the U.S.'s stringent controls present a significant obstacle. China is retaliating with measures such as restricting exports of semiconductor materials, but these actions are not inflicting substantial damage. Projections indicate that while the U.S. will maintain its technological lead until 2030, China's semiconductor technology will continue to improve, suggesting an ongoing conflict with no immediate resolution. Specifically concerning semiconductors, a clear decoupling in advanced technologies is occurring, although a complete economic decoupling is unlikely. For example, upon visiting Walmart in the U.S. in August, one could still observe numerous 'Made in China' products.

This indicates that a complete halt in trade has not occurred; exports between the U.S. and China continue in strategic, high-tech sectors. The professor anticipates a bifurcated structure, where advanced technologies are separated, but complete separation is impossible due to the severe repercussions for the U.S. economy. Consequently, the professor will address the numerous questions regarding artificial intelligence, as it is a topic of significant interest. In contrast to semiconductors, China's capabilities in AI are more robust, offering greater potential for advancement. The professor will discuss this further, referencing recent developments. The nature of this technological competition differs from the past U.S.-Soviet rivalry, which was primarily focused on military technology. The current U.S.-China competition is characterized by the integration of civilian and military applications, particularly in semiconductors, which explains the U.S.'s stringent regulatory approach. This extends beyond military applications to encompass AI and other advanced technologies.

In the past U.S.-Soviet era, sanctions primarily targeted defense contractors and military-industrial companies. However, the current situation involves a broader range of civilian enterprises, making the competition significantly more complex. The professor's final point concerns the historical trajectory of hegemonic powers. When the U.S. rose to prominence, its primary competitor was not Britain but Germany. Britain's hegemony had long endured, and Germany challenged it. Germany's bid for hegemony in World War I failed, leading to Britain's decline and the U.S.'s ascent. Scientifically, during the 1920s and 1930s, Germany was at the forefront of scientific advancement, particularly in quantum mechanics. Many talented individuals, including those who later became prominent in the U.S., pursued education in Germany and the UK. At that time, top American talent sought education abroad. The U.S. only became the leading scientific nation after 1945.

Military hegemony preceded technological hegemony. During World War II, the U.S. made significant efforts to catch up with German technology, aided considerably by scientists who had fled Germany, such as J. Robert Oppenheimer, who, although associated with the U.S., had German roots. This suggests that the notion of China rapidly becoming a hegemonic power due to advancements in AI and semiconductors is perhaps misguided. The U.S. itself was technologically behind Germany and the UK when it achieved hegemony. The U.S. leveraged its "manufacturing system," characterized by a large market and strong manufacturing base—qualities that China now possesses. Therefore, the U.S.-China hegemonic competition narrative is evolving. While five years ago, the sentiment was that China was rapidly advancing and poised to become a hegemonic power, the COVID-19 pandemic and other factors have somewhat tempered this outlook. Recently, there have been discussions about China reaching its peak.

Given the current economic difficulties in China, including the real estate crisis, some predict a recurrence of the 2008 mortgage crisis. This raises the question of the order in which hegemonic power is achieved. It is not necessarily technological hegemony first, followed by economic or military power. Economic power, measured by GDP, typically precedes per capita GDP. Similarly, manufacturing strength often precedes overall GDP growth, which in turn precedes per capita GDP growth. Financial hegemony follows, with technological leadership emerging later in the U.S. trajectory. This historical sequence may not necessarily apply to China. Therefore, viewing the current U.S.-China technological competition solely through the lens of a decisive battle for hegemony might be inaccurate. Instead, it is crucial to examine how this competition interacts with other societal and economic innovations.

This chart illustrates Nobel Prize winners in science. While the data might appear distorted due to being a photograph from a book, observe the period from the 1940s to the 1950s: the U.S. received fewer awards than Germany or the UK. The significant increase began in the 1960s. This demonstrates that China's current scientific and technological standing, while perhaps not yet leading to hegemony, is comparable to the U.S.'s position during its ascent. The U.S. also faced a period where its scientific achievements were not dominant.

The U.S. relied on its "manufacturing system," characterized by a large market and robust manufacturing capabilities—qualities that China now possesses. Therefore, the narrative surrounding the U.S.-China hegemonic competition is shifting. Five years ago, the prevailing view was that China was rapidly closing the gap and would soon achieve hegemonic status. However, the COVID-19 pandemic and other factors have somewhat slowed this trajectory. More recently, there have been discussions about China potentially reaching its peak.

Given China's current economic challenges, including the real estate crisis, with some predicting a repeat of the 2008 mortgage crisis, the question arises about the sequence of hegemonic power acquisition. It is not necessarily technological hegemony followed by economic or military dominance. Economic strength, measured by GDP, typically precedes per capita GDP. Manufacturing prowess often leads to overall GDP growth, which then influences per capita GDP. Financial hegemony follows, with technological leadership emerging later in the U.S. historical progression. This sequence may not necessarily apply to China. Thus, it is not guaranteed that this historical pattern will be replicated. The professor emphasizes that viewing the current U.S.-China technological competition solely as a prelude to imminent hegemony might be shortsighted. Instead, it is essential to analyze the interplay between this competition and other societal and economic innovations.

However, it is important to recognize that the historical context may not be directly applicable. The current U.S.-China technological competition should not be viewed in isolation but rather in conjunction with its organic connections to broader societal and economic innovations. This chart, depicting Nobel laureates in science, offers insight. Despite its appearance, it shows that in the 1940s and 1950s, the U.S. did not receive significantly more awards than Germany or the UK. The surge in U.S. recognition began in the 1960s. Therefore, dismissing China's potential for scientific and technological advancement and its path to hegemony would be premature, as the U.S. itself followed a similar trajectory.

When the movement of people and capital is very restricted, the engine of innovation declines. Compared to the era of globalization when things moved across borders without restriction, closing borders leads to a decline. Moreover, current technological advancements like artificial intelligence pose a civilizational challenge. These technologies genuinely challenge humanity's survival and future, necessitating deep consideration on how to proceed. To this end, scientists need to cooperate, but when technology is framed as a competition, defeating the opponent becomes paramount. Prioritizing winning over assessing whether the technology poses a threat to humanity leads to immense danger. The diagram presented here illustrates this predicament. This is something the professor has been discussing for the past three to four years, and it is the most frequently asked question when discussing technology and hegemony. So, professor, who do you think will win?

The U.S. and China, by engaging in intense competition rather than cooperation, risk catastrophic consequences in areas like climate change, pandemics, and artificial intelligence. This perspective, which the professor has advocated for years, underscores the need for cooperative channels. While competition is unavoidable, it must operate within established norms and avoid extreme conflict. Middle powers, such as South Korea, Australia, and Singapore, are crucial in fostering this environment. Lacking the power of superpowers, they must unite to mitigate U.S.-China tensions and promote adherence to international regulations. This approach to middle-power diplomacy is essential. Even during the Cold War, the U.S. and the Soviet Union found ways to cooperate on critical issues like polio eradication, demonstrating that cooperation is possible even amidst intense rivalry. To dismiss the possibility of U.S.-China cooperation based on a rigid realist perspective is a limitation of vision.

Technology is a pivotal factor shaping future global politics. The competition over strategic technologies is likely to intensify rather than diminish. However, technological superiority does not automatically guarantee hegemony. The military, economic, and societal applications of technology are crucial. Furthermore, technological advancements will not fundamentally alter the anarchic structure and competitive dynamics of international relations; nation-states will remain the primary actors. Despite the fierce technological competition, cooperation among major powers is imperative on issues such as climate change and the civilizational challenges posed by artificial intelligence. To ensure that technological competition remains within established norms, middle-power diplomacy is essential.

Technological advancement is a critical determinant of future global politics. Competition among nations over strategic technologies is expected to intensify, not wane. However, technological superiority does not automatically translate into hegemony; the military, economic, and societal contexts in which technology is utilized are paramount. Moreover, technological progress will not fundamentally alter the basic framework of international relations, characterized by anarchy and competition among nation-states. While intense technological competition is ongoing, cooperation among major powers on existential challenges like climate change and the civilizational implications of artificial intelligence is absolutely essential. To ensure that technological competition unfolds within established norms, middle-power diplomacy is indispensable. These are the key messages I wish to convey.