A new report authored by China scholars and influential voices from the U.S. tech industry, including former Google CEO Eric Schmidt, has raised eyebrows after calling for “bifurcation” between the U.S. and China tech sectors. The report, leaked by Axios, wrote that there is “no returning to the pre-Trump ‘status quo,'” and argued in favor of “some degree of technological bifurcation” between the two countries.

Its release comes at a moment when observers in the U.S. and China are keenly watching the Biden administration for clues as to the extent to which it plans to reverse or continue hawkish policies introduced under former president Donald Trump, which included a slew of sanctions, bans, and export restrictions on Chinese tech companies. Observers suggest that the report’s authorship, including experts with close ties to the Democratic Party and figures in the new administration, indicate that U.S.-China technology competition is likely here to stay.

Axios’ Bethany Allen-Ebrahimian reported on key arguments put forward by the report:

The nature of the challenge, according to the report:

​The competition is “asymmetric,” meaning “China plays by a different set of rules that allow it to benefit from corporate espionage, illiberal surveillance, and a blurry line between its public and private sector.”

We’re heading towards somewhat tech spheres. “Some degree of disentangling is both inevitable and preferable,” the authors write. “In fact, trends in both countries — and many of the tools at our disposal — inherently and necessarily push toward some degree of bifurcation.” That’s because the alternative to bifurcation is a world in which China’s non-democratic norms have “won.”

There will be trade-offs, such as between “creating risk-tolerant research environments that encourage innovation versus security/espionage risks.” [Source]

South China Morning Post’s Tracy Qu reported that the new report provided further evidence of a new consensus in Washington on China policy:

While it is not known whether the new Biden administration will accept the report’s recommendations, which include forming a diplomatic alliance of “techno-democracies” and creating new offices like a deputy national security adviser for technology within the White House, its publication reflects broad-based recognition in US policy circles that Washington must develop a systematic approach to dealing with competition from China.

“As we seek to avoid unnecessary and counterproductive levels of separation, we should also recognise that some degree of disentangling is inevitable and preferable,” the report says. “In fact, trends in both countries – and many of the tools at our disposal – inherently and necessarily push toward some kind of bifurcation.” [Source]

But the report was clear in criticizing the Trump administration’s approach to tech competition, writing that “the Trump administration’s policies have done little to arrest America’s eroding technological advantage.” A key point of disagreement was with the previous administration’s policies on immigration, with the report’s authors calling for a significant expansion of schemes to welcome highly skilled immigrants. Notably, the authors argued that “most scientists & engineers strongly prefer to live here over China,” pointing to the high rate of retention of Chinese-born STEM PhDs in the U.S. But officials in the Trump administration may have eroded those preferences, amid an initiative by the FBI to scrutinize academics of Chinese descent’s affiliations with Chinese government institutions. Most recently, the arrest of MIT professor Gang Chen in the final days of the previous administration spurred outrage in the academic community, with MIT speaking out vocally in his defense and pledging to cover his legal fees.

The report’s authors also laid out a menu of options short of a ban that could constrain the reach of Chinese apps in Western markets, while leaving the door open for total bans as a measure of last resort. Recommended measures include some policies that were adopted by the Trump administration, such as restrictions on U.S. high tech exports targeting individual Chinese companies. Other recommendations include requiring that Chinese companies adhere to certain technical requirements such as end-to-end encryption, open sourcing and code audits, and data localization.

While the authors include many influential voices in the tech and policymaking sectors, they contributed to the report in personal capacities. It is unclear how much sway the report will have on policies ultimately adopted by the Biden administration. For now, the White House has paused the implementation of many of the last minute actions against the Chinese tech sector announced by the Trump administration pending a review, a regular practice for incoming administrations. But analysts believe that it is ultimately unlikely to shift from the previous administration’s China tech strategy entirely. Protocol’s Emily Birnbaum reported on comments from new White House officials and D.C. insiders which suggest that at least some of the previous administration’s initiatives to compete with Chinese tech companies would likely be retained in some form:

But experts expect President Biden’s China strategy to look like a more polished and multilateral version of Trump’s as his team pushes forward a slew of policies aimed at curtailing the power and influence of Chinese tech companies in the U.S.

“Biden is most likely, on the technology front, going to keep things the way the Trump administration has made them,” said Abishur Prakash, a geopolitics expert at the Center for Innovating the Future. “Whether it’s regarding Alipay, whether it’s regarding TikTok, whether it’s regarding Chinese STEM students — across the board holistically, there’s not a lot of space for change.”

[…] The Biden approach to Chinese technology issues will be different than Trump’s in at least one key area: Biden officials have said they plan to work with other Western democracies to create a united front against China’s influence. “Whether the techno democracies or the techno autocracies are the ones that get to define how technology is used — the technology that dominates all of our lives — I think is going to go a long way to shaping the next decades,” Anthony Blinken, who was confirmed Tuesday as secretary of state, said last week. [Source]