That’s what the editors over on The Wall Street Journal calls President Joe Biden’s (D) move to bar US investments in certain People’s Republic of China technologies and enterprises.
President Biden’s executive order on Wednesday restricting US investment in Chinese military technologies tries to balance national security and business interests. The problem is that Beijing doesn’t distinguish between the two, which is why business risk in China is rising.
This is the fallacy of the editors and of Biden: since the PRC does not distinguish between national security interests and business interests—does not separate out military utility from civilian utility—when it comes to technology there is no balance for our government to seek. All tech, in the PRC’s eyes, has military utility, therefore all tech American businesses and those of our friends and allies might sell or otherwise transfer into the PRC has military utility, and all such American sales and transfers should be barred, and those of our friends and allies should be jawboned against. The transfers threaten our national security as well as that of our friends and allies.
The White House concern is that the Communist Party will weaponize US venture and private-equity investment in technologies such as artificial intelligence.
In a heartbeat the CPC will. Biden’s bar reflects some understanding of PRC President Xi Jinping’s avowed goal, which he facilitates by eliminating
barriers between civilian and commercial sectors and military and defense industrial sectors, not just through research and development, but also by acquiring and diverting the world’s cutting-edge technologies, for the purposes of achieving military dominance.
But then Biden shied away from taking the full step.
open global capital flows create valuable economic opportunities and promote competitiveness, innovation, and productivity.
Auto makers will still be able to invest in Chinese self-driving systems. Drug makers can join with Chinese companies to develop new drugs.
Never mind that self-driving technology has obvious uses in the PLA’s mechanized/armored ground forces, the PLA’s air forces, the PLA’s naval forces. Never mind, either that the tech used in developing new drugs supports the PLA’s ability to develop drugs for treating PLA diseases and casualties and to develop drugs and other biologics for offensive use.
The editors join him in that failure to follow through:
A complete de-coupling of the US and Chinese economies probably isn’t possible, or desirable, given their interdependence.
Yes, it is, and it’s more than desirable, it’s critical to our national economic and military security, and so to our political security. There will be some economic disturbances as our businesses relocate their supply chains—from ore and minerals in the ground up through final assembly components and end products—out of the PRC, and there will be some economic disturbances as our businesses buy and sell technologies with other customers than the PRC. Those temporary disturbances, though, need to be balanced against the long-term costs of being dominated by the PRC.
There’s no tightrope here, except in Biden’s timidity.