In his first press conference as president last month, President Biden said that his administration’s approach to China was not confrontation but “steep competition.”

And for all the challenges the U.S. faces in dealing with a country that is now an economic superpower, and increasingly confident — so much so that at a meeting in Alaska a few weeks ago, Yang Jiechi could use America’s own racial tensions to criticize an American delegation led by Secretary of State Antony Blinken — this “steep competition” is still America’s to “win.” The U.S. continues to have enormous advantages in many critical technology sectors, and China’s system is plenty capable of self-inflicted wounds.

One case in point is semiconductors.

It’s old news that semiconductors are at the tip of this steep competition. China plans to invest more than $1.4 trillion over the next five years to reach some level of self-sufficiency. Meanwhile, the U.S. is pushing American companies to rebuild chip manufacturing capabilities at home, and reduce reliance on TSMC or Samsung. (Intel finally heeded the call by announcing a $20 billion investment.) The recent global chip shortage further amplified the importance of semiconductors beyond the U.S.-China bilateral paradigm.

The U.S. still firmly holds the upper hand in this fight. As I’ve described in a previous column, the complex life cycle of a chip can be roughly broken down into four stages: acquire raw material, design chips, combine designs to production capabilities, and mass manufacturing at scale. Multiple rounds of U.S. sanctions have focused on stage three — preventing American makers of high-precision manufacturing equipments, based on electronic design automation (EDA) technology, from selling to China directly or indirectly as a way to prevent it from being used for Chinese-designed chips. European equipment makers have also been informally sanctioned through diplomatic pressure, most notably the Dutch company, ASML. These measures have been effective in hobbling China’s domestic chip leaders, like Huawei’s HiSilicon. 

Meanwhile, China’s own attempts to reproduce the semiconductor supply chain have been full of froth and embarrassing failures. The most egregious example would be the Wuhan Hongxin Semiconductor Manufacturing (HSMC), China’s “semiconductor Theranos.” In a matter of three years, HSMC attracted more than $2 billion worth of investments from Wuhan’s East-West Lake District Government. It lured the founding chief technology officer of TSMC, Chiang Shang-Yi, to become its CEO. And it acquired a coveted lithography machine from ASML. Then it went bust. 

Semiconductor fabs are ripe targets for scams — low risk, high reward, too complicated for most people to understand, and too embarrassing to investigate if a project fails.

As 36Kr and other Chinese media outlets exposed, the project was a heist executed by a trio of scammers, who knew nothing about technology (let alone semiconductors) but saw the chance for a quick, fat payday. When the central government wants something, the local governments are eager to “deliver.” In fact, semiconductor fabs are ripe targets for scams — low risk, high reward, too complicated for most people to understand, and too embarrassing to investigate if a project fails.

This isn’t to say that all the new semiconductor upstarts in China — now close to 60,000 — are all scams. Some will make real breakthroughs, and there will be no shortage of capital to fuel their development. But the chilling effect of HSMC cannot be understated, as exemplified by ASML painstakingly distancing itself from SMIC (the country’s largest chip foundry) after a recent equipment purchase disclosure.

Of course, this doesn’t mean the U.S. has nothing to worry about. The hollowing out of America’s semiconductor manufacturing capabilities is a real problem. Still, no American company will have trouble acquiring the best equipment, the best people, or the necessary raw materials (at least not yet). They do need to spend the money and do the work.

America’s problem is mostly a money and priority problem. China’s challenge is the kind that money can’t buy to solve, no matter how clear the priority is.

Internationally, the U.S. has expressed some of that priority by formalizing the “Quad” and introducing the Quad Critical and Emerging Technology Working Group. If this relationship evolves into tangible collaboration, each Quad country brings some unique strengths — Australia: raw materials; Japan: advanced manufacturing; India: mass production and young technical talent; the U.S.: intellectual property, cutting-edge R&D, some best-in-class products.

Domestically, the Biden administration’s $2.3 trillion infrastructure plan is the clearest articulation yet of priorities at home. Most of the money will go to retro-fitting projects that should’ve been upgraded a long time ago, but the plan does include building 500,000 new EV charging stations. 

Partisan gridlock has been damaging America’s prospects, not unlike HSMC has underscored one of China’s weaknesses. But if, for once, Congress can see infrastructure upgrades and technological advancement as the same challenge — and one with global implications — then this “steep competition” is still America’s to “win.” (China will be a factor in efforts to persuade Congress and the American public; the White House fact sheet refers to an effort to “out-compete China” in its first paragraph.)

I’ve been using the word “win” in quotes throughout this column intentionally, because I don’t think there is any real “winning,” regardless of whether it’s the U.S. or China that comes out on top. If this competition is only understood in zero-sum terms, it will only slow the progress of humanity as a whole.

Instead of the best and brightest from the U.S., China, India, Russia, and every country in between working together on solving species-threatening problems — climate change, viral diseases — or tackling technology’s next frontier — quantum computing, space travel, biotech — a lot of financial and human resources will be poured into “recreating the wheels,” as Moore’s Law approaches its limit. 

I’m not naive about the challenges that arise when countries are adversarial towards one another. Problems like cyber attacks, corporate espionage, and tech-enabled human rights abuses must be at the top of any diplomatic or technology policy agenda. Creating supply chain redundancy is also worthwhile, to an extent, to prevent disruption and increase resilience. 

But we inhabit a world more interconnected than ever before, where positive-sum opportunities are aplenty. An over focus on any zero-sum competition, regardless of who “wins,” will produce one sure loser: humanity itself.

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