Usa-China, hegemony and technological superiority

From her first day in office, President Meloni has recognized that the U.S. deep state has only one strategic mission: to counter China's hegemonic rise by reaffirming the U.S. based on a liberal order, rules, and values. Hegemony is a complex mix of economic, political, cultural, and military factors. When the last factor prevails, hegemony results in imperialism. According to all analysts, China's strategic moves in recent years are aimed at challenging U.S. hegemony. The "belt and road" and "global security" initiatives are the most visible external actions in the economic and political spheres necessary to create a Chinese zone of influence targeting emerging and african countries and seeking to divide costantly the Western front.

Throughout history, hegemony has been marked by a crucial factor: technological superiority, a prerequisite for economic and military dominance. Presently, being a global leader in digital technology allows a country, among other benefits, to integrate its companies' systems into critical infrastructures of other nations. At the same time, these critical infrastructures require to procure such technology to stay competitive. Apart from potential access to sensitive data, this hegemonic power gains coercive capabilities that could bring an entire country to a halt merely by cutting off the supply of technology. The risk becomes more pronounced when the distinction between government and national technology companies blurs like in China. That's why, for instance, the United States has long endeavored to eliminate Chinese technology from its telecommunications networks through import bans and substitution incentives.

Unlike the Cold War era, where the U.S. and the Soviet Union maintained sharp division and limited trade relations, the U.S., championing globalization, has integrated its economy with China's, becoming a partner in numerous global supply chains, as Treasury Secretary Yellen recently highlighted. China has emerged as a leading high-tech nation through offshoring and its massive domestic market, giving rise to industrial giants across sectors. Controlling several global technology supply chains, such as rare earths, and actively participating in international standards committees, China is shaping the future tech market. Its vested interest in technology stems from efficient citizen monitoring and safeguarding national interests with an advanced military, as stated by Xi Jinping.

To counter Chinese technological advancements, the U.S. has identified the latest generation of microchips as China's weakest link. In this supply chain, China's role is limited to final assembly, while upstream production occurs within a few companies based in the U.S., South Korea, Japan, Taiwan, and the Netherlands, each zealously guarding their know-how. The U.S. has initiated restrictions on selling strategic assets to Chinese firms, limited technology exports, and prohibited the transfer of individuals with specific technological expertise to China. Notably, U.S. allies have also imposed export restrictions on China, given China's advancing domestic market protectionism, assertive stance on Taiwan, and ambivalence towards Russia's invasion of Ukraine.

Given these constraints, even for a nation like China with abundant economic and human resources, catching up in next-generation microchips is challenging. The U.S. is determined to maintain its lead until it secures superiority in quantum computers. However, over-restricting microchip exports to China could curb innovation by Western companies, favoring China in closing the gap. To accentuate this curb, China has imposed export restrictions on germanium and gallium, materials vital to microchip production and where China holds a near-global monopoly. However, China will also have to handle such restrictions carefully, as a lack of chips on a global scale would first affect its domestic market. This intricate scenario with both countries as system partners and rivals engenders a race with unpredictable global effects.

Amid this struggle for world order, Europe is empowering itself with (necessary) anti-coercion measures and plans to decrease technological dependence such as the Chips-Act, while waiting for a closer EU political integration, as indicated by Draghi, to take a leading role also in this scenario. In the meantime, it is worth keeping in mind that European values and interests align to a large extent with American ones, a diriment issue especially for Italy in times of treaty renewals.