The Economic And Tech Race

The Long Path to U.S.-China Tech Competition

James A. Lewis

Senior Vice President, Pritzker Chair, and Director, Strategic Technologies Program

Ultimately, nuclear-armed countries will be cautious in their use of force in any competition, which means that power does not come from the barrel of a gun, no matter how technologically advanced that gun may be, but from the persuasiveness of a nation’s ideas.

Competition with the West shapes modern China. The story of this competition begins with China’s last great emperor, the Qianlong emperor (who abdicated in 1796), after rejecting commercial ties with an emerging Great Britain, saying Britain had nothing China needed. It was 153 years before China had another leader strong enough to engage confidently with foreign nations. Mao Zedong reforged China into a single, powerful state, but his ideology ultimately impoverished it. When his successor Deng Xiaoping took power, he found a China that was weak and backward. Deng was determined to remedy this.

China’s ambivalent relationship with the West is built on a long tradition that dates back to Qianlong and the shock of defeat in the Opium Wars. China began to modernize and “Westernize” its economy in the nineteenth century. So did Japan, but while Japan succeeded, China did not make progress until Deng. Deng’s solution was to open China to the West to stimulate its indigenous technology base and commercial capabilities. This was not yet a competition, but the West — particularly the United States — was and is the yardstick by which China measures its progress, comparing the number of PhDs or patents issued and, above all, the size of national incomes.

China’s opening came at a favorable time in U.S. foreign policy. Still recovering from defeat in Southeast Asia, the United States, under President Jimmy Carter and his national security adviser, Zbigniew Brzezinski, saw China as a counterbalance to an assertive and powerful Soviet Union. They began to selectively strengthen Chinese military capabilities, selling, among other things, advanced torpedoes, laser-guided artillery shells, and Black Hawk helicopters, while permitting increased commercial ties. The transfer of military technology ended abruptly with the Tiananmen Square massacre, but commercial ties continued to expand and created a giant and deeply interconnected technology base. Some Americans, seeing China’s rise, even hoped China would become a responsible partner that the United States could guide, much as Great Britain had envisioned itself guiding an emerging United States a century earlier. But competition, not partnership, best describes the U.S.-China relationship today.

Ironically (since it was ultimately infeasible), Ronald Reagan’s “Star Wars” Strategic Defense Program frightened China into thinking it would fall behind in technology and never catch up unless it made enormous investments in research and used any means to acquire technology from the West. There is an illicit aspect to China’s growth, given its massive espionage campaigns, its use of intellectual property (IP) theft (something that predates the 1949 revolution), and its predatory commercial practices. China does not respect rules for trade and IP protections. Optimistic Westerners hoped this would change as China matured and adopted global norms of commerce, but China felt that espionage and IP theft were justified by the “century of humiliation” inflicted by European imperialism and by the need to grow to ensure this never happened again.

There are precedents for this competition. The Kitchen Debate between Soviet premier Nikita Khrushchev and then vice president Richard Nixon in 1959 was not over who had the best technology or which country made the best toaster; it was over which economic model — markets or Marxism — performed best for citizens. If the debate were held today, the likely winner would be the European Union, whose citizens receive better services than those provided by either the United States or China. But the strategic focus is on economic growth and innovation, not welfare, and the United States and China see themselves engaged in an intense technological contest.

The 1960s space race is another precedent. Americans panicked when the tiny Sputnik appeared overhead in 1957. The “Sputnik moment” led to massive U.S. investments in science. The Kennedy administration followed this by setting the goal of reaching the Moon first. The benefits of international influence and the military implications of a lunar landing were clear. The immense spending to get to the Moon, combined with the scientific and technical investments made in response to Sputnik, laid the foundations for the U.S. high-tech economy.

The United States had no Sputnik moment with China; in fact, until recently, it had the reverse. In the early 1990s, the United States cut government investments in science and research built up over the Cold War as no longer necessary. For 25 years after the Cold War’s end, the United States coasted, comfortable in its supremacy. It did not regard China as a competitor, even as China embraced competition. China’s rise and the assertive policies of President Xi Jinping have shaken U.S. confidence and ignited competition in many ways centered on technological leadership.

If anything, Xi was premature in proclaiming China’s inevitable rise, as this prompted the United States to reinvest in science and restrict technology transfers to China. China still has one great advantage in the new contest compared to the Soviets. Its deep interconnection with Western economies means it can participate in global markets to sell, buy, and seek financing in ways the Soviets never could. These market connections mean the competition with China is not a replay of the Cold War, where bifurcation between East and West meant there was little exchange of capital or ideas, and Cold War policies, like export controls, will not work as well in this profoundly interconnected environment.

The terms of competition are muddled by analytical shortcomings. There is a tendency among Western analysts to explain complex economic phenomena in terms of a single technology. But a single technology, whether chips or artificial intelligence (AI), does not determine the course of complex and intricately interconnected economies. Just as with the Kitchen Debate or the space race, this is competition between economic models and the political system behind them, not a tech arms race. This competition of models will determine whether China or the United States will be more powerful as a result of the economic growth and technological advances innovation creates.

In this new competition, the United States has many advantages, but it faces a major obstacle. In China, the Chinese Community Party’s desire for control, Xi’s affirmation of Marxism, and the accompanying recentralization of economic activity will inevitably slow China’s growth and its ability to innovate, as will a growing global reaction to China’s predatory practices. Disarray in Washington does not bode well for U.S. competitiveness, but even a relative U.S. decline does not mean China’s rise. There is more to power than being seen as ahead in technology, and China lacks compelling ideas for global leadership.

But political disarray undercuts U.S. strength. Technology leadership is just one of the global competitions facing the United States: there is one with China, another with emerging, powerful economies that reject the old U.S.-led global order, and one with dogmas on both left and right that undercut the ideas that create the political climate where innovation can flourish. U.S. politics is going through another chapter of the partisan disputes that make Congress dysfunctional, threatening the culture of innovation and science that underpins U.S. strength. American success in a battle of ideas is not guaranteed, and massive defense budgets do not compensate for this. Ultimately, nuclear-armed countries will be cautious in their use of force in any competition, which means that power does not come from the barrel of a gun, no matter how technologically advanced that gun may be, but from the persuasiveness of a nation’s ideas.

The Technology-Driven Economic Security Agenda

Emily Benson

Director, Project on Trade and Technology, and Senior Fellow, Scholl Chair in International Business

A profound shift in trade, technology, and security policy is underway. This has resulted in an increasingly technology-driven economic security policy that has reshaped strategic competition and infused geopolitical risk into commercial considerations.

Globalization is changing in profound ways. Bilateral trade and investment between the United States and China declined over 15 percent in 2023, down significantly from record highs the previous year. The International Monetary Fund, meanwhile, forecasts slowed trade growth in 2024. The U.S. economic outlook is poised for a soft landing, but major partner economies, such as Germany, are now definitionally in recession. Geopolitical currents — once a background rhythm of the globalized economy — have moved to the forefront of trade and economic relationships. The concurrent three Cs — Covid-19 fallout, tensions with China, and mounting climate change pressure — have led countries and companies alike to reassess the resiliency and vulnerability of their supply chains. The proliferation of advanced technology promises further disruptions to trade as we know it.

In October 2022, the United States levied relatively broad export controls on advanced artificial intelligence (AI) chips to China, signaling a move away from an end user–based system of export controls that had characterized an era of economic détente in the 1990s toward a new era of technology-driven national security. In restraining chip flows to China, the United States moved semiconductors to the forefront of trade policy, securing buy-in from Japan and the Netherlands.

The United States is also considering screening outbound investment. In August 2023, the White House published an executive order directing the Department of Treasury to stand up an outbound investment screening system that functions as a notification regime. This regime will provide greater clarity on the volume and nature of U.S. capital and knowledge flows to China in AI, quantum technology, and semiconductors that could be used in military contexts.

Concurrent with an expanded national security trade tool kit, the United States and its close partners have sought to build more secure supply chains, particularly throughout the semiconductor sector. Building secure semiconductor supply chains presents considerable challenges. First, export control parity is critical for deeper cooperation since export controls function as a prerequisite to scaling up production. In short, in jurisdictions where the United States believes the risk of technology leakage to China is significant, the United States will not increase investments in sensitive technologies. Second, the United States and its partners must work together to offset some of the costs associated with expanded export controls. For now, the administration maintains the security benefits outweigh the associated economic costs.

Foreign technology producers such as the Netherlands have signaled a willingness — if not enthusiasm — to engage with the United States on export controls. Peter Wennink, outgoing CEO of Dutch chip champion ASML, has said that additional restrictions on exports to China will not significantly harm the company since it can find alternative buyers and maintain a sizable backlog. However, finding a country with a developed tech sector, a highly skilled workforce, and sufficiently strict trade controls could prove challenging. The U.S.-Japan bilateral efforts to accelerate two-nanometer chip production in a Rapidus-IBM joint effort underscores the alignment of several enabling factors, which include similar export control rules, a highly skilled labor force, and a stable business environment.

Traditional trade policy would typically assist in offsetting some of these costs by codifying trade facilitation measures and making the exchange of goods and services more efficient. However, the era of traditional trade has been supplanted by an era of “weaponized interdependence” and economic security, and this environment is unlikely to change in the short to medium term. Together with allies, the United States should work to craft rules for this new form of globalized interdependence in which supply chain security will increasingly drive economic policy. New rules must focus on export control and investment screening cooperation but must go a step further in institutionalizing cost offset mechanisms like the U.S.-Japan deal.

At the international level, these new rules could emanate from a new architecture that evolves out of an expanded G7 with a secretariat. An expanded G7 could include Australia and the Republic of Korea. This would grow the economic might of the bloc while identifying opportunities to follow through on building more resilient supply chains. This new architecture could also create clearer guidelines for the rules of engagement at the supply chain and national security nexus, which no other economic institution is currently capable of managing.

At the domestic level, the United States must ensure the effectiveness of its economic statecraft tools. The United States and its partners continue to move toward an environment dominated by geoeconomics, and economic weapons have reemerged as a prominent feature of the U.S. strategic tool kit. However, unlike the use of kinetic warfare, for which there are clearly established guidelines — a targeting doctrine, a firehose policy, and collateral damage minimization efforts — the U.S. government lacks those tools for economic warfare.

A profound shift in trade, technology, and security policy is underway. This has resulted in an increasingly technology-driven economic security policy that has reshaped strategic competition and infused geopolitical risk into commercial considerations. This has manifested in expanded use of trade and investment controls alongside concurrent efforts to retool supply chains.

To better weather these systems-level changes, the United States and its partners must continue to deepen cooperation on export controls. Yet, controls are insufficient in bolstering security in the long run. As partners pursue industrial policies related to advanced technologies, identifying policy goals at the outset and working toward transparency in implementation will be critical. The United States and its allies have made tremendous progress in advancing a new agenda, and it now falls on partners to follow through.

A Trade Policy for the Twenty-First Century

William A. Reinsch

Senior Adviser and Scholl Chair in International Business

Getting trade policy right has always been complicated. . . . It appears the United States is once again at an inflection point where a growing number of experts are calling for major change.

The post–Cold War world order is over, and a new era of geoeconomic and tech competition is underway. Leveraging trade tools to assure the nation’s competitiveness on the global stage will be critical to U.S. foreign policy in the twenty-first century. In tandem with renewed competition, populism is now a defining feature of political landscapes at home and abroad. This shift has yielded efforts to formulate an equitable, worker-centered trade agenda. Policymakers will need to carefully balance today’s new geopolitical reality with domestic pressures to further prosperity and assure security.

Getting trade policy right has always been complicated. Macroeconomically, trade is a win-win situation: it produces more jobs and growth for all parties to an agreement. Microeconomically, however, trade produces winners and losers as some thrive in a more competitive environment and others flounder. The latter blame their problems on imports, and sometimes they are right. Trade creates gains but it does not always distribute them — that depends on tax and education policies, among others. Despite international trading rules against a wide range of unfair practices like dumping and subsidization, some countries cheat, and even when they are caught, relief is often too little, too late. More often, however, the real culprit is technological change and productivity improvement that domestic industry has trouble matching. Sorting out the actual problems and devising a policy of effective solutions has proved difficult and, in the past, led to significant policy debates. It appears the United States is once again at an inflection point where a growing number of experts are calling for major change.

Until recently, U.S. trade policy since World War II has had two pillars: promote free trade and improved market access and create and maintain rules and structures that support an open rules-based trading system. That policy has produced enormous benefits for U.S. exporters in various sectors. U.S. exports of manufactured goods reached nearly $1.4 trillion in 2019, and exports of services reached nearly $850 billion that year. About 25 percent of U.S. farm products by value are exported each year. However, recently, U.S. trade policy has led to complaints that benefits have accrued primarily to large companies and their executives, not to workers. The complaints have, in turn, led to calls for a “trade policy for workers” or a “trade policy for the middle class.” As with many new ideas, exactly what those terms mean remains to be fleshed out. At this juncture, they appear to mean enforcing existing rules rather than creating new ones, reallocating benefits away from corporations toward workers, bringing manufacturing back to the United States, avoiding market access concessions, and pursuing a variety of inclusivity and sustainability goals.

Implementing this more idealistic policy faces three challenges. First, it will encounter resistance from trading partners still comfortable with a more traditional approach that focuses on tangible benefits: increasing market access, reducing trade barriers, and refining the rules. Second, world events — notably the Russian invasion of Ukraine and an increasingly aggressive China in the Indo-Pacific — have conflated national security considerations with trade policy. Finally, shortages caused by the Covid-19 pandemic, coupled with security concerns, have refocused policy attention on supply chain resilience rather than on production efficiency.

Constructing a coherent policy that addresses those challenges has been made more complicated as some developing countries and authoritarian states push alternative narratives that challenge current rules and institutions and exacerbate the divide between developed and developing nations. Reconciling these differences may be impossible in the short term, but if the United States is to maintain its position of global leadership and grow its economy, it needs to try. With 95 percent of the world’s consumers outside U.S. borders, promoting trade is essential for future growth. Trade’s ability to lower costs and increase efficiency is also essential to meeting other global challenges like climate change. The following suggestions may help move policy forward.

The United States should recognize that while the old Washington Consensus on free market economics is fading, a new consensus has yet to develop, and not all countries are ready for a more idealistic approach. Trade negotiations remain grounded in the search for tangible benefits. Countries are interested in what is in it for them, and the United States is no exception. A successful policy is one that provides opportunities for mutual gain.

1. The United States can make progress on its inclusivity and sustainability goals only if it is prepared to accommodate the goals of other countries, primarily developing ones, which will require rethinking on the part of current stakeholders.

2. Companies must recognize that in a more transparent world increasingly sensitive to long-standing inequities, trade policy should include support for worker rights, human rights, environmental sustainability, and other social goals. Governments will require more attention to these issues, and consumers will demand it.

3. Trade skeptics must recognize that trade is a two-way street and that accomplishing their goals will require U.S. market access concessions. Moreover, they must acknowledge that trade is as much about exports and economic gains as it is about imports and potential losses.

4. Other countries must recognize that increased access to developed country markets in Europe and the United States is not a right but an opportunity that requires reciprocal concessions on their part. There is no free lunch — for them or for us.

5. The best approach is to work within a rules-based framework that imposes discipline on miscreants. The United States has long been a strong supporter of the World Trade Organization and should continue to support the institution, its rules, and its dispute settlement process. At the same time, centrifugal forces in the trading system are making multilateral agreements much more difficult to reach. The United States should not give up on multilateralism but should also pursue plurilateral and bilateral agreements with countries willing to make more ambitious commitments.

While trade accelerates economic change, policy change comes more slowly as nations cling to past practices and resist politically risky innovations. The most successful policy will avoid making the perfect the enemy of the good and will attempt to accommodate other nations’ political and economic imperatives while simultaneously pushing them forward on ours.

The Semiconductor Challenge

Sujai Shivakumar

Director and Senior Fellow, Renewing American Innovation Project

The future competitiveness and security of the United States depends on doubling down on a strategy that supports a strong domestic innovation system that is also internationally connected and resilient.

The world runs on semiconductors. They underpin every aspect of modern life, mediating the way people work, consume, and communicate. Banking, transportation, and other public platforms run on computers. And with advances in artificial intelligence and other emerging technologies, semiconductors will become significantly more pervasive. Leadership in semiconductor technology is, therefore, essential for the United States to maintain its prosperity, competitiveness, and national security. Securing this leadership, in turn, depends on staying on top of three major dynamics — technological, logistical, and geopolitical — driving change in semiconductor technology.

Moore’s law, which in its most general statement anticipates that the number of transistors on a microchip doubles every two years, drives the first dynamic. Firms in the semiconductor and other advanced technology industries expect the speed and capabilities of chips to not only keep increasing but also to do so at an ever-lower cost. With all the advances gained since the late 1960s expected to double over the next two years and then double again two years later, the pace of change is now rapidly accelerating. New computing capabilities will open new technological possibilities, many of which will disrupt existing social, commercial, and political networks. In turn, business leaders, policymakers, and civic entrepreneurs will have to craft new institutions to govern these new shared commons while also allowing innovation to thrive.

At the same time, as researchers approach the limits of subatomic physics in their quest to cram more transistors into a microchip, the end of the classical definition of Moore’s law might be near. Even so, the growth of capabilities and drop in the cost of semiconductors are expected to continue, driven by innovations in chip design and in the assembly and packaging of semiconductor devices. These innovations will continue to drive economic growth and productivity across the swath of industries that make and use advanced technologies.

The need to address vulnerabilities in the globally integrated networks of chip research, production, and distribution drives the second dynamic in semiconductor technology. The relatively mild disruption in chip production during the Covid-19 pandemic created multiple downstream ripple effects, halting some auto production, which relies on critical electronic components, and, in turn, affecting inputs to construction and other industries. This was a wake-up call to how critical a secure supply of semiconductors is to the U.S. economy.

Of further strategic concern is the geographic concentration of chip production in East Asia. Taiwan manufactures some 90 percent of the world’s advanced semiconductor chips. More generally, 75 percent of semiconductor production now takes place in East Asia. Conflict or even a major earthquake in the region could severely disrupt the world’s semiconductor supply, inflicting severe damage to economies across the world.

The semiconductor industry is now in the process of rewiring itself to be less susceptible to single points of failure and other weaknesses in the value chain. In support, the 2022 CHIPS and Science Act in the United States and comparable policies in Europe and Japan seek to strengthen domestic production and create more resilient global research, production, packaging, and distribution networks. This adaptation is taking place even as demand for semiconductors is expected to soar. The global semiconductor industry, already massive, could grow by 80 percent within a decade to exceed $1 trillion, according to analysis by McKinsey. For the United States to remain a leader in this industry, a substantial and sustained buildup of the physical, research, financial, and skills infrastructure will be required, as well as creative collaborations with both traditional allies and new strategic partners.

China is the final dynamic driving change in the semiconductor industry. China was a deeply connected part of the global semiconductor network that grew over the past several decades of relative geopolitical calm. While China has now emerged as a commercial and geopolitical rival, major elements of that integration remain in place, with a significant portion of second- and third-tier suppliers for the semiconductor industry still found in China today. China also remains a major market for semiconductors, accounting for about a third of worldwide final sales. This mutual dependency does not allow for rapid decoupling. Instead, new investments — driven by rising global demand for semiconductors and supported by national policies and alliances — will in time shape the evolution of semiconductor networks that are more resilient to Chinese actions.

Meanwhile, the United States is limited in how it can deny or delay China’s ability to acquire or develop advanced semiconductor technologies. Recent restrictions on advanced chip making equipment have affected some Chinese capabilities. But these actions have also intensified China’s efforts to boost domestic innovation while reducing imports from U.S. firms. Such reductions have cut the revenues of U.S. firms and hence their ability to invest in the next generation of technology. Their Chinese counterparts, by contrast, do not depend on market forces to survive. Indeed, the Chinese national and regional governments are already providing large subsidies to encourage domestic firms to pivot toward innovation and production in higher-node chips.

The convergence of these three dynamics — Moore’s law and beyond, ongoing adaption to improve resiliency, and the new chip war with China — finds the global semiconductor industry on which the world’s economy turns at a perilous moment. The future competitiveness and security of the United States depends on doubling down on a strategy that supports a strong domestic innovation system that is also internationally connected and resilient. In this light, the CHIPS and Science Act must be seen as an initial down payment on a strategic long game.

Charting a Path between Competition and Cooperation on Climate and Energy

Joseph Majkut

Director, Energy Security and Climate Change Program

Ben Cahill

Senior Fellow, Energy Security and Climate Change Program

Ilaria Mazzocco

Senior Fellow, Trustee Chair in Chinese Business and Economics

China is at the heart of a key challenge for the United States in the energy transition. Faster deployment of renewable energy based on Chinese technology could cede long-term advantages to a key geopolitical competitor.

In 2024, how will the actions of the United States and China affect the global energy future? The debate in Washington has been to what extent the two countries should seek to accomplish shared goals through cooperation or competition. Yet an approach that moves beyond cooperation or competition and combines both coherently could help achieve a more secure and cleaner energy future.

Individually, the two countries have complementary strengths and routes to global influence. After the shale revolution, the United States became an energy powerhouse. The country produces more oil and gas than ever before and has become a significant exporter of crude oil, petroleum products, and liquified natural gas. With bountiful resources, the United States has secure energy supplies and falling domestic emissions, much of it from replacing coal with natural gas.

China is in another situation. Dependent on liquid fuel imports and highly dependent on domestic coal, China has moved strategically to become a manufacturing powerhouse for critical minerals, solar, wind, batteries, and electric vehicles (EVs). As the world looks toward an energy transition, much of the critical materials and processing capacity will reside in China. Yet the sheer size of China’s economy and its continued reliance on coal has meant that even as it deploys more renewables than its peers and economic growth is slowing, its emissions have continued to rise.

Chinese demand and U.S. supply are two of the key variables in the global oil market. Robust supply outside the Organization of the Petroleum Exporting Countries (OPEC), especially from the United States, kept oil prices subdued in 2023 despite strong demand growth in China and globally. In 2024, it seems more likely that China’s economic slowdown will dampen its oil consumption. Oil market observers will closely monitor China’s crude imports, its use of domestic inventories, and its refined product exports for signs the country is making more overt efforts to manage the market and leverage its status as the world’s largest importer. In the United States, the two key questions will be whether the shale patch can again outperform expectations and how the Biden administration might manage a run-up in gasoline prices as elections approach. Macroeconomic trends in both countries are essential parts of the oil market story and will continue to be so in 2024.

On climate, cooperation between the two countries has waned in recent years. The combined commitment of the United States and China allowed the Paris Agreement to set truly global climate goals in 2015. Last fall, just ahead of the 2023 United Nations Climate Change Conference (COP28), the two countries signed the Sunnylands statement to express their mutual commitment to increasing their ambitions for meeting the goals of the Paris Agreement. The agreement marked a renewal of official climate cooperation, but while a welcome development, this approach can deliver only so much. There are fewer straightforward areas of bilateral cooperation on climate compared to just a few years ago. As a result, much of the recent effort has focused on technical issues, and another political breakthrough seems far off. Moreover, Chinese special envoy for climate change Xie Zhenhua has now retired, and U.S. special presidential envoy John Kerry is headed for retirement as well. The case for cooperation risks retiring with them.

Meanwhile, competition between the two countries is rising. China has introduced export controls on gallium, germanium, and graphite — minerals important for security and energy technologies. Further restrictions on technology for refining rare earths have been announced. In the United States, the Bipartisan Infrastructure Law and Inflation Reduction Act (IRA) are designed for competing with China as well as for reducing emissions. New subsidies for manufacturing clean energy technology in the United States are leading to significant domestic investment, but Chinese dominance in those supply chains means more political fights over the licensing of Chinese technology by U.S. firms and Chinese foreign direct investment in clean energy. Green protectionism seems ascendant. The United States already levies a 27.5 percent import tariff on Chinese EVs but is considering raising them in 2024 to forestall imports via Mexico. Europe is also responding to the looming market dominance of low-cost EVs from China through an antisubsidy investigation. Further, proposals to raise carbon border charges on Chinese imports, inspired by the European Carbon Border Adjustment Mechanism, are gaining popularity on Capitol Hill. China is adamantly opposed to such measures, portending larger trade conflicts.

China is at the heart of a key challenge for the United States in the energy transition. Faster deployment of renewable energy based on Chinese technology could cede long-term advantages to a key geopolitical competitor. Capturing more investment and prioritizing local content have clearly made climate policy saleable to a broader constituency in the United States but could slow the transition on the margins. Nearly every country planning for the transition faces this same challenge, but the stakes of the U.S.-China relationship make it more severe.

This is where a new characteristic of the U.S.-China relationship may emerge. One of the most interesting parts of the Sunnylands statement is the pledge from each country to support five large-scale projects for carbon capture, utilization, and storage (CCUS) by 2030. The countries share a goal of reducing global emissions. CCUS is a technology that can accomplish this directly by capturing carbon where there is too much of it and storing or using it elsewhere. To deploy it at scale, the United States and China do not need to cooperate or compete, share technology or finance tools, or spurn each other; they simply need to both deploy it. By acting coherently, they can address global problems without overly advantaging one or the other. This will require agreeing on the rules of the game, including discussing and agreeing on global standards in a variety of areas, among other things.

Together, the United States and China are a powerful economic and geopolitical duo. The countries host the world’s two largest economies and are jointly responsible for 43 percent of carbon dioxide emissions from burning fossil fuels. Their economic trajectories shape global markets, and the world cannot adequately address climate change without both countries finding a path to reduce emissions. The United States and China are also important as leaders in technology, innovation, and global politics. The choices these two countries make about how to invest in energy systems and how much to prioritize reducing emissions set technology trends and reverberate with firms, financiers, and foreign governments.

James Andrew Lewis is senior vice president, holds the Pritzker Chair, and directs the Strategic Technologies Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. He leads a long-running track 2 dialogue with the China Institutes of Contemporary International Relations. His current work looks at how countries innovate and at digitalization and its political, economic, and security effects.

Emily Benson is director of Project on Trade and Technology, and senior fellow of Scholl Chair in International Business at CSIS, where she focuses on trade, investment, and technology issues primarily in the transatlantic context.

William Reinsch holds the Scholl Chair in International Business at CSIS. He is also an adjunct assistant professor at the University of Maryland School of Public Policy, teaching a course in trade policy and politics.

Sujai Shivakumar directs the Renewing American Innovation (RAI) Project at CSIS, where he also serves as a senior fellow. Dr. Shivakumar brings over two decades of experience in policy studies related to U.S. competitiveness and innovation.

Joseph Majkut is director of the Energy Security and Climate Change Program at CSIS. In this role, he leads the program’s work understanding the geopolitics of energy and climate change and working to ensure a global energy transition that is responsive to the risks of climate change and the economic and strategic priorities of the United States and the world.

Ben Cahill is a senior fellow in the Energy Security and Climate Change Program at CSIS. He covers oil markets, geopolitics, and macro trends affecting the oil and gas industry. He leads several research initiatives on methane emissions and global gas, and he analyzes how national oil companies are responding to the energy transition.

Ilaria Mazzocco is a senior fellow with the Trustee Chair in Chinese Business and Economics at CSIS.

Craig Cohen is executive vice president at CSIS. In this role, he serves as deputy to the president and CEO, responsible for overseeing and helping to achieve all aspects of the Center’s strategic, programmatic, operational, outreach, fundraising, and financial goals, including recruitment of new program directors to CSIS.

Alexander Kisling is vice president of communications at CSIS, where he works alongside the chief communications officer to direct the Center’s press, digital and social media, and other external engagement efforts. He also oversees the Center’s broadcasting and publications functions.