It isn't just trade where China has been beating the U.S. over the last decade.
In fact, those who have been paying attention have surely noticed that the U.S. is now trailing behind China in numerous technologies, like 5G networks, drones, batteries, solar energy and cryptocurrency.
The role of private the private tech sector in the U.S. is becoming more critical as the country tries to keep pace, according to the Wall Street Journal, who cited a Defense Department official.
Michael Brown, director of the Defense Innovation Unit, a branch of the Pentagon commented that the list of technologies where China has the lead is now "extensive". And in areas where the U.S. has the lead, it is hardly insurmountable, Brown says.
Brown commented: “A number of them are concerning from a national-security standpoint.”
One example is that the U.S. government and military use drones manufactured by Chinese companies DJI Technology Co.
Brown believes that part of the problem is a lack of government investment in the U.S. The government's investment in the military has been on a steady decline since the 1960's, he notes.
And so that leaves the the work to technology companies in Silicon Valley. Tensions between Washington D.C. and Silicon Valley can make that partnership difficult, however. Certain companies, like Alphabet, have opposed working on technology that could be used in combat, while other startups worry about the bureaucracy of doing business with the Pentagon. Other companies worry about lucrative commercial deals that could be tossed aside as government projects take precedence.
Google pulled out of a project last year to help the U.S. develop aerial-drone imagery after opposition from its employees.
Brown says that many tech companies don't want to work with the Pentagon - especially smaller companies focused on building revenue. Brown has helped bring about 60 new vendors, mostly small tech companies, to the Department of Defense since 2015.
He comments that the relationship can be difficult if big companies "crowdsource" their business strategy by listening too much to their employees' political views while making business decisions.
Brown commented: “The private sector isn’t necessarily going to take the risk to invest in long-term technologies where the payoff is uncertain. That is the role of government.”
Brown also said China's government-led initiative to tech dominance was a good example to follow.
"The U.S. has been a bit allergic to how China manages their economy with industrial policy," he continued. He also said that China’s approach is “moving them forward.”
Brown co-authored a Department of Defense paper in 2017 that warned about Chinese investments in private tech startups giving the nation the "crown jewels" of the U.S. The paper was followed by new policies restricting Chinese investments in startups, but was also criticized as stereotyping Chinese investors as spies.
Which, of course, some of them are - but that's besides the point, we guess.
Brown concluded: “They are very focused on technology transfer because they see that as a way to economically transform their society. The concern I have is that [the paper] is used too much as a justification for protectionist ideas and not enough for stimulus for further investment."