The challenge posed to America by China’s DeepSeek artificial intelligence (AI) system is profound, calling into question the US’ overall approach to confronting China. DeepSeek offers innovative solutions starting from an original position of weakness.
America believed that by monopolizing the use and development of sophisticated microchips, it would forever cripple China’s technological advancement. In reality, it did not happen. The inventive and resourceful Chinese found engineering workarounds to bypass American barriers.
It set a precedent and something to consider. It could happen every time with any future American technology; we shall see why. That said, American technology remains the icebreaker, the force that opens new frontiers and horizons.
Impossible linear competitions
The issue lies in the terms of the technological “race.” If the competition is purely a linear game of technological catch-up between the US and China, the Chinese—with their ingenuity and vast resources— might hold an almost insurmountable advantage.
For example, China churns out four million engineering graduates annually, nearly more than the rest of the world combined, and has a massive, semi-planned economy capable of concentrating resources on priority objectives in ways America can hardly match.
Beijing has millions of engineers and billions to invest without the immediate pressure for financial returns (unlike US companies, which face market-driven obligations and expectations). Thus, China will likely always catch up to and overtake the latest American innovations. It might close the gap on every technology the US introduces.
Beijing does not need to scour the globe for breakthroughs or conserve resources in its quest for innovation. All the experimental work and financial waste have already been done in America.
The Chinese can observe what works in the US and pour money and top talent into targeted projects, betting rationally on marginal improvements. Chinese ingenuity will handle the rest—even without considering possible industrial espionage.
Meanwhile, America may continue to pioneer new breakthroughs but China will always catch up. The US might complain, “Our technology is superior” (for whatever reason), but the price-performance ratio of Chinese products could keep winning market share. It could thus squeeze US companies out of the market and America could find itself increasingly struggling to compete, even to the point of losing.
It is not a pleasant scenario, one that might only change through drastic measures by either side. There is already a “more bang for the buck” dynamic in linear terms—similar to what bankrupted the USSR in the 1980s. Today, however, the US risks being cornered into the same difficult position the USSR once faced.
In this context, simple technological “delinking” may not suffice. It does not mean the US should abandon delinking policies, but something more comprehensive may be needed.
Failed tech detachment
In other words, the model of pure and simple technological detachment might not work. China poses a more holistic challenge to America and the West. There must be a 360-degree, articulated strategy by the US and its allies toward the world—one that incorporates China under certain conditions.
If America succeeds in crafting such a strategy, we could envision a medium-to-long-term framework to avoid the risk of another world war.
China has perfected the Japanese kaizen model of incremental, marginal improvements to existing technologies. Through kaizen in the 1980s, Japan hoped to overtake America. It failed due to flawed industrial choices and Japan’s rigid development model. But with China, the story could differ.
China is not Japan. It is larger (with a population four times that of the US, whereas Japan’s was one-third of America’s) and more closed. The Japanese yen was fully convertible (though kept artificially low by Tokyo’s central bank’s intervention) while China’s present RMB is not.
Yet the historical parallels are striking: both Japan in the 1980s and China today have GDPs roughly two-thirds of America’s. Moreover, Japan was a US military ally and an open society, while now China is neither.
For the US, a different effort is now required. It must build integrated alliances to expand global markets and strategic spaces—the battleground of US-China rivalry. Unlike Japan 40 years ago, China understands the importance of international and multilateral spaces. Beijing is trying to transform BRICS into its own alliance.
While it struggles with it for many reasons and having an alternative to the US dollar international role is farfetched, Beijing’s newfound global focus—compared to its past and Japan’s experience—cannot be ignored.
The US should propose a new, integrated development model that broadens the demographic and human resource pool aligned with America. It should deepen integration with allied nations to create a space “outside” China—not necessarily hostile but distinct, permeable to China only if it adheres to clear, unambiguous rules.
This expanded space would amplify American power in a broad sense, strengthen international solidarity around the US and offset America’s demographic and human resource imbalances.
It would reshape the inputs of human and financial resources in the current technological race, thereby influencing its ultimate outcome.
Bismarck inspiration
For China, there is another historical precedent —Wilhelmine Germany, devised by Bismarck, in the late 19th and early 20th centuries. Back then, Germany imitated Britain, surpassed it, and turned “Made in Germany” from a mark of shame into a symbol of quality.
Germany became more educated, free, tolerant, democratic—and also more aggressive than Britain. China could choose this path without the aggression that led to Wilhelmine Germany’s defeat.
Will it? Is Beijing ready to become more open and tolerant than the US? In theory, this could allow China to overtake America as a technological icebreaker. However, such a model clashes with China’s historical legacy. The Chinese empire has a tradition of “conformity” that it struggles to escape.
For the US, the puzzle is: can it unite allies closer without alienating them? In theory, this path aligns with America’s strengths, but hidden challenges exist. The American empire today feels betrayed by the world, especially Europe, and reopening ties under new rules is complicated. Yet a revolutionary president like Donald Trump might want to attempt it. Will he?
The path to peace requires that either the US, China or both reform in this direction. If the US unites the world around itself, China would be isolated, dry up and turn inward, ceasing to be a threat without destructive war. If China opens up and democratizes, a core reason for the US-China conflict dissolves.
If both reform, a new global order could emerge through negotiation.
This article first appeared on Appia Institute and is republished with permission. Read the original here.
