China and the United States: The Race to 5G

Written by: Michael DeLeers

It seems every week a new technological development is making headlines. With companies like Space X, Google, and Apple constantly driving innovation, it is not hard to believe. However, there are also a number of incredibly important technological developments happening under the radar. One of the most critical is 5G, “the next generation of mobile internet connection.” One that will offer “much faster data download and upload speeds.” When I say faster, I mean some areas, mostly metropolitan cities, will see their internet speed increase by “10 to 20 times.

It is for this reason, many in the United States are anxious about developing a working 5G network. That is why the U.S. recently tried to dissuade the United Kingdom from letting Huawei build parts of its 5G cell phone network. This decision has heightened anxieties in the United States about the technological developments of Chinese companies and whether or not the U.S. is doing enough to remain technologically competitive compared to other countries. Staying technologically competitive is vital for developed countries that want to have any influence on the global stage because new technologies provide avenues for increasing economic capabilities and maintaining strategic military capabilities. Since WWII, the U.S. has been at the top of the technological ladder, however, a government-directed effort by China has recently started to challenge this position.

To understand this push, it is helpful to consider China’s recent advancements in technology and science, which started with China’s Thousands Talent Program and its Made in China 2025 program. The former program, created in 2008, was meant to tap into the knowledge  of Chinese citizens that go to school and work in the United States. The U.S. National Intelligence Committee described this as “a government campaign to steal intellectual property,” whereas the Chinese government feverently denies these claims. 

The Made in China 2025 program is a top-down government attempt to stimulate ten key parts of its economy like robotics, aerospace, and clean energy cars. Many, including President Donald Trump, have raised concerns over this attempt because it is seen as a threat to Western, especially U.S. interests, due to its reliance on state support and subsidies. 

Nonetheless, many would still argue that the U.S. is the global leader in science and technology. It has most of the world’s prestigious research universities like Stanford, Harvard and MIT, while also awarding the most advanced degrees, and attracting the most venture capital. Moreover, the U.S. houses “the most valuable technology companies in the world.” With companies like Google, Apple, and Tesla, the U.S. has a stranglehold on some of the world’s top tech sectors; these companies showcase a tremendous potential for the private sector to spur innovation through acquiring other companies, attract a large talent pool, and invest more into technological developments. 

One problem of having the private sector driving innovation though is that there is a chance for some sectors to become malnourished. This is where 5G comes in. The U.S. has been laggard in developing its 5G technology and rolling it out across the country. China, however, has taken advantage of this and quickly developed the world’s largest 5G network. It has done so mainly through the development of Huawei, the world’s largest provider of 5G technology, but also through government subsidies and permits to build 5G networks. Hence, while the U.S. left 5G to the private market, the Chinese government has made a concerted effort to develop the necessary technology. 

As we can see, the U.S. is behind in a major technological area; some would say years behind. With that in mind, some have argued that the government should make an effort to build a 5G network, yet this idea was never followed; instead, it was decided that 5G will be left to companies. Such an approach has been successful in the past. The U.S. led the way in 4G networks, and this had a tremendous impact on the economy. It create millions of jobs, grew the annual U.S. GDP by $100 billion, and allowed U.S. companies to lead global innovation. However, if a greater sense of urgency is not taken by U.S. industries, then the U.S. will have to be okay taking the backseat to China in regards to the growth and production of 5G technology, giving them the lionshare of its economic benefits.