Page:The Elements of the China Challenge (November 2020).pdf/12

 small- and medium-sized manufacturing in the United States and other nations, wiping out as many as 2.4 million jobs in America alone and leaving crucial international supply chains dependent on China. The global pandemic has thrown this supply-chain vulnerability into sharp relief.

Third, China seeks worldwide industrial dominance, particularly in critical high-tech sectors. While manufacturing superiority proved decisive in U.S. victories in World War II and the Cold War, the United States lost that advantage in many essential industries. For example, China today accounts for 50 percent of global steel and aluminum production, 70 percent of consumer electronics manufacturing capacity, 90 percent of consumer drone production, 45 percent of shipbuilding production, and, by 2022, will likely account for 35 percent of the world’s integrated-circuit fabrication capacity. By 2022, China and Taiwan are set to house 70 percent of global capacity for integrated-circuit fabrication, including virtually all cutting-edge production, which is vital to the digital economy, advanced weapons systems, aerospace, artificial intelligence (AI), robotics, and other essential industries. The PRC aggressively implements industrial policy through efforts like its “Made in China 2025” initiative, which develops Chinese “national champion” companies in ten decisive areas: (1) AI, quantum computing, and next-generation information technology; (2) robotics and automation; (3) aerospace and space; (4) high-tech shipping and oceanic engineering; (5) high-speed railway; (6) energy efficiency; (7) new materials; (8) biotechnology, medical devices, and advanced pharmaceuticals; (9) next-generation energy and power generation; and (10) agricultural machinery. By displacing the United States and other advanced industrial nations in these vital domains, China intends not only to acquire control over global commerce, but also to support its “Military-Civil Fusion” (MCF) strategy for leveraging legally and illegally acquired advanced and emerging technologies to strengthen its armed forces. The PRC’s progress in AI poses a particular risk because the CCP, unconstrained by respect for individual liberty and human rights, exploits the massive quantities of data that it collects to refine the AI algorithms that will power the next generation of networked technology.

Fourth, China aims to build the world’s fifth generation (5G) wireless-telecommunications physical and digital infrastructure as a steppingstone to broader dominance in emerging and next-generation information technologies. Beijing heavily subsidizes state-directed Huawei Rh