By Aynne Kokas
This past summer I was a visiting professor at Sweden’s Lund University researching the growing global impact of Chinese AI regulations, but the takeaways were striking with respect to declining U.S. influence. My European colleagues often asked, “What makes U.S. and Chinese regulation different?” and the follow-up, “Why might Europe want to avoid working with China when U.S. regulations also threaten European sovereignty?” These questions are increasingly tough to answer.
As Chinese President Xi Jinping and President Trump meet, it is useful to walk through some of the surprising similarities in U.S. and Chinese AI regulations that will likely emerge in a Xi-Trump summit with tech at its center. Here are five that show that while the U.S. and China may be able to come to agreement on tech regulations, their areas of agreement further alienate U.S. allies, partners, and midterm election voters.
Golden shares that grant government officials disproportionate influence over private firms
When I was writing my book, Trafficking Data: How China is Winning the Battle for Digital Sovereignty, I argued that U.S. firms could operate more autonomously than Chinese firms in part because China threatened firms with taking government “golden shares,” or special equity interests that lead to disproportionate impact on decision-making. The second Trump administration has now deployed this strategy in the Nippon-U.S. Steel deal, drawing into question where else it might be used.
Entity lists that punish industrial competitors
Both countries now have designated lists of companies that they will not do business with. The U.S. Entity List was instituted in February 1997, but escalated its focus on China with the listing of Huawei in May 2019. China responded in kind by introducing its own Unreliable Entities List at the end of that month.
AI firms integrated into the military-industrial complex
One area that concerned European colleagues the most was the pressure both U.S. and Chinese governments seemed willing to exert on AI industries domiciled in their respective countries. While concerns about China’s tech sector have long simmered, recent pressure on Anthropic to loosen ethical controls has raised significant concerns about the entire sector and its relationship with the U.S. military. When allies and partners are uncertain about the relationship between tech firms and the U.S. government, it incentivizes hedging and the search for alternatives.
Using tech firms accrue power and influence abroad
Both China and the United States are working to advance the adoption of their domestic firms as standard-bearers in the AI race. This gives pause to U.S. allies and partners who increasingly see a threat to national sovereignty in the form of control over critical infrastructure. While developing local alternatives is time-consuming, expensive, and possibly not even feasible, hedging between the United States and China offers leverage.
Tech exports as potential “Trojan horses”
Recent U.S. threats to take over Greenland and the shutdown of the Microsoft account of Karim Khan, a member of the International Criminal Court, have made European officials look at U.S. technology products with an eye that had previously been reserved for Chinese products. Such overtures make it much more difficult for the U.S. tech industry to claim either autonomy from the U.S. government or present a more secure option than China.
Consequences are already mounting. Switzerland is spending more than $11 million to pilot a move away from Microsoft 365 to open source option openDesk. While the EU’s decision to move forward with Canada’s associate membership may not have been explicitly about the tech sector, it was definitely about efforts by middle powers to protect their sovereignty, not just from China, but also from the U.S. Recent statements by President Trump that AI safety concerns are a “hoax” certainly haven’t helped allay global concerns that the United States is not a trustworthy player in the global tech space.
Ultimately, the areas of similarity between China and the United States, namely unpredictable and significant government intervention in the tech sector, present an eye-opening comparison for U.S. voters as they enter midterm election season.
Aynne Kokas is the C.K. Yen Professor at the Miller Center, director of UVA’s East Asia Center, and a professor of media studies at the University of Virginia. Kokas’ research examines Sino-U.S. media and technology relations.