Fear of Chinese Competition Won’t Preserve U.S. Tech Leadership

Last month, the Washington Post published a blockbuster story revealing that Facebook’s parent company, Meta, paid a political consulting firm to run a coordinated smear campaign targeting one of its biggest rivals, the Chinese-owned app TikTok. At Meta’s request, Republican consulting firm Targeted Victory helped create op-eds from “concerned citizens” that attacked TikTok for its ties to China—and placed those articles in local newspapers in key congressional districts.

This is not a new tactic for Meta or its founder, Mark Zuckerberg. After years spent trying to gain access to the Chinese market by currying favor with the Chinese government, Zuckerberg has recently turned into a vocal critic of all things Chinese tech. When the Senate called Zuckerberg to testify about the Cambridge Analytica data privacy scandal, a photographer captured a photo of the Facebook CEO’s notes that spelled out his argument: “Break up FB? US tech companies [are a] key asset for America, [and their] break up strengthens Chinese companies.” Statements like this and campaigns like the Washington Post exposed serve a dual purpose: take some of the regulatory heat off of Facebook, while also damaging the greatest business threat to Meta, TikTok.

There is plenty to criticize about how the Chinese government manipulates its technology ecosystem, and TikTok deserves extra scrutiny because of how dominant it is with young people in the United States and around the world. Competing with China in technology remains one of the great challenges facing America today, and my research is devoted to figuring out how to do that effectively.

But the reversal by Zuckerberg is not a genuine attempt to bolster U.S. tech leadership. Instead, it’s an attempt to damage a rival company that threatens Meta’s market share and to shield the company from U.S. regulatory action. More importantly, this line of argument runs the risk of undermining the deep strengths that the United States still possesses. When it comes to competing with China in technology, the greatest threat to U.S. leadership isn’t TikTok. It’s the deep political dysfunction and wrenching social divisions at home, some of which are accelerated by the worst excesses of big tech.

Matt Sheehan

Matt Sheehan is a fellow at the Carnegie Endowment for International Peace, where his research focuses on global technology issues, with a specialization in China’s artificial intelligence ecosystem.
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In recent years, research has demonstrated that many leading U.S. social media platforms have exacerbated political polarization and deep social divisions. The tidal wave of misinformation about everything from U.S. elections to COVID-19—some domestically generated and some weaponized by foreign powers—has hardened partisan battle lines and further undermined the ability of the U.S. government to execute commonsense policy. Aside from thorny issues of content moderation, the way internet platforms have created winner-take-all markets further exacerbates the deep economic inequality that throws fuel on the fire of these political divisions. As these social, political, and economic divisions have been wrenched open, the country has teetered dangerously close to outright political collapse.

Platforms’ problems are in no way unique to Meta. Both YouTube and Twitter have struggled to manage the wildfire of misinformation on their platforms, while Amazon, Apple, and Microsoft all have faced scrutiny for anticompetitive or monopolistic actions. And it’s not clear exactly what mix of regulatory actions will make the biggest dent in these problems. Antitrust actions that further fracture the social media landscape could end up making misinformation harder to control. And overly prescriptive content moderation policies could end up stifling marginalized voices.

Those are very complex problems that defy easy solutions. Making progress will require U.S. policymakers, civil society, and industry to engage with one another and experiment with new models. But attempting to stifle this debate using fear of Chinese technology is counterproductive and threatens to do even greater harm to U.S. technological competitiveness.

The fact is, the United States remains in a strong position when it comes to global technological leadership. The country is home to the vast majority of the world’s most popular platforms and apps, and most metrics place it ahead of China in producing cutting-edge research in AI. Still, China is a very serious competitor in all these fields, producing apps like TikTok that sweep the world and making major advances in technologies like 5G.

Maintaining U.S. leadership will require action, but many of those actions are ones that Washington should take anyway to build on the country’s strengths. Leaders should bolster and reform the federal R&D system to boost applied research. And most importantly, policymakers must do everything possible to remain the global magnet for the best and brightest technologists from around the world. The United States remains very strong in top-tier research for fields like AI, but data show that that strength is overwhelmingly built on the country’s ability to attract talent from abroad, including from China. So many leading scientists, entrepreneurs, and tech executives came to the United States and stayed because they believed America was a stable and prosperous country that gave them the best opportunities to pursue their work and make a home for their families.

But political dysfunction and social division are chipping away at that perception. Hyper-partisan gridlock has made it difficult to pass simple immigration reforms that would allow the country to hang onto the brilliant scientists who want to work in America. And the economic and social polarization that is tearing at American society make the country look less and less attractive to international technologists deciding where to take their talents. A 2021 study of where workers around the globe want to work showed the effects of this, with the United States for the first time losing its top position to Canada. If sensible regulations for big tech can help address some underlying problems such as misinformation and foreign election interference, then that is an avenue that should be pursued on its own merits.

Arguments for backing off tech regulation in the name of competing with China run into another great irony: the Chinese government is in the midst of a sweeping regulatory crackdown on its own companies, one that includes many of the same regulatory actions as those proposed in the United States. In the past eighteen months, Chinese regulators have levied record antitrust fines, passed major data privacy laws that will heavily constrain tech companies (if not the Chinese government), and begun rolling out a multifaceted AI governance regime that places new demands on key algorithms. These actions are driven by a range of different motivations: consolidating power, promoting Chinese President Xi Jinping’s vision for “common prosperity,” and actually solving pressing social problems. But taken together, they give the lie to the idea that the only way to compete with Chinese companies is to avoid regulating U.S. ones.

This is not an argument for copying China’s regulatory approach. It’s also not an argument against criticizing or regulating Chinese apps like TikTok, which need to be carefully scrutinized for potential security vulnerabilities, malign foreign influence, or censorship. But one key to competing with China globally will be rebuilding U.S. civic institutions at home. Developing sensible regulations for U.S. big tech won’t solve all these problems, but since these platforms have a major role as shapers of America’s information environment, they are an important piece of that puzzle. Policymakers can’t let fear of Chinese technology get in the way.

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