Episode 7

Miah Hammond-Errey

TS EPISODE 7

Decoupling, de-risking and tech diplomacy – special episode

In a special episode, Dr Miah Hammond-Errey is joined by Dr Michael Green, CEO of the United States Studies Centre, to consider the conversations and developments around technology decoupling between the United States and China across the past six months. Drawing on insights from previous guests on the podcast, Miah and Mike cover topics from international standards, subsea cables and individual user trust in technology to the role of Japan and Australia. They also discuss the role of alliances, digital infrastructure, national security and historical lessons that can inform this evolving area of debate.

Clips used in this recording:

Jessica Hunter, First Assistant Director-General Access & Effects Operations at the Australian Signals Directorate, recorded in Canberra, February 2023 for Technology and Security Episode 1.
Alex Lynch, Google Australia Public Policy Manager, recorded in Sydney, March 2023 for Technology and Security Episode 2.
Julie Inman Grant, Australia’s eSafety Commissioner, recorded in Sydney, March 2023 for Technology and Security Episode 3.
Dr Robert Atkinson, President and Founder of the Information Technology and Innovation Foundation, recorded in Sydney in March 2023 while at the USSC as a Visiting Fellow.
The Hon Dr Andrew Leigh MP, Assistant Minister for Competition, Charities and Treasury and Assistant Minister for Employment, and Dr Robert Atkinson, President and Founder of the Information Technology and Innovation Foundation, recorded in Canberra, March 2023 at the USSC’s ‘Technology, Innovation And Strategic Competition’ event.
Sue Gordon, former Principal Deputy Director of National Intelligence at the Office of the Director of National Intelligence, recorded in Washington, May 2023 for Technology and Security Episode 4.

Resources mentioned in the recording:

(USSC Polling Explainer) Collaboration with trusted allies and distrust in Chinese technology: American, Australian and Japanese views on technology
(Standards Australia Report) Iconic Nation
(ASD Resources) Protecting your devices and cybersecurity
(USSC Report) Secrecy, sovereignty and sharing: How data and emerging technologies are transforming intelligence
(Elisabeth Braw, Foreign Policy article on subsea cables) Decoupling Is Already Happening – Under the Sea
(White House) CHIPS and Science Act
(US Bureau of Industry and Security) Commerce Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC)
(Australian Defence Force) Defence Strategic Review 2023
(White House) National Security Strategy
(Ministry of Foreign Affairs of Japan) National Security Strategy
(Wall Street Journal) Potato Chips Vs. Computer Chips – High Technology Any Way You Slice It

Making great content requires fabulous teams. Thanks to the great talents of the following:

Research support and assistance: Tom Barrett
Production: Elliott Brennan
Podcast design: Susan Beale
Music: Dr Paul Mac

This podcast was recorded on the lands of the Gadigal people, and we pay our respects to their Elders past, present and emerging — here and wherever you’re listening. We acknowledge their continuing connection to land, sea and community, and extend that respect to all Aboriginal and Torres Strait Islander people.

Episode transcript

Please check against delivery

Dr Miah Hammond-Errey: [00:00:02] Welcome to Technology and Security. TS is a podcast exploring the intersections of emerging technologies and national security. I'm your host, Dr. Miah Hammond-Errey. I'm the inaugural director of the Emerging Technology Program at the United States Studies Centre, and we're based in the University of Sydney. I'm joined today by Mike Green, the CEO of the United States Studies Centre. Mike has previously held senior roles at the Centre for Strategic and International Studies and Georgetown University. He served on the National Security Council at the White House and is a renowned Japan and East Asia expert. Before joining us as the CEO. We're going to co-host a special episode to share the conversation we've been having at the centre about technology decoupling, de-risking and diplomacy. Thanks for joining me, Mike.

Dr Michael Green: [00:00:48] Thank you, Miah. Lots to discuss and a lot of work I know went into this.

Dr Miah Hammond-Errey: [00:00:51] We're coming to you today from the lands of the Gadigal people. We pay our respects to elders past, present and emerging, here and wherever you're listening. We acknowledge their continuing connection to land, sea and community and extend that respect to all Aboriginal and Torres Strait Islanders people today. We're taking a closer look at what technological decoupling between the US and China looks like and what it might mean for Australia and our region. Mike, your early work draws on many of the discussions about US and Japan approaches to technology. Can you introduce listeners to those those thoughts?

Dr Michael Green: [00:01:25] Well, I lived in Japan and then went on to do a PhD at Johns Hopkins University in the 90s at a time when Japan loomed as the technology hegemonic challenger to the US after the Cold War. And of course today it's China. And in the early 90s the US and Japan really clashed over technologies where the US worried Japan would create a dominant hegemonic position in dual-use technology. In the late 80s, early 90s, Japan began working on its first real indigenous fighter jet, the FSX. And it was sort of the high water mark of Japan's effort to indigenise not only a military aircraft but eventually leap into commercial aircraft, an American strongpoint. So I wanted to look at that and did a history of Japan's efforts to create an indigenous aerospace industry. And what I found was that despite deliberate strategies to indigenise an aerospace industry, the challenge of integrating a complex aircraft grew exponentially from one generation of aircraft to the next, faster than the ability of the Japanese to to catch up. So at least in that case, the US maintained its dominance. And in fact today huge parts of Boeing's planes are made in Japan and it's a very collaborative relationship because the Japanese had also realised they were primarily going to be strong in subcomponents and subsystems rather than dominating the system and system of systems level of innovation.

Dr Miah Hammond-Errey: [00:03:00] So what I'm hearing is that the tech has changed, but some of these the debates are actually quite similar?

Dr Michael Green: [00:03:05] And often these debates in the US really crystallise when the technology in question starts to touch on military use or dual-use, and then you get the national security community, the Pentagon in particular, members of the national security committees in Congress, really focused on maintaining dominance. And I think today with China, that's exactly what happened. The architects of the Trump administration strategy on de-risking or decoupling in technology got their start in the joint staff, in uniformed positions as colonels and generals in the Obama administration. So ten, 12 years ago. And as they were looking at the future of war fighting with China, they saw that China was trying to dominate AI and certain technological domains that would be critical to the battlefield. And same thing with Sputnik, same thing with the Japanese. It was when the Pentagon got their back up that the debate really became ferocious. The Japan debate ended quite happily. I mean, there are so many Americans who have jobs thanks to Japanese investment. Technology collaboration with Japan is excellent, and in public opinion polls, Americans and Australians trust Japan more than any other country in Asia.

Dr Miah Hammond-Errey: [00:04:17] The emerging tech program has been meeting with many Australian and US visitors and we've been asking about what technology decoupling might look like. We're going to go through a series of these conversations. This is the first episode of what will probably be a few. This clip is from episode one of technology and security with the Australian Signals Directorate's Jessica Hunter. We're in a tech decoupling in some areas between the United States and China. Where do you think it will go? Where might we end up? And do you see there is a tipping point for that technology decoupling?

Jessica Hunter: [00:04:53] So I think we're almost at that tipping point. And this comes back to international standards, which effectively at a really macro level, set the standard for how technology is produced, what ethics are built in, and values are built into that technology, which then cascades down to supply chain, how it's used and how it's implemented. I think that tipping point has already come, and that's due to the the imbalance in the value proposition in the international standards bodies, where if you look across, it's no longer a neutral value proposition that there is definitely influence in international standards such that the neutrality has been removed. That's where I would focus. That is a very strategic place to invest time and often for individuals who are thinking about their widgets and the supply chain and how they use their piece of kit and how secure or vulnerable that piece of kit is, the concept of international standards is too abstract, but ultimately that's where we start to set the norm in terms of the technology space. So for me, that tipping point was lost several years ago and it's now up to all nations to try and level that out such that the value proposition is, is is normalised rather than one or two values coming into play and then shaping all of the back-end tech, which effectively sits in the new technology. So if those norms aren't set in the right place, then we do have all of the chips and all of the supply chain and all of the build out being influenced without a neutral perspective.

Dr Miah Hammond-Errey: [00:06:31] I really think standards bodies globally are critical here, and organisations like Standards Australia or the National Institute of Standards and Technology in the US are critically important at setting global standards. In a report on the Australian data and digital standards landscape last year, Standards Australia highlighted emerging technology standardisation as a real issue. That report stated that 4,000 new standards will be needed in the next ten years to keep pace with rapid technological transformation. What kind of role do you think that the US and Australia can play in setting standards?

Dr Michael Green: [00:07:05] So Jessica's point is really important. When she said that we've passed the tipping point on standards. I don't think that China in particular or Russia are dominating standards setting globally. There is now a split. There are two blocs or there are three blocs. It's almost like the Cold War. As as as much as we're trying to avoid using Cold War analogies for competition with China. But you have a China, Russia bloc seeking to change standards for telecommunications, to allow the surveillance state, the authoritarian state model, to dominate the infrastructure for communications. I think we've reached a tipping point in the sense that we are not going to patch together one global set of standards. I think that's the world we're in, and I think it puts more of an imperative on Australia, the US, Europe, Japan, Canada and other democracies to collaborate more than we are used to in the past to set standards. And we're not completely unified. As you know, the US and Europe in particular have somewhat different values when it comes to big tech and data, but those differences right now are an opportunity, frankly, for China, Russia and others to push through an authoritarian surveillance state set of standards that we will all regret. I also think it's been a long time building, you know, standards now is the front line.

Dr Miah Hammond-Errey: [00:08:30] The International Telecommunications Union, the Secretary-General, prior to the current one, who was elected this year in 2023, Doreen Bogdan-Martin, who's from the United States, the previous secretary, was Houlin Zhao from China. And there have been a number of Chinese, you know, significant investment in standards, bodies in technology in particular. And so I think that that does demonstrate the value that they have placed on on establishing standards. So I do think that there is some scope there to see that they have invested quite heavily in historically in some of these, when you're right, standards just weren't sexy and all of a sudden we're now seeing, you know, an interest in the West in particular and making sure that those standards reflect our values.

Dr Miah Hammond-Errey: [00:09:13] We've got some polling data which does show that the publics in Australia, the United States and Japan, have significantly more trust in technology from the United States and lower trust in technology from China. So we talk about decoupling as a really kind of grandiose supply chain, nation state security. I think I'd argue almost that trust in technology is also about our individual user trust in in the devices that we have in our homes and in our lives. Do you think there's a relationship there between the kind of broader decoupling and this individual trust in technology?

Jessica Hunter: [00:09:49] I think you're spot on, on the individual trust. It's what they see and can hear and can read and ingest. Technology is still, it may not be for you, but it's still a bit scary for some people. The concept of reading journal articles about tech, the concept of understanding the sovereignty of where your data resides, into which cloud, into which nation state, that is not an everyday user's vernacular or worry. What I want to say though, is I don't want them to be fearful of tech or worry about even where the tech is generated from because there are so many mitigations they can put around their individual personal device regardless of where the chip was made or regardless of where the handset was or even regardless of which network you're joining when you're overseas and connecting to the Wi-Fi, there are there are general mitigations they can do at what we call a local level at a personal device level, that should help remove some of that fear and then ultimately should decouple technology from geopolitical conversations for an end user because they are actually able to control the security of that device.

Dr Michael Green: [00:10:51] Jessica's point about trust is pretty fundamental. This is fairly new, I think, in public opinion, and the connection of values to technology in the context of geopolitical competition is pretty new. But I think it also explains the 5G debate. Because when 5G you know, when when ASD, NSA in the US, British, Canadian counterparts were making the case that we need to worry about Huawei getting into our telecommunications infrastructure, particularly in critical nodes like switching stations and so forth. It didn't animate the public or the parliamentarians or the Congress very much because they sort of figured, well, it's a spymaster's game. So Huawei is going to be able to, you know, backdoor and download and it'll make the spy game harder. It didn't capture people's attention. But then when members of Congress, the British Parliament and others began to realise that Huawei was trying to position itself to become the backbone of the Internet of Things, the next greatest transformation since the industrial Revolution, that they would literally have dominance, information dominance right into people's, you know, air conditioning and things connected to the Internet of Things and think that that values piece fundamentally changed the debate and explains why Australia, Japan and then in rapid succession, many other democracies, partially or completely banned Huawei from their 5G networks. And at some cost, by the way, because, you know, the systems were cheaper from China and they were ready sooner, maybe not better, but ready sooner. So it shows you how powerful the values piece is in democracies when they began to realise what it meant.

Dr Miah Hammond-Errey: [00:12:34] Absolutely. And I think you've hit on a point there, and that is that digital infrastructure is now a backbone of our society. And perhaps, you know, even ten years ago that wasn't the case. Another thing that Jess mentioned, you know, which makes me think about particularly older Australians and older Americans, is the need to increase their general data literacy, their understanding of cyber security, and particularly at the local user level. So the understanding their individual devices and I know, you know, from interviewing Jess and working with ASD, that they do have a lot of information out there on their website to increase individual cybersecurity. Individual user trust is really important, but governments also need to increase the information and capacity for people to increase their own cyber security. And as you know from a paper I recently published, secrets, keeping secrets is much, much harder in a digital era. And that goes for everyone, particularly those out of government and smaller NGOs.

Dr Miah Hammond-Errey: [00:13:29] Let's listen to a clip from Alex Lynch. This is from the second episode of the Technology and Security podcast. I want to ask quickly about your thoughts on tech decoupling. We're obviously seeing tech decoupling in quite a number of areas between the United States and China. Where do you think it will go?

Alex Lynch: [00:13:47] Interesting question and one that is sort of, the drumbeat has been continuing for a long time from in the public domain, from the Huawei decisions as a critical issue of trust. And now to what we see as a huge, huge intervention in the form of the CHIPS Act in the US and the ramifications that are still spreading through the international environment. The multi-billion dollar supply chain decisions that are being made to change where, you know, things are produced, to look at the infrastructure and logistics cost of those changes. This is. It's happening is the answer I guess. This decoupling at a high technology level is happening and the ecosystem around emerging technology and technology production, technology supply chains is so broad that you are seeing interventions happening across multiple fronts, from academic cooperation to manufacturing to standardisation in international standards bodies and people re-engaging or, you know, the Western Western states reprioritising international institutions that look at technological standards. All of these interventions are happening right now and the tension is not going away in the near-term. I can't see any indication that there is any, the views on both sides of the sort of the broad geopolitical divide are hardening.

Dr Miah Hammond-Errey: [00:15:10] You touched on the global supply chain there. I'm really interested in, if you could give us some examples for listeners about what that means for Google. So what we're hearing about is, you know, the production of chips, but what does it actually mean for users?

Alex Lynch: [00:15:25] Hopefully very little. So what we would like to do is build the security by design through all areas of the product stack, from the hardware through to all the software, and for that to be reliably secure for the end user. And what that means in an industrial production context in terms of exports and imports and jobs is a different story. That is dramatically changing and it's largely changing within East Asia and the Indo-Pacific to move this sort of technology production out of China or, you know, largely in many cases, to India, to Vietnam. We also have to think about what I like to call digital lines of communication, which is, you know, I'm sure you're familiar with the sea lines of communication concept, right? There are chokepoints. There are, you know, we look at our logistics in terms of that, the vulnerabilities of our logistics from production sources to destinations and think about our digital footprint in a similar way. Where, where are we using compute? Where is that being piped in from? We have, you know, a map of subsea cables. We have big technical infrastructure in various jurisdictions. You know, what is the risk in that? I suppose from a geopolitical and security standpoint, but even for a policy standpoint, right. So where where do we want to invest for the future in order to make sure our technical infrastructure and global technical infrastructure footprint is resilient? And what I would love to see, you know, as as someone locally, is for Australia to play a big role in that. But we have no idea at this stage how that is playing out.

Dr Miah Hammond-Errey: [00:16:55] What you heard there was Alex talking about digital lines of communication. In the conversation that we had in the podcast. he was talking about reading a book on naval operations, and we were talking about sea lines of communication. So I'm just going to outline what that is for people that aren't across it. So sea lines of communication connect countries with one another. And it's a phrase that's used to describe principal maritime routes between naval ports, which are used for naval operations, trade and logistics. During peacetime these ocean routes serve as commercial trade routes, but in war time they become strategic lines of communication. In a recent Foreign Policy piece by Elisabeth Braw on subsea cables, she argues that US and China relations have already led to the rerouting of crucial subsea internet cables, and she highlights the vulnerabilities of cables and cable connections which were created during peacetime but are now, you know, starting to look like a significant area of competition. In Alex's discussion about digital lines of communication, which is a really fascinating analogy, he brings in the role of technical infrastructure. He also talks about digital lines of communication and chokepoints. And Mike, I wondered if you could talk to some of the broader implications that he raised there about manufacturing and logistics?

Dr Michael Green: [00:18:15] Well, yeah, there's a lot in what Alex said that's so interesting. And if I could first pick up on your point about sea lines of communication and infrastructure, the concern that he raised and the concern policymakers have about undersea cables and digital communication, physical infrastructure. This is not a new story. In the 1920s, there was almost a war over the undersea cable to the island of Yap, which no one remembers, but it was the only way to communicate with this critical island in the Pacific. So infrastructure has always been at the core of geopolitical competition. Dominance of infrastructure has always been at the core of imperialism and hegemony.

Dr Michael Green: [00:18:58] The CHIPS Act, which Alex referenced, which is the over 50 billion dollars that the US Congress voted to make available for onshoring and reshoring, for building up advanced semiconductor manufacturing in the US, coupled with things like the October 6th 2022 US decision on export controls, on high-end semiconductor equipment and manufacturing expertise to China, plus the US–Japan–Netherlands agreement to restrict high-end photolithography equipment that would allow the Chinese to close the 10 to 15 year gap they have on semiconductors that is needed for AI. This combination of steps by the US has been, in my view, incredibly effective. So the US, with some bold but not actually such huge moves, has basically tilted the debate in boardrooms of high-tech companies. And now the question in most of these firms is not whether or not to de-risk, but where to put their supply chains because there's only so much Vietnam or India can absorb. And that's sort of the next big challenge, I think.

Dr Miah Hammond-Errey: [00:20:07] This interview was the third episode of Technology and Security, and Julie Inman Grant is the eSafety Commissioner for Australia.

Dr Miah Hammond-Errey: [00:20:15] The US and China appear to be in a race for dominance and we're seeing tech decoupling in some areas between the US and China. What are some of the tensions from your perspective and where might that leave users?

Julie Inman Grant: [00:20:28] It's an area where there's going to continue to be an arms race, and China in the past decade has certainly had some very dominant companies come onto the scene in an area where that was previously an American or Western domain. So things are things are changing. And I'm sure that this is what's spurring on a lot of the geopolitical tensions around technology at the moment. We're fighting for dominance, technology, dominance and and that matters. I just met Doreen Bogdan-Martin, who is the first female Secretary-General of the ITU in its 158-year history. That chair was controlled by China before Doreen, who's an American, took the role, and this controls telecoms and internet standards. And so China's really good at playing in these standards bodies. And, you know, they're good at tapping into smaller markets as we saw happening in the Pacific Islands. They're a quite formidable competitor in the technology space.

Dr Miah Hammond-Errey: [00:21:35] It's great to hear Julie there highlighting the role of standards bodies. You know, and as we discussed earlier, we are seeing China's engagement in, as you pointed out, Mike, many different standards bodies and many parts of the United Nations. It actually reminds me very much of the way that Russia often uses legal instruments and aspects of globalisation to try and garner support in areas where they may not actually be acting in, you know, with a global collaborative mind. And that's really true in technology. You know, we hear a lot of rhetoric about engaging in standards, but when it actually comes down to it, you've highlighted, as have many, the intellectual property theft that China has been rampantly engaging in across many areas in science and technology especially. Did you have any thoughts about the ITU?

Dr Michael Green: [00:22:27] Well, you know, the, as Julie said, the Chinese officials have been very skillful at advancing their agenda in the ITU and other other multilateral bodies. But to some extent that's our fault in the US and elsewhere because we were just not paying attention. And during the Trump administration it was particularly bad because the administration had such an allergy to multilateralism and was, you know, not sending people to to key bodies like the WTO or the ITU. And it was Japan actually, before anyone who began ringing the alarm bells, ringing the alarm bells and trying to come up with a united strategy among democracies. And I think in any discussion of technology decoupling and geopolitical competition and innovation. You have to give Japan, under the Abe years, but even before, a lot of credit for trying to pull the G7, the Quad, US–Australia–Japan trilateral relationship together to counter what they were seeing, because they did not lose their commitment in the Japanese government to international standards bodies at a time when the US did. And I remember a senior Japanese media official describing how disheartening it was in one of these bodies during the Trump years to be to be grabbing his Australian and UK counterpart and sometimes the Koreans or Canadians and saying we've got to stop this Chinese, you know, onslaught on the norms, where are the Americans? So so I think, Beijing got a bit of a free ride or had a bit of an open field. The Biden administration and Republicans in Congress are now very alert to this. And I think it's going to be harder for China. And just the new head of the ITU is an example of why, because now we're alert to this.

Dr Miah Hammond-Errey: [00:24:21] Next up, we've got a clip from Rob Atkinson. Rob is the founder and president of the Information Technology and Innovation Foundation, and he joined us at the United States Studies Centre in March this year as a non-resident fellow.

Dr Miah Hammond-Errey: [00:24:33] And that kind of leads into the decoupling conversation in the context of technology. How far could and should decoupling between the US and China go?

Dr Robert Atkinson: [00:24:42] So there are lots of things that we should sell to China. Starbucks is a really, we should sell Starbucks to China. We should sell them Kentucky Fried Chicken. I mean, all those are, I'm not making fun, all those consumer things that we sell to China, that's more money to us, less money for them. It also, at some minor level, might move them a little bit more into, hey, maybe the US isn't so bad. We should. The big issue is computer chips. We should absolutely sell them as many computer chips as possible. Now, maybe not at the smaller nodes that you can use for military things, but certainly above what people call 30 nanometres or above. If we don't sell them a chip, they're going to make it themselves or they're going to buy it from the Japanese or the Koreans. That is absolutely no way in our interest. So what we need to be thinking about is strategic decoupling from China. We need to be thinking, how do we make sure that we don't, we don't transfer key technology capabilities to China and at the same time where we don't sell them key things that they can use for their civil-military fusion program. But I want to sell a lot of stuff to China because every dollar we sell to them is a dollar we get. And a Chinese company doesn't get that dollar. And that's where the battle is going to be fought. In these global markets, we need to be sucking up every sale we can in the US. We need to be denying that to China. And so this notion somehow that we should completely decouple, I think is ultimately mistaken.

Dr Michael Green: [00:26:09] Well, Rob and I go way back. In fact, I think I first met him when I was a graduate student back in the 90s, and he was working for a congressional committee looking at how to outcompete Japan in technology. So he's been on the front lines for a long time. And it gets to the core of this question of how much decoupling and how much interdependence can we accept with China economically. So one argument, and the people making this argument tend to be more in favour of complete decoupling, is that China always intended to destroy us. 'They're Leninists and they were biding their time and hiding their strength', you know, sort of co-opting Deng Xiaoping's favourite line, 'until they were strong enough to crush us all and subvert us and all the rest.' And people who sort of hold that line say that the, you know, Obama, Bush, Clinton, Bush administrations were all incredibly naive about China. But I was in the White House 2001 through 2005, and it was a different China. It was not as powerful, of course, but it was not a China under Hu Jintao that was seeking the same aggressive gains, relative gains over the US, Japan, Australia and others.

Dr Miah Hammond-Errey: [00:27:25] Do you also think, though, that it was a different America?

Dr Michael Green: [00:27:28] Well, it was, in technological terms, we were more powerful, so we had more confidence. I mean, when I was in the White House, the Japanese navy was still about the same size as the PLA Navy. It's now a fraction of the size. For example, China was the third-largest economy in the world. Now it's the second largest. Our Navy was much bigger. So the power and technological change has been quite significant. And I have no doubt and your your guests all agree that China is in an extremely predatory, zero-sum approach to technology competition and geopolitics, no doubt about it. But is that the China we're going to face the next ten years? The next 30 years? I don't think we know. And I think understanding the history is a bit of a guide to the future. We need a strategy that preserves the opportunities for interdependence, where it doesn't infringe on our national security and our values. And I don't think people are looking for that space. Rob was speaking a few months ago, I guess, and Tony Blinken has been to China, the US Secretary of State. Things may be shifting slightly, but I don't think we can judge where that line is on decoupling until we understand the history, until we start thinking about what level of cooperation we might want.

Dr Miah Hammond-Errey: [00:28:40] Thank you. I want to grab on a couple of those points, Mike. And firstly, just to say, you know that many of these recordings occurred earlier in the year, and so we are actually tracking this as a discussion through time. And this particular recording was in March. You know, I guess that that discussion with Rob highlighted a few things for me, and one of them is the role of designating critical technologies and digital infrastructure. And he was talking to that. You know, we want to be able to sell them other things and even computer chips, but we want to sell them only the things that are not most critical to us. And I think one of the challenges that is, that I certainly see as an outsider in the US is what you described as this kind of 'everything is critical technology' and that's not always the best approach. And when we start to talk about, you know, decoupling, what we're really talking about is, is a phased reduction of technological interdependence rather than a complete decoupling. I'd also highlight that countries like Australia have a really different approach. You know, we are, we have a different economic situation, we have different values, different geography, alliances and interests, and that affects our approach to, so both designating critical technologies and considering that all countries and particularly in the Indo-Pacific region, have a different and more nuanced, you know, approach to each other. We're going to go now to a clip between Rob Atkinson and Andrew Leigh. This comes from a public discussion the centre held on technology, innovation and strategic competition. It was with the Honorary Dr. Andrew Leigh and Dr. Rob Atkinson in March in Canberra.

Michael Davies: [00:30:14] I have a question more about the debate that's started up in the United States about sort of fundamentally decoupling the United States economy from China. How do we balance the risks of having China as part of a technology stack, particularly in terms of IP theft and cybersecurity versus the downside risks of not being able to access technologies or not, choosing not to access technologies that are competitively priced.

Dr Robert Atkinson: [00:30:46] We don't want to decouple. I think what we probably what we should do is we should be thinking about a sort of gradual, slightly faster than gradual, second-sourcing program, which is why I think we should really be focused on India. India would be, we need India to be the new China for manufacturing. I think that would be better for everybody. And then we need to be thinking carefully about what kinds of limits we have on tech transfer to China. One of the problems is that China puts a gun to companies' heads. If you want Chinese access market, you got to give us your technology. And the reason they're able to do that is because of their monopsony power. And so I think that's where the West or the allies have to come together and confront that collectively and say, we are not going to allow that to happen anymore. So, it's a very difficult conversation in the US because we're sort of early on and there's lots of emotional voices going back and forth at each other, but there's a lot of people in the US who I think are thinking pretty carefully and strategically about it, so I'm not super, there'll be, you know, a few things here and there that bounce, like banning TikTok. It's like. That's the best you got? I mean, really, you think TikTok is a national security risk? I would be much more worried about civil-military fusion than I would be about something like TikTok. So.

The Hon. Dr Andrew Leigh: [00:32:06] Could I just make a quick point on China. I think it is always important that we distinguish the Chinese people from the Chinese leadership, from the Chinese Australians, because there is a sense in which, in these conversations using China shorthand can take away from the billion people, the benefit to a billion people of rapid, rapid economic growth and the ability to to move hundreds of millions of people out of poverty and the desire among many people, in many Chinese citizens to have more personal freedoms than they do at the moment. I also would like to see a United States, which is a little more self-confident about its standing in the world. You know, vis a vis China, the United States massively dominates in soft power. There is no Chinese equivalent of Hollywood. It dominates in the military sphere. It dominates in terms of friends and allies around the world. And if US–China policy could embody a little bit more of that self-confidence, rather than a sort of timidity that the world is about to fall apart, I think we'd all be better for it.

Dr Michael Green: [00:33:27] That was a great exchange. And they're both right. They're both right. China's military technology fusion is a significant threat. The most significant threat as the European Union and the Australian Defence Strategic Review, the National Security Strategy of the White House, the Japanese National Security Strategy, all point out. This is this is systemic, as the Europeans say. It's big. But but, you know, the US should be more confident and not approach this from a panic, but rather from a careful assessment, which I think Rob was trying to explain. Like banning TikTok is a little bit more symbolic. Let's focus on things that matter. I think the safety decoupling route has been identified by the White House, and that is selective decoupling, particularly in advanced semiconductor manufacturing, which is one of the critical inputs to AI, artificial intelligence. And on my recent trip to Japan, I spoke with leaders in this industry in Japan, and without saying who the consensus was, China is not going to be able to catch up, that China will probably not close that 10 to 15 year gap in advanced semiconductor manufacturing. They're building a lot of fabs because they have to because they're, Huawei is not getting inputs, but to to outcompete us now in AI, technologists I talked to in Japan think that the pathway is not through advanced semiconductor manufacturing. The Chinese are going to have to do a in American football. You call it a Hail Mary. I don't know what you call it in footy, but basically just throw the ball down field and hope somebody catches it in a new technology we don't know about yet, photonic something or other, but they've lost. They've lost the semiconductor race for AI in the view of a lot of technologists I've talked to, at least in Japan.

Dr Miah Hammond-Errey: [00:35:15] I think you've hit on a point there, and that is that the semiconductors have an incredibly narrow supply chain that is not easily replicated. You know, you're talking, about there's a broader number of companies, but ultimately, you know, the Taiwan Semiconductor Manufacturing Company or TSMC and ASML Holding the Dutch company that specialises in the development of photolithography machines, you know, they're two companies. And to have such a small supply chain that that you're able to influence in the way that that the White House has is very unusual. Most of the other technologies, either emerging technologies like big data, AI, biotech, they're democratising capabilities, they don't have narrow supply chains. So this is an incredible an incredible example, but perhaps not reflective of future technologies.

Dr Miah Hammond-Errey: [00:36:06] We're going to our final clip now, which is with Sue Gordon. This recording was part of the Technology and Security podcast Episode four, recorded with Sue Gordon in Washington, DC in May 2023.

Dr Miah Hammond-Errey: [00:36:18] We're seeing tech decoupling in some areas between the United States and China. What are some of the tensions? How far can it and should it go?

Sue Gordon: [00:36:27] Let's see if can go on three levels. Number one, tech decoupling is going to be really hard because our economies are really intertwined in a literal way, if you look at the Ukraine conflict, it was very easy for people to make a choice there in the private sector about whether to participate or not. Sanctions were relatively easy because it looked like it was a, we are separated so much that those things were easier decisions to make. If you fast forward to a China conflict, say, in Taiwan, I think those are much more difficult calls for our private sector to make in both the short and the longer haul because we just have intertwined economies. It's equally difficult for China as well. But I think I think decoupling is harder. We are trying to do it because what we've recognised is having critical supply chains not in our control is problematic as well as having different legal systems governing the activities of US or allied entities in adversary and competitor space yields problematic outcomes. So I think there's lots of good in making sure that we have offshoring of our supply chain in places that are more resilient for us, making sure that the legal framework in which our companies are acting is one that are in our best interest and that we separate where the decision making and investment is coming from. That said, do I think decoupling across the board is a good idea? I think that's actually antithetical, that has made free and open societies so successful in terms of producing the technologies that are actually transformative because you want the world's best talent to come there and you want that competition to be what drives it. And any time you make a more closed system, you're actually weakening the system that you already have. So I think I would break it down into what can't happen and set up systems against that. So again, offshoring is good. Not allowing Chinese students, I think is a defeating kind of strategy just because of what international students bring in terms of abilities.

Dr Miah Hammond-Errey: [00:38:41] It's an interesting argument because you do hear more in Washington about advocating for full decoupling. It's certainly not something I've heard much in Australia.

Sue Gordon: [00:38:49] Well, Australia has entirely different. And I think I think one of the reasons and you and I have talked about this, that I think our partnership with Australia is so important is Australia when it leads, leads with not just an adversarial approach but a competitive approach. And a competitive approach doesn't necessarily require decoupling in order to have strength. And I think that's just born of your geography, born of trade and your history. That means you have to succeed in that region. Ours is a little different. So I totally understand why in Australia you don't hear that. And I think one of the reasons why you do hear it more is because we've enjoyed such technological superiority for so many times that we think advantage is protecting. And I would argue you have to have something worth protecting. And that suggests that decoupling might not be in your favour entirely.

Dr Michael Green: [00:39:41] Sue is absolutely right. And there aren't very many politicians right now in Congress, who were doing what she says, which is standing up and saying 'This part, we should not decouple'.

Dr Miah Hammond-Errey: [00:39:51] I think it is just an ongoing balance. You know, we have to we have to allow some form of open innovation to be able to maximise the true potential of technologies. You know, so many of these technologies as every single, you know, interviewee has mentioned, rely on, on collaboration, on working together as multiple nations working together. So at some level that will have to be navigated. And I think it's not going to come down to a single discussion about whether we're open or closed. It will be an ongoing debate. We need to identify which technologies are critical and the dependencies that we rely on, and we need to make sure that we understand when we're saying something's dual-use or when we're saying something has a national security implication that it really does because it will become, the cost of protecting those will become increasingly high.

Dr Michael Green: [00:40:40] It's hard. There's a famous episode at the end of the Reagan administration. The Commerce Department was pushing for a much tougher stand on Japan on semiconductors, and the Treasury Department, which is more free market, said no. So a Treasury Department official said in the debate in front of President Reagan, I don't care if America is manufacturing computer chips or potato chips. And it leaked and the Commerce Department officials ridiculed him.