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Illustration: Aïda Amer/Axios

A new set of proposals by a group of influential D.C. insiders and tech industry practitioners calling for a degree of "bifurcation" in the U.S. and Chinese tech sectors is circulating in the Biden administration. Axios has obtained a copy.

Why it matters: The idea of "decoupling" certain sectors of the U.S. and Chinese economies felt radical three years ago, when Trump's trade war brought the term into common parlance. But now the strategy has growing bipartisan and even industry support.

The report, called "Asymmetric Competition: A Strategy for China & Technology," was authored by an informal working group formed last summer with 15 participants writing in their private capacities, including:

  • Eric Schmidt, former CEO of Google and technical adviser at Alphabet, and co-founder of Schmidt Futures. (Google exited China in 2010 while Schmidt was CEO).
  • Jared Cohen, CEO of Jigsaw, a tech incubator created by Google, and former adviser to Condoleezza Rice and Hillary Clinton.
  • Richard Fontaine, the CEO of the Center for a New American Security, whose co-founder Kurt Campbell now occupies a top position on Biden's National Security Council.
  • Liz Economy, China scholar at the Council on Foreign Relations and Stanford University's Hoover Institution.
  • Alexandr Wang, CEO and founder at Scale AI.
  • Marissa Giustina, a quantum electronic engineer at Google.

What they're saying: "America’s technological leadership is fundamental to its security, prosperity, and democratic way of life. But this vital advantage is now at risk, with China surging to overtake the United States in critical areas," the authors write.

  • The report "advances policies that position the United States to out-compete China without inviting escalatory cycles of confrontation, retaliation, or unintended conflict."

The nature of the challenge, according to the report:

  • The competition is "asymmetric," meaning "China plays by a different set of rules that allow it to benefit from corporate espionage, illiberal surveillance, and a blurry line between its public and private sector."
  • We're heading towards separate tech spheres. "Some degree of disentangling is both inevitable and preferable," the authors write. "In fact, trends in both countries — and many of the tools at our disposal — inherently and necessarily push toward some degree of bifurcation." That's because the alternative to bifurcation is a world in which China's non-democratic norms have "won."
  • There will be trade-offs, such as between "creating risk-tolerant research environments that encourage innovation versus security/espionage risks."

Their proposed solutions:

  • The creation of a national tech analysis and forecasting center.
  • Building more resilient supply chains by investing in domestic infrastructure and "ally-centric production."
  • Improving education and reducing immigration bottlenecks to ensure a strong supply of highly skilled labor.
  • A government redesign across the executive branch to guide a "new era of technological statecraft."
  • New multilateral initiatives, including an alliance of democracies called the "T-12" to coordinate responses to tech competition, an "International Technology Finance Corporation," and the creation of "multilateral trust zones" where integration can be safely achieved.

What to watch: Whether or not the proposal gets traction in the Biden administration, its emphasis on multilateralism fits with the administration's goals and priorities.

Editor's note: This story was updated to reflect that the report's authors were writing in their private capacities and that Eric Schmidt is also a co-founder of Schmidt Futures.

Go deeper:

Go deeper

Updated Jan 27, 2021 - Axios Events

Watch: Global data-driven change

On Thursday, January 27, Axios' Ina Fried hosted a conversation on the social impact of Big Data, featuring Rep. Yvette Clarke (D-N.Y.) and former U.S. chief technology officer and founder and CEO of shift7, Megan Smith.

Megan Smith. unpacked how data can help solve some of the biggest equity issues across our economy and society today, and the importance of having everyone at the table.

  • On solving social issues that are exacerbated by new technologies: "It's just not for the tech community to decide [how to fix this] on behalf of all of us, especially because they face extraordinary bias in their hiring practices and their teams' dismissiveness of people who are not of a certain group."
  • On how the government should approach solving problems that cross technological and policy divides: "The key there is less about what and more about who. Who is in the government teams, who is actually in the tech teams? Are they more balanced? How do we get more of society at the table together so that we're more fluent as we work on this?"

Rep. Yvette Clarke highlighted the risks and rewards of using Big Data, as well as the shared responsibility of the public and private sectors to keep the public informed.

  • On how algorithms can amplify existing biases: "[Big Data] can be great in making advances in our civil society. The other side is it can become a mirror of some of the inequities that exist in the real world...and that reflection can be programmed into algorithms."
  • On a balanced approach to technology regulation: "I really want to make sure that the public is educated and informed...[That] we also hold the companies accountable for the ways in which they perpetuate harm in certain respects and reward where they're doing good."

Axios' Chief People Officer Dominique Taylor hosted a View from the Top segment with Intel Executive Vice President and Chief People Officer Sandra Rivera to discuss collaboration and creating change from within the tech industry.

  • "We have convened other industry leaders to really drive meaningful, lasting change forward. This is such a big challenge and opportunity. It doesn't really work that any one company can do [it] alone: We take our role in terms of leading that work by participating, collaborating with other tech giants."

Thank you Intel for sponsoring this event.

Ant Group gets new marching orders from regulators in China

Illustration: Sarah Grillo/Axios

Uncertainty surrounding the future of China’s giant fintech company Ant Group cleared up on Monday after years of friction with its domestic regulators.

Driving the news: Ant is shedding its cool tech image and stepping into a new identity as a financial holding company — the result of forced changes by several banking and securities agencies in China.

Updated 2 hours ago - Axios Twin Cities

Police: Officer who shot Daunte Wright accidentally pulled gun instead of taser

The officer who fatally shot Daunte Wright, a 20-year-old Black man, outside Minneapolis Sunday appeared to have inadvertently pulled out her gun instead of a taser, police said.

Driving the news: "This appears to me, from what I viewed in the officer's reaction and distress immediately after, that this was an accidental discharge that resulted in the tragic death of Mr. Wright," Brooklyn Center Police Chief Tim Gannon told reporters Monday.