The US-China Tech Cold War Made Easy

Technology = Finance (Cs)
Right now the technological developments, and scientific research, are a function of a very precious element: Cesium (atomic symbol Cs).

In sourcing it, Technological companies are highly dependent on the price, a factor that can strongly affect the financial decisions of the main Industry’s actors.

But as Economics teaches us, the Price is not only a function of the Demand but also of the Offer.
And right now, who exactly controls the Cesium production worldwide?

China, accounting for the 96% production of this material, a condition that allows the potential of determining and planning its price to incentivize technological companies to move in Chinese Market their production and the following developments.

This material, in fact, is utilized as an extremely precise instrument to measure the time, defining deeper frequency intervals for each instant of time.

This would enable the developments of 5G technology, alias faster connection, and consequently, an increase of information collected: and in Finance as also in the Scientific Research, the quantity of data and the frequency of its collection means everything.

The spread of 5G technology worldwide, mainly driven by China thanks to the cheaper prices of materials, implies a scenario where data is potentially collected and analyzed (as in the case of the Companies’ information) by new actors, bringing to multilateralism of concurrency.

This is, in fact, the age of IoT and Artificial Intelligence, and collecting the data and having the right talent working on it is fundamental for the main Geopolitical actors.

This is also why the attractiveness of a City – as Hub of Talents – is becoming more and more important for Governments, that are focusing on developing Smart Cities to minimize the “Customer’s Pain” and increase the general level of satisfaction – given the trend of the Worldwide Economy towards a Cognitive Oligopoly.

The chart above shows that from the side of the Talent (in the war of Cognitive Resources against Material Resources), the US is the top destination or source of it.

In fact, thinking about large numbers, the likelihood of having a highly talented individual who produces developments into the AI field (mostly from the data processing perspective more than the overall computing power) is greater in the US, also given the stronger attractiveness in terms of soft power (also for structural historical reasons).

But something can soon change, since not only the increasing of the STEM focus of the Chinese education system but also given the recently AlphaGomuscle show” of the US to China, that impressed the public opinion bringing for a call towards the explorations of this subject on a massive scale.

In fact, there is no doubt AI will have a huge impact on the Chinese socialist-based economy, where 1 out 4 of the RMB produced will be accounted directly to the AI.

The main source of risk of this trend, in terms of the failure of developing technological advancements, is the potential perceived lack of incentives to innovation in the Academical system, according to a survey conducted in Shangai.
This factor, in fact, can reduce the number of extremely talented individuals coming out from this large pool of candidates.

A situation where the US can profit increasing the Soft Power in the Asian countries, attracting more individuals inside their innovative ecosystems to boost American innovation and productivity.

A strategy that the “Uncle Sam” is trying to follow from the starting of outsourcing to China: automation and productivity is the way to beat the low-cost manufacturing production costs.

The pressure to reach innovation for China will increase following the stop of the “Silk Road” developments, since the sea transports (that accounts for the moving of 90% of Goods traded) being under the Land of Liberty sphere of influence are hard to access, and also given the financial difficulties of Italy that make it hard to complete one of the main step (The Free Port of Trieste) for the Asian Giant to access to the EU Market (historically the main decisive actor of the Worldwide economical forces).

Being conscious of the structural US capabilities (of attracting individual talents), the China government is expanding in the direction of the Supply Chain of critical materials (at least for the US) to build an “insurance” and generate a response incentive offering cheaper prices inside the internal market

US needs to Import a lot of Critical Materials (including Cesium) and this could be used by China to attract tech companies in their market offering the resources to a cheaper prices.

The main problem of this strategy is the perception from the military implications (the principal US power pillar) of the biggest Employer of the world (U.S. Department of Defense), which sees it as a potential future threatening for military technological developments.

What will happen in the next future? It depends since Finance is strictly dependent on the Geopolitical power balances defined by the Military capabilities, which determine the economic and technological developments of the countries.

A Tech Cold War is coming, or is already started, and only the future will establish if the pay-off of this competition is positive or negative for the Scientific development.

Make your bet, remembering that China has a very little time window before its population becomes too old so sustain innovation as before.

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