China is outpacing the U.S. in critical technologies—preserving American leadership demands urgent, systemic, and strategic reform across innovation, regulation, and global alliances.
The United States is losing the technology race with China. This is not hyperbole but rather a strategic reality demanding immediate action. China’s coordinated state-driven approach is eroding America’s technological edge across artificial intelligence, quantum computing, advanced manufacturing, and supply chain dominance. This erosion represents an existential threat to our economic prosperity, national security, and global influence. Recapturing our lead requires a fundamentally reimagined response.
America’s Technological Challenge Demands Systemic Changes
The United States is ceding ground to China across multiple critical technology fronts simultaneously. China’s dual-circulation strategy and military-civil fusion approaches represent a comprehensive, whole-of-nation approach that is outpacing America’s efforts in advancing the tech sector. While we debate incremental policy tweaks, China is executing a coordinated strategy that systematically targets U.S. vulnerabilities.
The competition with China is not merely about who produces more or marginal performance improvements. It is about whether democratic or authoritarian values will shape the future technological landscape, and thus, the global landscape. As I emphasized in New Lines Institute’s recent compendium “Future-Proofing U.S. Technology,” this rivalry “represents a systemic challenge that cuts across economic, security, and diplomatic domains” and requires a comprehensive strategic response harnessing America’s innovative capacity while protecting critical technologies from exploitation.
Isolated policy interventions and narrow technological fixes are simply insufficient. Instead, we must strengthen the systems that have formed the foundation of American technological power for decades. Our research ecosystem, manufacturing base, human capital development, and international partnerships are floundering from a lack of strategic direction, worsened by significant budget cuts from the second Trump administration. Without systems-level transformations, America’s technological decline is only likely to accelerate in comparison to China’s rise.
Effective Policy Requires Precision Targeting, Not Broad Regulation
Our current regulatory approach to tech is fundamentally misaligned with the challenge we face. Because more complex technologies have more complex supply chains, industrial controls in the U.S. critical technology sector must be targeted and precise to prevent regulations from becoming unwieldy, vague, and ultimately ineffective. Overly broad restrictions are not merely inefficient. They actively undermine American competitiveness by stifling the very innovation that the U.S. relies upon to win the tech race with China.
The cybersecurity sector plainly illustrates this dilemma. Several proposals have been made to force large technology firms to improve their cybersecurity practices. However, the limited competition for service provision in cloud computing and other critical technology services skews the power dynamics between firms and the government, making effective regulation nearly impossible without unintended consequences that harm American competitiveness.
A more nuanced approach is critical. While controls are needed to protect the most advanced defense tech from reaching Beijing, policymakers must keep in mind that the ideal approach for relationships is built on careful and intentional cooperation, not isolationism and conflict. The administration’s current approach risks overcorrecting toward technological isolation, accelerating America’s decline rather than reversing it.
Innovation Requires Breaking Free from Paradigm Traps
America’s technological rejuvenation demands that we break free from current paradigm traps that constrain our thinking and investment. In artificial intelligence, U.S. leadership should not be defined by machine learning alone. Neuro-symbolic AI, which synthesizes techniques from traditional and contemporary approaches, represents a promising path forward that builds on existing strengths while addressing fundamental limitations in current AI systems. Rather than merely chasing computational scale, we must pioneer these next-generation approaches.
Similarly, in cybersecurity, the industry needs a shake-up to break free from the pattern it has followed over the past several years, in which a few large cybersecurity vendors control the lion’s share of the market while successful cyberattacks compound year after year. Their “black box” solutions often mask fundamental vulnerabilities while creating dangerous dependencies.
Federal research and development funding must be dramatically expanded, not incrementally adjusted, and certainly not slashed. The U.S. government’s support for basic research was critical before the ascendence of expert systems, and similar bold investments are essential today. The current administration’s approach to R&D funding represents a dangerous retreat from the very investments that underpin American technological leadership.
Critically, we must forcefully challenge the perception of technology as a Silicon Valley phenomenon. This narrow geographic and demographic concentration of technological development represents a strategic vulnerability by constraining our national talent pool. The average American does not feel personally connected to the U.S. technology sector and does not trust Big Tech. Public buy-in is needed to support more risky R&D that may pay dividends in our capacity for innovation. New pathways must be created for Americans without college degrees to participate meaningfully in the tech workforce, transforming technological development from a coastal enclave activity to a nationwide endeavor.
Alliances Are The Cornerstone of Technological Leadership
American technological leadership cannot be secured through domestic policy alone. It demands a fundamentally reinvigorated alliance strategy. To believe that all tech supply chains can be recreated domestically and AI diffusion will occur simply due to American exceptionalism is foolish. International cooperation is not optional, but rather essential, for establishing AI standards that reflect democratic values rather than authoritarian control. If the U.S. fails to lead this effort, China will fill the vacuum, embedding its values into the technological architecture of the 21st century.
Supply chain security represents a particular imperative for alliance-building. Limited U.S. mining and refining production capacity has led to heavy reliance on imports, particularly from competitors like China. While the administration’s desire to purge Chinese influence from allied supply chains may be beneficial in concept, its execution remains unclear and potentially high-risk. Coercive tactics and unilateral demands—especially those unrealistic for allies to implement—risk alienating the very partners whose cooperation is essential.
The administration must radically shift from stick to carrot in its approach to technological alliance-building. If allies calculate that the costs of alignment with American technological objectives outweigh the benefits, they will inevitably drift toward accommodation with China. Only by offering meaningful economic and security incentives can the United States build the coalition necessary to counter China’s technological ambitions.
This Moment Demands a Decisive Strategic Response
The technological competition with China represents the most consequential strategic challenge of our generation. At stake is nothing less than whether the technological architecture of the coming decades will reflect democratic values or authoritarian control. Yet America’s current trajectory signals declining influence—and the risk of eventual subordination to Chinese technological dominance.
This outcome is not inevitable, but averting it requires decisive action across multiple fronts simultaneously. We must transform our regulatory approach from blunt restriction to precision targeting. We must break free from current technological paradigms and invest boldly in next-generation approaches. We must broaden participation in technological development across geographic and demographic boundaries. We must rebuild our international alliances based on mutual benefit rather than unilateral demands.
The time for incremental adjustments and half-measures has passed. If America fails to respond comprehensively to this challenge, the consequences will extend far beyond economic metrics to the very nature of global order in the 21st century. The choice is stark — transform our approach to technological development or cede leadership to an authoritarian rival whose values fundamentally conflict with our own.
About the Author: Kelsey Quinn
Kelsey Quinn is the Program Head and Analyst of Tech Sovereignty & Security at the New Lines Institute, investigating realistic approaches to mitigating current and future harms of emerging technology that do not impede critical innovation and scientific discovery.
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