{"text":[[{"start":5.5,"text":"The writer is author of ‘Chip War’"}],[{"start":8.7,"text":"Donald Trump and Xi Jinping both smiled for the cameras at their summit last month but neither side has mistaken the tech truce for peace. Beijing has continued shipping some rare-earth magnets to the US, while Washington will postpone long-delayed restrictions on Chinese chipmakers. Behind the scenes, however, each side is sharpening its knives for a new wave of supply chain conflict."}],[{"start":32.75,"text":"Right before the summit, Beijing announced a sweeping set of regulations to penalise foreign companies for complying with third-party sanctions. This will be a powerful tool to squeeze multinationals to take China’s side amid future supply chain escalation."}],[{"start":48.65,"text":"Meanwhile, in Washington, Congress has pushed the White House towards a tougher line. The Republican-controlled House Foreign Affairs Committee has advanced a large package of export control bills. The Match Act would close loopholes that allow US allies more scope to sell chipmaking equipment to China than US companies have. Both the House and Senate have also proposed legislation to limit the ability of American companies to sell AI chips to China."}],[{"start":74.6,"text":"If both Beijing and Washington foresee the tech war continuing, what’s the logic of a truce? The answer is time. "}],[{"start":82.94999999999999,"text":"China believes that it is winning the race for advanced manufacturing — and in key sectors such as batteries and autos, it is. The US Chamber of Commerce recently released a report finding that China has a “dominant position in global value chains”. Nvidia, which has lobbied hard to sell its chips there, is an exception. Most US companies see China more as a rising competitor than a growing market."}],[{"start":109.19999999999999,"text":"China’s prowess in advanced manufacturing has even provoked Europe into throwing up trade barriers. Brussels is considering intensified restrictions via its proposed Industrial Accelerator Act. Yet Beijing has powerful tools to counter this. Last year, China’s export restrictions on rare earth magnets and Nexperia, a foundational semiconductor manufacturer, demonstrated its ability to choke European industrial production."}],[{"start":135.89999999999998,"text":"The US is also struggling to de-risk from Chinese supply chains. Washington may be pouring money into critical minerals projects but these will take time to materialise. Meanwhile, for the simpler semiconductors that undergird industrial production, the US is increasingly dependent on Chinese supply. Beijing has good reason to believe that its advanced manufacturing exports will continue to surge — and that Europe, the US and other key markets will fail to mount a concerted response. When it comes to industrial output, time may be on China’s side. "}],[{"start":168.59999999999997,"text":"What is Washington’s theory of the truce? Silicon Valley types talk of being “AGI pilled” — a reference to the film The Matrix — when referring to the belief that AI will become increasingly capable and economically transformative. The US government seems to be betting that AI will dramatically enhance US power, too."}],[{"start":188.44999999999996,"text":"Despite claims that China is rapidly diffusing AI across its economy, US companies such as OpenAI and Anthropic have 100 times more revenue than China’s leading AI start-ups. The capabilities of Anthropic’s latest Mythos AI model so spooked the White House that it is now debating AI regulation, despite previously criticising the Biden administration for doing so. The US has just placed a $9bn AI chip order for its spy agencies. This suggests US intelligence will have more computing power than many of China’s leading AI model companies."}],[{"start":226.39999999999998,"text":"Beijing doesn’t appear worried. When Chinese leaders talk about “great changes unseen in a century”, they’re not talking about AI transforming geopolitics. If Xi was worried about access to computing power, he would have accepted the Nvidia H200 chips that Trump is so keen to sell. "}],[{"start":243.89999999999998,"text":"True, Beijing blocked Meta’s purchase of Manus, a popular Chinese-founded AI application, and is reportedly holding the passports of leading Chinese AI researchers to prevent unauthorised travel. Yet in terms of spending, China is still pouring disproportionate sums into advanced manufacturing sectors instead of AI data centres. The disruptions of Hormuz, which vindicated China’s decision to stockpile industrial inputs, resonated more strongly in Beijing than the cyber security implications of Mythos. "}],[{"start":276.45,"text":"Instead of being AGI-pilled, Xi and other Chinese leaders are industrial output-pilled. The next year will test which of these approaches is more valuable."}],[{"start":291.55,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1780483659_2243.mp3"}