Conference Presentation, Fireside Chat, Panel, Hearing
The China Threat: Silicon Valley and the Great Uncoupling
- The outlook identifies war with China as a primary risk, stemming from a potential autocratic irrationality focused on regime preservation, a current U.S. lack of "deterrence by denial" posture following events in Ukraine, and an inability of the U.S. Army to effectively defend expeditionary bases against missiles and drones.
- There is a predicted severe consequence if U.S. hard power fails, with a potential conflict described as significantly more horrific than current crises in the Middle East and Ukraine, potentially forcing the U.S. to fight on an adversary's terms.
- Material expectations for U.S. military readiness highlight a failure to achieve maximum production rates for long-range precision fire and a reliance on an outdated cost curve, with a specific goal of building 2.5 Virginia-class submarines annually under Pillar 2 of AUKUS.
- Strategic plans include tightening technological relations with China by closing licensing loopholes (e.g., Huawei/SMIC, CyFIPs), restricting the flow of U.S. capital to Chinese sectors, and adopting sector-specific guardrails to replace fragmented licensing approaches.
- The outlook predicts geopolitical risks involving a blockade of Taiwan, which would cause a loss of trillions of dollars in global economic value and render U.S. treaty commitments to Japan and the Philippines impossible.
- Internal political challenges are forecasted, including a "big black hole" of distraction caused by the 2024 election, a lack of a trade agenda, and a grand strategic gap regarding the prioritization of climate change and engagement with the CCP.
- Domestic vulnerabilities are highlighted by a 90% focus on internal U.S. factors, including a regression in 15-year-old math scores on PISA tests, which is deemed a critical failure point for out-competing China regardless of semiconductor strategies.
- Risks to information security and societal cohesion are identified through the threat of TikTok serving as a platform to inculcate an antithetical worldview in the next generation, alongside concerns regarding human-based cyber threats like contractor misconduct.
- Economic and innovation plans call for the Department of Defense to act as a reliable customer rather than a venture capitalist, with a need for appropriations to fund "big bets" on non-prime companies and a future push for a digital trade agreement to replace the IPEF.
- Diplomatic and trade objectives include modernizing legal immigration for high-skilled labor, pursuing a gold standard free trade agreement with the UK post-Brexit with docking provisions, and ensuring ITAR regulations do not hinder technology sharing with allies.
- A material warning is issued regarding the billions of dollars currently flowing into Chinese technology and military firms for assets like aircraft carriers and fighter jets, driven by a lack of sufficient capital restrictions.
- The outlook suggests a future administration may implement a more restrictive framework regarding China while simultaneously deepening engagement with other nations, countering the "garden with a high fence" approach against lobbying excuses.
- Specific risks include the inability to harden targets for electoral systems, public water supplies, and utilities without bipartisan cooperation, and the potential for a future administration to tighten the "garden with a high fence" description to prevent its use as a lobbying tool.