The Technology Race in the Era of Economic Security: How the United States Can Regain Its Future Advantage

The Technology Race in the Era of Economic Security: How the U.S. Can Regain Its Future Advantage

After decades in which globalization operated with efficiency as its sole creed, the world is now paying the price. The COVID-19 pandemic did not merely sever supply chains—it exposed the fragility of deep interdependence. The Russia-Ukraine war has shown that energy and food can serve as strategic weapons. As these shocks converge, a concept once relegated to the fringes of national security—economic security—has rapidly become the central arena of great-power competition.

It is against this backdrop that the latest bipartisan task force report from the U.S. Council on Foreign Relations (CFR) puts forward a core judgment: America's leading position in the three foundational technologies of the future—artificial intelligence, quantum computing, and biotechnology—is being eroded by intensifying strategic competition, and the principal competitor is China.

The Erosion of Technological Advantage

The CFR report shows that over the past decade, the Chinese government has invested as much as $900 billion in AI, quantum technology, and biotechnology, and has made rapid progress in AI model performance, quantum communication, and biotech innovation. This large-scale, state-led technological catch-up is aimed not only at industrial upgrading but also at seizing the "commanding heights" of the future global order.

By comparison, while the United States still holds a lead, it is no longer secure. Private capital's willingness to invest in long-cycle, high-risk fields such as quantum technology and biotechnology has been insufficient, resulting in a clear early-stage funding gap. The report specifically notes that in the first half of 2025, early-stage funding for U.S. biotech startups fell by 65 percent. In the quantum sector, China's spending has already reached twice that of the United States.

Choke Points in the Supply Chain

Even more alarming is the possibility that America's dependence on China in critical supply chains could become a fatal vulnerability in a future conflict. The data show that the United States relies on China for 70 percent of its rare earth supplies, with dependence as high as 99 percent for heavy rare earths. In electronics, 30 percent of printed circuit boards and 60 percent of chemicals come from China. In biopharmaceuticals, 80 percent of key starting materials (KSMs) and 33 percent of global active pharmaceutical ingredient (API) production capacity are concentrated in China, and 80 percent of U.S. biotech companies have at least one contract with China.

These figures reveal a structural risk: the United States develops cutting-edge technology yet relies on a potential competitor for critical raw materials and components. The report points out that for certain specialized components in quantum devices—such as laser diodes, mirrors, and amplifiers—there is even single-supplier dependence. This "stranglehold" problem has escalated from a commercial vulnerability into a national security issue.

Rebalancing Economic Security and Market Logic

The value of the CFR report lies not only in enumerating risks but also in proposing a set of intervention principles. The report argues that the legitimate basis for government intervention in the market in the name of national security lies primarily in market failures. The market failures currently most damaging to U.S. national security are, first, insufficient private capital investment in strategic sectors, and second, the excessive concentration of critical supply chains in non-friendly countries.Based on this, the report proposes a series of specific recommendations: relocate the production of key semiconductor inputs back to the domestic sphere, including chemicals, printed circuit boards, and IC substrates; accelerate the development of the world's first utility-scale quantum computer through Department of Defense procurement; establish a national network of advanced biomanufacturing centers and fund companies to maintain six-month safety stockpiles of KSMs and APIs; expand defense reserves and expedite permitting for critical minerals; and establish an Economic Security Center at the Department of Commerce to strengthen government coordination and technical expertise.

Behind these recommendations lies a deeper long-term judgment: technological leadership is not just about commercial competitiveness, but also about the power to set rules. If the United States falls behind, other countries will have the opportunity to shape an international system that reflects their own interests. And whether democratic nations can build resilience while remaining open is the true test of this competition.

Conclusion: From Efficiency Logic to Security Logic

The rise of economic security policy marks a shift in the world from "efficiency first" to "security first." This transformation is not a thorough rejection of globalization, but a strategic correction targeting specific risks. For the United States, the key lies in striking a balance between fostering an innovation ecosystem and preventing security vulnerabilities. The analytical framework provided by the CFR report—identifying market failures, targeted intervention, and strengthening government capacity—may indeed be a pragmatic path for responding to this new era.

In today's era of accelerating technological iteration, policymakers must also confront a dynamic challenge: the key technology identified today may be replaced by new breakthroughs tomorrow. Therefore, establishing flexible institutional arrangements is more important than pursuing temporary leadership. This race over future technology is, in essence, a race over governance capacity and strategic foresight.