Richard Suttmeier, Trends in US-China Science and Technology Cooperation, Sept. 11, 2014

The original U.S.-China science and cooperation agreement was signed by Jimmy Carter and Deng Xiaoping after the establishment of diplmatic relations in 1979. The executive summary of this report is below with the full document available at the link below. The commission's website is here.

EXECUTIVE SUMMARY

The governments of the United States and China have been cooperating in areas of science and technology (S&T) for 35 years under the 1979 U.S.-China Science and Technology Cooperation Agreement, which was renewed most recently in 2011. Over the years, the Agreement has facilitated a complex government-to-government relationship consisting of some 30 agency-to-agency protocols and more than 40 active sub-agreements and annexes between the technical agencies of the two countries in a wide range of fields including agriculture; energy; environmental protection; public health; earth, atmospheric, and marine sciences; basic research; standards and metrology; and nuclear safety.

Since the Agreement was first signed, varied and extensive S&T relations between the two countries have also developed outside the government-to-government relationship involving companies, universities, professional societies, nongovernmental organizations (NGOs), and various people-to-people contacts. The overall S&T relationship has thus become an exceedingly complex pattern of interactions involving S&T in support of government missions and the supply of public goods (mainly through the government-to-government channels), commercially relevant high-technology exchanges (mainly through corporate channels), and cooperation in basic research and higher education (mainly through university channels). Measured by co-authored scientific research papers, U.S. collaboration with China now exceeds collaboration with traditional partners such as the United Kingdom, Germany, and Japan. China and the United States have become each other’s main partner in scientific collaboration.

There have been many successful and mutually beneficial cooperative activities under the Agreement over the years, and the S&T relationship has been a positive influence on U.S.-China relations in general. At the same time, as the two sides face new geopolitical uncertainties and forms of commercial competition, the context for S&T cooperation has been changing. The manifest asymmetry in capabilities—which characterized the relationship in 1979—has been reduced as a result of the remarkable development of S&T in China, made possible by its own domestic policy initiatives and its strategic exploitation of international cooperative opportunities, especially those offered by relations with the United States. Meanwhile, demographic changes, educational failures, and U.S. budget politics have introduced uncertainties into the future of the U.S. research enterprise, the quality of which has served as a major “soft power” resource in U.S. engagement with China.

National governments around the world continue to strengthen policies designed to enhance national capabilities for research and innovation in order to capture value from scientific and technological advances, even as they also expand international scientific cooperation. Both China and the United States exhibit these tensions between “science and technology nationalism” and “science and technology globalism”; the relationship between the two countries is an especially rich case study in how these tensions are managed. The recognition by both sides that national research and innovation capabilities are critical assets in facing new security and economic challenges sometimes makes the identification of mutually beneficial, positive-sum programs of cooperation more difficult—though certainly not impossible, as a number of new programs of cooperation illustrate.

For instance, as S&T issues have become more salient in the overall U.S.-China relationship, especially with regard to energy and environmental problems, we have seen new high-level initiatives coming from presidential summit meetings and from the work of the Strategic and Economic Dialogue (S&ED). Some of these initiatives draw on existing relationships developed under the Agreement, while others call for new institutional arrangements. An especially interesting and ambitious initiative is the U.S.-China Clean Energy Research Center (CERC), which is characterized by the development of government-industry-university consortia on both sides, and by the development of innovative approaches to intellectual property issues.

More broadly, both the United States and China have a growing interest in promoting cooperation through public-private partnerships. This presages interesting new opportunities for integrating government, industry, university, and NGO capabilities, and in many cases is likely to give greater prominence to intellectual property questions. China’s policies to enhance the innovative capabilities of the country’s industrial enterprises and stimulate its involvement in international S&T cooperation reinforce this trend, increasing the likelihood that the roles of both state-owned and non-state-owned enterprises in cooperative projects under the Agreement will expand. More broadly, the international expansion of Chinese companies adds a dynamic new element to bilateral S&T relations as they pursue a variety of technology acquisition strategies. These pursuits include mergers and acquisitions, contract research with foreign universities and research centers, the establishment of their own research and development (R&D) centers abroad, and, at times, surreptitious acquisitions.

China’s strong commitment to its own domestic S&T development carries implications for its S&T relations with the United States and for its approach to international scientific cooperation more generally. China has built a number of important facilities for scientific research and technological development that are attractive destinations for individual researchers, companies, and academic institutions from the United States and other countries. China is showing a new willingness to fund an increasing share of cooperative activities with the United States, and seeks to expand its role in international scientific activities.

These are welcome “burden sharing” initiatives, but they also point to a changing balance of influence in the bilateral relationship, and to the likelihood of enhanced Chinese influence in multilateral affairs. While China will eventually face limitations on the growth of its own spending, it is clear that the leading role the United States has enjoyed—one based on the achievements, maturity, and administrative acumen of the U.S. S&T system—is not foreordained to continue in the face of robust Chinese commitments.

This is especially true when we consider that the resources the United States brings to the relationship are increasingly constrained. U.S. budget politics leave most technical agencies with budget limitations and uncertainties, making it difficult to develop and implement cooperative programs that could enhance U.S. interests. Congressional mandates constraining the China-related activities of the Office of Science and Technology Policy (OSTP) also make the development of more robust capabilities for managing the relationship with China more difficult.

More generally, the overall health of U.S. science—especially university-based basic science—should be a matter of concern. While the United States remains a world leader in S&T, its leadership no longer remains unchallenged. Its share of the world's published papers, for instance, has declined, and the health of its research enterprise increasingly depends on foreign-born scientists and engineers, many of whom are from China. A case can therefore be made for a more vigorous government approach to maintaining U.S. research and innovation leadership in conjunction with renewed partnerships with industry and higher education. This approach would include strong government support for maintaining basic research excellence and world-class public universities. For relations with China, it would entail the development of a more coherent, better-resourced, strategic approach to capturing value for U.S. interests by engaging with an increasingly capable and well-funded Chinese research and innovation system.

Over the 35 years of the Agreement, China and the United States have had somewhat different approaches and philosophies about the relationship. For the United States, cooperation with China in S&T has been more an exercise in science diplomacy, in which the abundance of S&T assets enjoyed by the United States could be used as tools in the pursuit of diplomatic objectives. For China, on the other hand, engagement with the United States has been more clearly a component of a national strategy to build scientific and technological capabilities. As time has passed, and as Chinese capabilities have increased, there is a growing interest in using S&T for diplomatic purposes in China as well, as evidenced by the inclusion of S&T in Chinese foreign assistance programs (especially in Africa) and offers by China to host the location of international science bodies. On the U.S. side, there is a growing realization that U.S. research and innovation enterprises can benefit from cooperative activities with China, and that engagement with China in S&T should be justified on more than political or diplomatic grounds. But, with the exception of initiatives coming from the Strategic and Economic Dialogue (S&ED), the United States has responded to this realization in a characteristically decentralized and somewhat disjointed manner. Although individual companies, universities, and selected government agencies have been active in spotting opportunities and developing strategies to exploit them, no clear overall national strategy is evident.
The presence of the sizeable Chinese professional diaspora in the United States sets China’s engagement with the United States apart from its S&T relations with other countries. The flow of Chinese students and scholars into the United States and back to China has further developed the relationship between the countries and strengthened Chinese S&T over the past three and a half decades.

The role of Chinese students who remained in the United States—establishing professional careers and in many cases becoming citizens—has also been important to expanding the bilateral relationship. It is a formidable task to assess the balance of benefits from these patterns of cooperation based on common ethnicity; such cooperation has helped China in its “catch-up” phase over the last 35 years and facilitated the flow of talented Chinese scientists to the United States, thus enriching the U.S. research enterprise and creating new opportunities for mutually beneficial relations.

China’s overall engagement with U.S. S&T has undoubtedly played a major role in the development of Chinese wealth and power. This is especially true with regard to the exploitation of higher education opportunities at U.S. universities and the transfer of U.S. technologies as part of U.S. companies’ business decisions—activities largely outside the terms of the Agreement. The government-to-government programs that are the main subject of this report have also contributed to Chinese development, but have not been conduits for the transmission of strategic information that could damage U.S. national security. In many ways, the flow of knowledge and technology to China that has occurred through various channels—governmental, industrial, academic, and ethnic—is a reflection of the relatively free, open, and decentralized nature of the U.S. approach to research and innovation. Observers around the world recognize these qualities as essential to U.S. leadership in science and technology.

For the most part, the government-to-government relationship is not a conduit for the transfer of sensitive technologies. The fact that the relationship does involve training and visits to U.S. laboratories, however, ensures that knowledge transfers occur. U.S. concerns over transfers of sensitive scientific knowledge or technology have led technical agencies to put in place mechanisms to vet visiting scientists and engineers. Overall, though, the government-to-government relationship is much less a conduit for technology transfer than commercial relations or academic channels.

In sum, the U.S.-China S&T relationship has become a complex, multifaceted pattern of engagement, particularly as China brings new capabilities, new wealth, and a strong sense of strategy to its S&T interactions with United States. These twenty-first-century realities offer new challenges and opportunities for the United States, and warrant both a reconsideration of U.S. goals for the relationship and an assessment of the policy and organizational resources available for meeting those goals.