Decoding the Techno-Economic Power Struggle, With Alex Capri

There is a clear linkage between technology and national security, economic strength and social stability. Rob and Jackie sit down with Alex Capri, author of Techno-Nationalism: How It's Reshaping Trade, Geopolitics and Society to discuss how nations leverage technological innovation for national security and stability and how that applies to evolving United States-China competition.

Mentioned

• Alex Capri, Techno-Nationalism: How It's Reshaping Trade, Geopolitics and Society, (Wiley, December 2024).
• Orville Schell and John Delury, Wealth and Power: China's Long March to the Twenty-first Century, (Random House, July 2013).
• Robert D. Atkinson, “Liberation Day: Explaining Trump’s Tariffs,” (ITIF, April 2025)

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Rob Atkinson: Welcome to Innovation Files. I'm Rob Atkinson, founder and president of the Information Technology and Innovation Foundation.

Jackie Whisman: And I'm Jackie Whisman. I head development at ITIF, which I'm proud to say is the world's top ranked think tank for science and technology policy.

Rob Atkinson: And this podcast is about the kinds of issues we cover here at ITIF from the broad economics of innovation to specific policy and regulatory questions about new technologies. So, if you're into this stuff, please be sure to subscribe and rate us.

Jackie Whisman: Our guest is Alex Capri, who teaches in the business school at the National University of Singapore. He's the author of Techno-Nationalism: How It's Reshaping Trade, Geopolitics and Society. And that's what we're gonna talk about today. Welcome. You're not in Singapore; you're in the United States. So, we caught you at a good time.

Alex Capri: And very happy to chat with you.

 Your book is extremely comprehensive with chapters on key issues related to techno-competition, particularly with China. Explain how you see techno-competition.

So, techno-competition or techno-nationalism, as I describe it occurs between nation states. It's because governments perceive technological prowess, innovation which is linked to their own national entities, their own markets as a precursor or as a very critical element in national defense and security, economic strength and security, and now increasingly social stability because of all the technology that is powering social media and information wars and narrative wars and those types of things. There is a clear linkage then between technology and those three elements. Now I break techno-nationalism down into six core elements and that's the framework that I've used to analyze this greater phenomenon that's occurring around the world.

The first element is supply chain weaponization, which essentially means that governments actively use things like export controls and sanctions. And increasingly now scrutiny on outbound foreign direct investment, where's it going? Is it traceable? And of course, blockages of strategic acquisitions.

So that is the first element. And the second element is a direct result of the first, which involves active de-risking or even decoupling of strategic supply chains. The third element, again, a result of the first two involves things like reshoring of industry, nearshoring, localizing supply chain resiliency efforts, et cetera.

The fourth element is all about I think Rob, which you've called innovation mercantilism in the past, but essentially when governments actively look to fund and become catalysts of large-scale innovation. Around key strategic industries. The fifth element, which is very important, and we're seeing a breakdown of that under the Trump 2.0 era, and that is tech diplomacy, right?

How do governments engage other governments to pursue their techno-nationalist agendas jointly? How do they strike up partnerships and alliances around techno-nationalism? And then the sixth element is really more of an existential phenomenon. And that is that we, all of this is occurring. All these things that I've just described are occurring in a kind of murky sort of hybrid cold war environment where good and evil walk next to each other everywhere. And you have you have cyber intrusions and cyber, the risk of cyber warfare and cyber theft along with disinformation campaigns and all of these things happening even as companies and businesses look to trade, look to increase trade and engage in commercial activities.

Jackie Whisman: You've worked in China or worked around it for many years, and you write about how at the beginning you didn't understand or see what China was doing, but now you recognize it as the beginning of the great power competition. How did that evolution take shape for you?

Alex Capri: I think for any expat that was in China, really, even in the early 2000s and was exposed to China's five-year plans, was exposed to a lot of the not just the rhetoric, but the discussions that happened. In boardrooms at large multinational companies. I was of course a consultant in the professional services industry.

So, I was working with and consulting with virtually all of the big companies, American, European, Japanese. It didn't matter as they were investing in China, they were building capacity in China and they were sinking a lot of really important capital into their China operations.

So even in that context, there were discussions about the importance of, China's return to greatness. The century of humiliation. As I write about in the book, this sensitivity in China that it had been wronged by the West and therefore, the end justified the means as to how China got back to its, its place in history.

And that meant really, frankly, preemptive decoupling being practiced by China, for decades now in terms of protecting its local industries in terms of demanding technology transfer from the West and so forth, so that it became apparent. Even two decades ago that this wasn't going to end well, right?

This was eventually going to reach ahead especially as China assumed more and more power and became more and more of a critical player economically. And of course, now militarily in the global system. So, I think the writing really was on the wall and has been on the wall. And I think we in the west, I think chose to engage in short-term thinking.

Not really think responsibly when it came to managing this situation.

Rob Atkinson: Alex, you mentioned that, their sense of humiliation. I was reading a book, I think it was Wealth and Power by Orville Schell, but if I get it wrong, I don't want to wanna have Orville say I got his book wrong. He noted that one of the reasons why the British got involved with opium trade is that the Chinese emperor refused to allow export of British textiles. They had a trade barrier. They had a Trump tariff on British textiles. And so, the British were importing a lot from China, particularly silks, and so they needed to balance trades, so they ended up getting into opium. So, I thought it was really interesting that, it was originally Chinese protectionism that led to this, or contributed to it is probably a better term. One of the things that I think I really enjoyed about this book is it's almost like a, I don't wanna say an idiot's guide, because that suggests that it's not sophisticated, which it really is.

But you deal with every issue. You wanna talk about semiconductors, bang, you wanna talk about export controls, bang. It's almost like an encyclopedia. Which I found quite useful. I think other readers would find it the same way. You can read five chapters if those are the ones you're interested in, or you can read the whole book. But any case, what do you think China's ultimate goal is here in techno-economic competition? What do they want?

Alex Capri: Look I think it's overtly stated Xi Jinping has said time and time again that self-sufficiency right in the strategic technology area is critical to China's success. And that has only been enhanced, that point of view, through the chip wars that we've been enduring and the rolling out of multiple rounds of US export controls.

So, I think self-sufficiency, more domestic consumption, all are very important to Xi when it comes to not just being able to reduce dependencies and obviously mitigate risks around supply chain weaponization, but also to grow. The 12 strategic industries right to make China a world leader, right?

And so, the 12 industries are, which I pretty much have a chapter for each one of these in the book, are obviously, semiconductors as you've mentioned, Rob. AI in all of its various permutations. Machine learning, LLMs, obviously, quantum hypersonics, biotech sensing, timing, technologies, aerospace, these types of things.

So, China wants not only to be self-sufficient, but they also want to be a world leader. And if, as they are of course, from a techno-nationalist perspective, investing massively in those 12 strategic technologies.

Rob Atkinson: So, I think as they would say, it's funny, we have as every organization, you have young people working for you and none of 'em know what the $64,000 question is. So, here's the $64,000 question. China definitely wants technological self-sufficiencies. They can't get whip side by the us. They definitely want global leadership, but do they want global dominance? I guess that's the real question. Do they see the world big enough? Is it, this bar is not big enough for both of us, or is it just we'll be big, you be big and long as we're self-sufficient.

Alex Capri: That is the $64,000 question. I guess now, because that's a dated show we got the million-dollar question. But look, this idea, and this is one of the key questions I posed in the book, is: Can the US and China achieve competitive coexistence? Can we continue to see large volumes, even increasing volumes of trade in an environment maybe where the where global value chains are, in my opinion, stacked or striated, right? We're looking at three levels of trade, right? And at the top you have all of the strategic goods that we've been describing. Those or that part of the global value chain stack, if you will will continue to bifurcate. Because these things are techno-nationalists because they pertain to national security, et cetera.

So, I think we will continue to see a bifurcation of the tech stacks in the key strategic areas. The second layer is what I call the gray zone. That involves thousands of dual use technologies that are traded at high volume. But that situation literally could change overnight, right?

As new companies get added to the entity lists. And that could be driven, of course, by some exogenous event. That maybe something in the Taiwan Straits or the South China Sea escalation of the Ukraine, Russia war with China somehow implicated. So that's really where I think supply chain managers, trade managers, strategists anybody navigating a business, that's where they're gonna earn their money, right?

Figuring out how to mitigate risk, figuring out how to navigate that gray space. And I think the third area, the bottom layer of the stack, would be the other sort of consumer related maybe, food and beverage or, whatever low end consumer electronics, et cetera, that maybe nobody really cares that much about. Where it's made and where it's going. So, the short answer is we don't know. We don't know can these two superpowers find a way to coexist. And it might be messy, it might be dragged out. We may have all kinds of frictions, but at the end of the day, we could see a situation where we have this stacked global economy chugging along for an extended timeframe.

Rob Atkinson: Yeah, that's interesting. I have my own view, which is this is a mixed martial arts battle to the death. And the only way it's not that is if we bifurcate to some extent we'll protect Airbus and Boeing in our markets. You can have Comac in your markets but anyway. We can't have this conversation today. It is April 18th, I believe, with, without discussing the giant elephant in the room, which is the 240% tariffs or whatever they are today on China. And I think China just announced they're not going above 120. But they're gonna do all these other things to screw us over. What I don't think people really fully understand is that's pretty much full decoupling. That's 90% decoupling certainly. Certainly them coming into us. You're not gonna pay. There's a great Onion cartoon. And it was this Chinese guy: I can't believe I worked 12 hours a day at 6 cents an hour to produce salad shooters for America. Why do you need salad shooters? So, if a salad shooter costs 20 bucks, we're not gonna pay 65 bucks for it kind of thing.

And we don't know what Trump's gonna do and it's all gonna play out, but it's a pretty, pretty big deal. 

Alex Capri: That's a really important point. Rob, I think, I'm sitting here today on the 18th of April thinking that there may still be some transactional outcomes here where we might possibly see a winding down of the tariffs. Now, if that doesn't happen then obviously the incentive, as you point out to trade pretty much anything with that type of tariff on it I think is going to pretty much lead to pretty rapid decoupling.

I don't think there's any way to avoid that. And remember also that, once tariffs are imposed, historically, look at Smoot Hawley, right? Going back in the 1920s, it really took after the second World War I, it took many years through the GAT rounds in particular, which, and then obviously ended up not being that effective, the last couple of decades, but it took a long time to unwind tariffs that had been put in place. I think going back to what I've been talking about and what I think I mentioned earlier, and that is that. The global economy is going to not just bifurcate around these strategic areas, but it's gonna fracture and it's going to regroup, if you will, into new groupings.

With, again, the Europeans and the Canadians and others that embrace a sort of a WTO free trade kind of world. Trying to work to resurrect that sort of thing. And then parties that, that don't play by these rules, in this case, presumably it would be the US under the Trump administration, they get left out. I think China still has a trust issue with the Europeans. I don't see this oversimplified argument really playing out where the US has driven the world into China's arms. Yes, they will talk with China. Yes, there, there would be continued trade with China, maybe even some increased trade, but China still is viewed as a security threat in Europe.

Clearly China's linkage to the Ukraine War through Russia and other things mean that the world's gonna be pretty fragmented going forward., I.

Rob Atkinson: You had a concept that I thought a very good concept call the great reorganization, and that's all those things we're talking about, the great reorganization away from the Francis Fukuyama utopian of one global market to rule us all, and now we're in this great reorganization.

Alex Capri: And I actually cited Francis Fukuyama, when I was a grad student at the London School of Economics a long time ago now, the mid 1990s. His writing was very influential to people like myself, right? The borderless world book, a book that he wrote.

And as you say, this idea that globalization combined with the fourth industrial revolution was really creating this new era. And we enjoyed it. It was a very serendipitous kind of three decades. We were just lucky to have different factors all come together at once, right?

But ultimately the major incongruities between China and the United States when it came to their economic models, ultimately was gonna resurface, as I pointed out.

Rob Atkinson: Yeah, absolutely.

Jackie Whisman: In the world we're in now, it's hard to predict more than one day at a time. But if you had to predict, where do you see the results of the US-China tech competition being in say, five years?

Alex Capri: Like I said, I think from a techno-nationalist standpoint, we will have a much more decoupled and bifurcated world with strategic supply chains around those 12 power multiplier technologies. What had surprised me or what I was not prepared for with Trump 2.0, is the abandonment, if you will, of working with historic allies around techno-security issues.

We'll see again, in this very transactional ad hoc environment. We will have to wait and see whether Trump gets enough pushback from industry and, high net worth individuals that financed his campaign. To back off and reengage with allies, right?

 This must be the nightmare of Marco Rubio, the secretary of state who's a essentially a NeoCon and sees the value of strategic partnerships and alliances when it comes to competing with China. We have to wait and see how that will play out, right?

That's the techno-diplomacy element of techno-nationalism. But it's gonna have to the United States is going to have to work with partners and allies to achieve a lot of its techno-nationalist objectives.

Rob Atkinson: Yeah, absolutely. Alex, we need to begin to wrap up, and it reminds me of a piece I wrote just a couple of weeks ago that I was so frustrated by hearing people like Paul Krugman and others saying, Trump is an idiot. Trump has no plan. He is just pulling this stuff outta you know where, and I'm like, no, no, no. There is a strategy.

There's a vision, there's a goal. In my opinion, between what they're trying to do, you can then argue is it the right goal? And then you can argue even if that's the right goal, is it the right tactic? But I think you made a really key point Rubio is, and I really have a lot of respect for Senator Rubio worked closely with him when he was in the Senate.

He super strong on these kind of techno-economic policy questions. But at the end of the day, I think there's a core part of the White House that just says, we don't need to be engaged with the world. They're Europeans. We don't wanna be Europeanized, we certainly don't wanna be Asianized.

And so they're like, yeah, not a bad life here. Just make sure the Mexicans and the Canadians mind their Ps and Qs. And that's going back to before Woodrow Wilson in my view, that's a very different vision of America.

Alex Capri: I would be hard pressed to see a sort of clear, coherent strategy. But at the same time. I would also say that there clearly is a need to return a certain strategic manufacturing capabilities to the United States, right? It's not helpful to basically point out all the reasons why this is impossible and not address that issue. But I do think that it is a big mistake not to be working more closely with our historic partners and allies around achieving those ends.

Rob Atkinson: Only if you don't mind China winning.

This is, to me, my biggest fear. Our biggest fear. Maybe you didn't push 'em into the China orbit, but you let 'em get attracted into the China orbit And I think you say this in the book too, Alex, we can't win this without allies working together.

Alex Capri: Absolutely. Absolutely, yeah.. Because again, I think, technology is used in many different ways. Including some very nefarious ways, right? To some very anti-democratic nefarious ways. And it can happen not only in a techno-authoritarian regime, but in a democratic regime as well, right?

I think that it's important to work together around the rule frameworks as well as developing the technology, right?

Rob Atkinson: Yeah, absolutely. I wish we could keep going. I encourage everybody to pick up a copy of the book. It's not only worth the read, but it's something good to have on your shelf because it's also really good reference material. So it's both of those.

Alex, I really wanna thank you for being here and it was great conversation. Thank you.

Alex Capri: Thank you so much, Rob and Jackie. I appreciate it.

Jackie Whisman: And that’s it for this week. If you liked it, please be sure to rate us and subscribe. Feel free to email show ideas or questions to podcast@itif.org. You can find the show notes and sign up for our weekly email newsletter on our website itif.org. And follow us on X, Facebook, and LinkedIn @ITIFdc.

Rob Atkinson: We have more episodes and great guests lined up and we hope you'll continue to tune in.

Jackie Whisman: Talk to you soon.