Future-Proofing U.S. Technology: Strategic Priorities Amid Chinese Tech Advancement

Portfolio Overview

The Tech Sovereignty & Security portfolio at New Lines Institute addresses one of the most critical strategic
challenges facing the United States today: maintaining technological leadership in an era of intensifying global competition. As technological innovation accelerates and geopolitical tensions rise, the U.S. faces unprecedented challenges to its technological sovereignty and security posture. Our work bridges the gap between cutting-edge technical expertise and practical policymaking, providing decision-makers with in-depth research and actionable recommendations that respond to both immediate threats and long-term strategic imperatives.

America’s technological advantage, which has been a cornerstone of its economic prosperity and national security for decades, now faces systematic challenges from strategic competitors, particularly China. These challenges extend beyond simple technological rivalry to encompass fundamental questions about supply chain resilience, talent development, research security, and the governance frameworks that will shape tomorrow’s technological landscape.

The decisions made today will determine whether the United States maintains its position as the world’s leading technological innovator and whether these innovations will enhance or undermine American security and values

Key Focus Areas

Materiel for Minerals

The Department of Defence’s 2023 National Defense Industrial Strategy (NDIS) prioritizes resilient supply chains, including those for critical minerals. Mineral consumption directed by the DoD will likely increase as efforts to build more naval vessels, munitions, and uncrewed aerial vehicles continue. However, limited U.S. mining and refining production capacity has led to heavy reliance on imports, particularly from China, to meet demand. The 2024 NDIS Implementation Plan recommends stockpiling and investment in mineral projects. This report proposes a new approach for securing critical mineral supply chains: materiel-for-minerals, or M4M deals.

The DoD should seek off-take agreements for uncontracted mineral production in non-allied countries. It should seek right-of-first-refusal (ROFR) offtake agreements, giving it the right to buy a certain volume of minerals at market prices. The DoD could exercise its right to offtake following supply cutoffs, such as when China imposes mineral export bans, and then sell the minerals at the same prices to U.S. defense firms responsible for high-priority defense programs facing mineral shortages, and hence, delays. 

To secure these ROFR offtake agreements, the DoD should condition U.S. security assistance, military cooperation, and foreign military sales (FMS) to mineral-rich countries on securing ROFR offtake agreements.

The DoD faces significant challenges in securing its mineral supply chains, which are crucial in both defense platforms and munitions…By carefully implementing and continuously refining the M4M deal structure over time, the DoD has the potential to strengthen its global partnerships and secure its mineral supplies in an increasingly competitive world.

Innovation Versus Regulation in the Critical Technology Sector

The People’s Republic of China’s illicit transfer and weaponization of foreign critical technologies pose a dire threat to U.S. national security and global leadership. While the dominant policy discourse promotes a whole-of-government approach to mitigating these risks, less attention has been given to the potential negative effects of the shift to stronger industrial policies on the American research and development ecosystem. Even when written for strategic competitiveness, overly broad regulations stifle innovation by imposing barriers to entry for new competitors, with disproportionate negative impacts falling on parties with less access to capital and who abide strictly by the law. 

While both China and the U.S. use emerging technologies to enhance their domestic security and expand foreign influence, China has been able to gain an asymmetric advantage by exploiting U.S markets and innovations through espionage, cyber intrusions, and protectionist policies. Rather than holding China accountable, the U.S. and Europe have adopted broad tariffs and industrial policies, fueling global isolationism and protectionism, which stifles innovation globally. 

A successful strategy for critical technology development should maximize state return on investment, align ensuing benefits with the public interest, mitigate risk of exploitation by foreign adversaries, and further U.S foreign policy goals. To “win” the global technology race, the U.S needs to gain dominance over a range of strategic investments and then utilize those investments at home and abroad for the public good. By applying large resources to this effort, the U.S can shape the technology sector and incentivize China to follow its leadership. 

Ultimately, the U.S. must resist the allure of emulating centralized industrial models and instead reassert its commitment to international collaboration, limited industrial policy, and the entrepreneurial spirit that has historically fueled its global leadership. 

Overcoming the Challenges of Incentivizing Cybersecurity

Cybersecurity is evolving rapidly while government operations are intentionally deliberate and thoughtful. Against ever-adapting threat actors in China, Russia, and state-sponsored groups, regulations and the cybersecurity industry remain out of sync. Cybersecurity needs a shake-up to break free from the pattern it has followed over the past several years. In particular, the industry is stuck in a cycle in which a few large cybersecurity vendors control the lion’s share of the market while successful cyberattacks compound year after year. Each breach leads to promises of fixes, only for the pattern to repeat. 

Since expecting legislators to keep pace with technological advancements and adapt regulations in real time is unrealistic, a more effective method is to focus on basic security principles. Regulators should adopt a “build up from the floor” approach, which starts with a minimal foundation of general rules, then monitors their impact before crafting further solutions. This paper explores this approach in depth, hoping to stimulate progress while minimizing the effects of poorly designed regulations. Regulations following this approach that respond to the multiple needs of the cybersecurity industry and broader tech industry will foster an economic climate in which innovation is not stifled. 

We can start by taking a simple goal, such as incentivizing businesses to secure sensitive data, then build up by offering multiple paths to success while rewarding preferred security outcomes. Regulations should broadly apply across endpoints, networks, cloud services, IoT devices, and mobile technology to remain adaptable. There are multiple ways in which this example could be applied, but it demonstrates the “build up from the floor” approach to incentivizing cybersecurity. Policymakers and regulators should start with a specific security goal, incentivize desired outcomes, and ensure the goal is widely applicable. This paper also expands on this approach further with policy recommendations to ensure both the public and private sectors are able to effectively tackle evolving challenges from U.S. competitors and adversaries. 

Cybercriminals and APTs present a common threat to every legitimate organization’s interests. The more quickly public and private sector organizations overcome obstacles hindering collaboration, the better. 

Implications of Alternative Payment Methods in a China-Taiwan Confrontation

The People’s Republic of China uses alternative payment methods (APMs) to advance its foreign policy, diversify its currency holdings, and work as a counter to U.S. dollar dominance. Following Russia’s invasion of Ukraine in 2022, APMs have increasingly been utilized to build a long-term strategy to respond to future economic statecraft policies from the U.S. and its allies. Policymakers should therefore view China’s use of APMs as an early warning signal of possible conflicts in the South China Sea and Taiwan. 

In recent years, China’s APMs strategy has become more targeted. Rather than using de-dollarization to promote its own currency or simply weaken the dollar, its focus has been to blunt the effectiveness of economic sanctions, such as with the development of an alternative to SWIFT and central bank gold purchases. It has also been cautiously proactive, evidenced in its backseat role in the institutionalization of APMs in the BRICS geopolitical grouping and its complicated relationship with cryptocurrencies domestically. The contrast with Russia’s approach – whose APMs strategy has been rapidly reactive to Western economic sanctions – should be seen in the context of preparing for similar sanctions in the event of an invasion of Taiwan. 

This policy report explores the APM landscape following the onset of the Russia-Ukraine war, and China’s proactively cautious approach to APMs. Efforts to raise the profile of the renminbi and diversify foreign currency holdings can pinpoint common signals that could increase the probability of regional escalation, including an invasion of Taiwan. 

U.S. policymakers should consider the implications of this for (a) maintaining the dollar’s position as the world’s reserve currency, a key part of President Donald Trump’s election policy platform, and (b) the effectiveness of sanctions as a foreign policy lever in the event of an invasion of Taiwan. A priority among several recommended actions for this administration is the creation of an APMs Strategic Coordination Unit to monitor early warning signals. The unit’s remit would be to ensure information-gathering and rigorous scrutiny of these signals and to serve as a convening body for departments, working groups, and agencies across government. This will ensure the U.S. is unified, coordinated, and prepared to respond to APM developments that would indicate an increased probability of invasion. 

There are several signs that China is beginning to shift its approach to APM strategy, U.S. policymakers must assess the implications for two critical areas: (a) maintaining the USD’s status as the global reserve currency, and (b) maintaining the effectiveness of sanctions as a foreign policy tool, particularly in the context of an invasion of Taiwan. 

The Double-Edged Sword: How to Win the War on Fake News

Misinformation and disinformation are among the United States’ most pressing concerns. Technologically sophisticated foreign actors, such as Russia and the People’s Republic of China, use influence campaigns as a disruptive tool to amplify discontent, shape election results, and blur the lines between fact and fiction. While emerging technologies like artificial intelligence and advanced social media algorithms offer significant benefits to society, they are also frequently exploited for disinformation, making careful oversight and policy reform essential to safeguarding U.S national security. Social media accounts and bot networks rapidly disseminate fake news to influence American perceptions of domestic and foreign policy events. Additionally, deepfakes and generative AI can produce highly realistic images and videos that many Americans struggle to recognize as fake. These efforts combine to assist the foreign policy goals of malign actors and pose destabilizing risks to American society. 

This paper examines the dual role of technology in both spreading and countering fake news. It also discusses China’s use of these technologies to influence events in the United States, such as the COVID-19 pandemic and federal, state, and local elections. While China’s objectives in spreading fake news may not always be clear, countering its efforts to manipulate U.S social media platforms to influence American perceptions of domestic and foreign affairs remains essential. Additionally, the paper discusses the challenges U.S. companies face in addressing this issue while navigating partisan divides over censorship and inflammatory messaging. 

The popularity and influence of platforms like TikTok, with over 170 million American users, show the difficulty the government has in striking a balance between highlighting foreign influence to the public, bolstering national security, and protecting freedom of speech. Existing laws, such as the Foreign Agents Registration Act, can be utilized to hold foreign state-owned companies, media, and individuals responsible for acting as agents of foreign nations to advance their geopolitical goals. 

The spread of fake news is a cross-cutting issue that adds fuel to the fire by augmenting three areas prioritized by lawmakers in their interaction with Beijing: competition in the South China Sea, hacking of U.S. infrastructure, and economic competition. 

Culture as a Tool for Trustworthy AI

Inclusive AI governance is critical to ensuring that overlooked voices across countries in the Global South possess the ability to participate in, discuss, and make decisions surrounding AI access and development. Yet, the underlying politics and the power competition of AI access and development must not be ignored, either. China maintains a proactive track record for engagement with the Global South in terms of development and outreach, often emphasizing the concept of protecting sovereignty. Currently, China offers not only the crucial digital infrastructure needed for AI technologies but is now also providing a sophisticated variety of tools, especially as seen with the release of DeepSeek R-1 and V-3. As a result, it is possible for a new wave of AI applications to be built using this open-source Chinese LLM, and the consequences for such a potential diffusion of tools based on techno-authoritarian-leaning values are still not completely understood. 

This policy report examines solutions that emphasize collaborative arrangements and inter-organizational initiatives to create a diverse input of ideas that are tailored to the local level in order to empower and connect communities across the globe. It also illuminates how trustworthy AI is affected by politics and power competition and recommends ways to coordinate and institutionalize trustworthy AI given these dynamics. There is an opportunity for policymakers to work together to promote the trust-building approaches needed to adopt AI systems that are not based on authoritarian values. 

The U.S. must not take an isolated approach to AI governance, given the global landscape. It must collaborate with its like-minded allies in order to reorganize, reconsider, and redevelop an AI vision that supports the nuances of values across local contexts in order to provide opportunities for an open foundation upon which to enable human flourishing through innovation. Additionally, it must realize that its AI leadership role must be delicate in its considerations, but often aggressive in its actions. 

The path to trustworthy AI must combine normative, regulatory, and cultural approaches for AI adoption, with a particular emphasis on the role cultural-cognitive elements play in enhancing democratic values. By leading the way in structuring and supporting collaborative activity on AI governance worldwide, the U.S. can build support for cultures that enable human flourishing and human agency. 

How the U.S. Can Achieve Sustainable AI Leadership

Much of today’s discussions on emerging technologies often equate national power with production and innovation, prioritizing the former. While these technologies have tremendous potential to benefit society, discourse is also centered on how competitors like the People’s Republic of China are progressing in these sectors and may threaten to surpass the United States. However, there is a flaw in the way we determine which country is ahead, leaving us to rely on flawed interpretations of power and competition. The United States needs a clear path to understanding and reinforcing its leadership in key technological sectors such as artificial intelligence.

The notion of deregulation for innovation is alluring, but such federal regulatory ambiguity and uncertainty, and the need to comply with varying state-level regulations, ultimately lead to increased, and potentially burdensome, investment in resources for compliance efforts. Additionally, along with direct AI regulation, the country needs policies that encourage and foster an effective and resilient infrastructure and workforce; without them, the United States simply cannot maintain its global standing and further advance to keep pace with global competition.

This report explores aspects of AI development that the United States should prioritize to lead in the sector over the long term. This includes aligning innovation with democratic values such as autonomy, privacy, transparency, and fairness, as well as creating and deploying innovative AI products and services while making substantial investments in sustainable resources and infrastructures and maintaining a commitment to ethically sound policy for governance. 

In response to current U.S. priorities, this report addresses the push for reshoring manufacturing, building state and local infrastructure to support data centers, and the question of how to sustainably and reliably provide adequate power to support such facilities. Building internal capacity should be encouraged, but an entirely isolationist approach is unrealistic, given that the U.S.’s technological future is inextricably intertwined with the PRC. The report provides balanced approaches that recognize this reality, while still allowing the U.S. to build needed domestic capacity.

Quality – the thoughtful design, ethical implementation, and long-term sustainability of AI – is what will truly distinguish U.S. leadership in this domain. If we allow AI to be driven solely by volume and unchecked growth, we risk losing sight of what made our technological advancements beneficial to humanity in the first place. 

American AI Leadership Should Not Be Defined by Machine Learning

The United States’ leadership in developing artificial intelligence should not be defined just by machine learning. This paradigm, in which artificial neural networks learn via data, is a critical step in making progress with this technology. Yet machine learning is a fundamentally limited paradigm whose shortcomings cannot be overcome by doubling down on its existing techniques. U.S. policymakers should instead reconceive American AI leadership as investing in and pushing the boundaries of the next dominant paradigm in AI, whose ideal candidate is neuro-symbolic AI. Neuro-symbolic AI synthesizes techniques from both traditional and contemporary approaches to AI research. Thus, it demonstrates the most promising path to ameliorating shortcomings in state-of-the-art models without sacrificing what came before.

Policymaking efforts to retain and expand the United States’ AI leadership should not concede the future of this technology merely to control its present — because its present is fundamentally limited. Machine learning is not the paradigm that will, once fully realized, secure for the U.S. an enduring leadership position in AI. 

Rather than repeat the mistakes of the past, the U.S. government’s role should instead be relatively targeted and complementary, and thus it should prioritize shortcomings in state-of-the-art machine-learning systems ripe for improvement in the next paradigm. Rather than pursue artificial general intelligence, the federal government should invest in frontier neuro-symbolic AI research by laying its foundations through existing offices and programs like the National Artificial Intelligence Initiative Office (NAIIO) and the National Science Foundation’s National AI Research Institutes. 

America has the resources and the will to lead in AI. It should not squander its opportunity by mistaking machine learning for this technology’s endgame. 

About the Team

Editors

Kelsey Quinn

Kelsey Quinn is the Program Head of Tech Sovereignty & Security at the New Lines Institute. She spearheads critical research into pragmatic mitigation of technological threats while preserving innovation needed for scientific advancement and competitiveness.

Prior to New Lines, Quinn contributed to the National Consortium for the Study of Terrorism and Responses to Terrorism (START). There she analyzed decision frameworks and attack scenarios of CBRN weapons on the DARPA Sigma+ project. At Michigan State University, her interdisciplinary research investigated bacterial pathogenesis and physiology in Vibrio cholerae, a Category B bioterrorism agent, combining her background in microbiology and security applications.

Quinn holds a Bachelor of Science in Microbiology with a minor in Global Terrorism from the University of Maryland and earned a master’s in Security and Terrorism Studies from the same institution in 2024.

Eric Omorogieva

Eric Omorogieva is the Technology Policy Intern at the New Lines Institute, where he works on the Tech Sovereignty & Security portfolio. He is a graduate student at Johns Hopkins University’s School of Advanced International Studies, pursuing a master’s degree in international relations with concentrations in China studies and security, strategy, and statecraft. He holds a graduate certificate in Chinese and American studies at the Hopkins-Nanjing Center in Nanjing, China. He holds a 2021 bachelor’s degree in politics and international affairs with minors in Chinese and African studies from Wake Forest University.

Omorogieva worked previously at the International Rescue Committee, serving refugees in Washington, D.C