In its most recent report to Congress, the United States-China Economic and Security Review Commission (USCC) recommends an effort similar to the Manhattan Project and restrictions on humanoid robots. These recommendations might result in a significant shift in policy regarding the burgeoning competition between the United States and China in artificial general intelligence (AGI).

                  The Commission’s annual report, published in November 2024, included 32 proposals that could radically transform the way the two countries engage with one another. Artificial intelligence was the focal point of the new chapter in the strategic competition between the two countries.

The United States and China: the moonshot of artificial general intelligence and vital technological controls

                         A bold proposition at the core of the paper is the establishment of a government-backed initiative to construct artificial general intelligence (AGI) systems that might match and possibly even surpass humans’ cognitive capabilities.

                     On the other hand, the advice is merely a single piece of a much larger technological puzzle that also includes export controls, investment screening, and new trade rules to ensure the United States maintains its technological advantages.

                    Under the proposed Artificial General Intelligence program, prominent artificial intelligence businesses, cloud providers, and data center operators would be offered multi-year contracts. It would be supported by the “DX Rating,” which is the highest priority of the Defense Department. This rating is usually reserved for initiatives that are considered to be of essential importance to national security.

                  This level of government participation in the development of artificial intelligence mirrors the urgency observed in earlier technological races. As a result, essential questions regarding the role of state intervention in an industry predominantly driven by innovation in the private sector are raised.

                 The Commission’s suggestions centered on technology go beyond artificial intelligence. Several noteworthy recommendations include imposing import restrictions on autonomous humanoid robots manufactured in China that possess significant dexterity, movement, and intellect skills.

                 The research reflects an increasing number of concerns regarding the use of connected technologies in critical infrastructure. It also addresses energy infrastructure goods that can be monitored remotely. This report recommends stronger oversight of technology transfers and investment flows, which adds to the export limits already in place in the semiconductor industry.

               Despite international constraints, China is continuing to develop its domestic chip-making skills. The Commission proposes the establishment of an Outbound Investment Office to prevent the flow of funds and knowledge from the United States to China and advance China’s technological capabilities in sensitive areas.

Making changes to the flow of investment and trade relations

               The research suggests that China’s Permanent Normal Trade Relations (PNTR) status be eliminated, potentially changing the technological supply chain and trade flows that have defined the global technology industry for decades. This is the most significant recommendation made by the report. Even though this advice acknowledges how closely linked the tech ecosystems of the United States and China have become, it also suggests that this dependency may now represent more hazards than benefits.

              Another central idea is the importance of data openness, including suggestions for increasing the reporting requirements for investments and technology transfers. To address a severe blind spot in the existing supervision procedures, the Commission has called for improved tracking of investments moving through offshore firms.

               The report’s publication occurs at a crucial point in the progression of technical advancement. The effort known as “new quality productive forces” and China’s quest for self-sufficiency in essential technologies are two examples that illustrate Beijing’s intention to take the lead in the development of next-generation technologies. While this is happening, advancements in artificial intelligence and quantum computing have raised the stakes in the fight between technological companies.

             Nevertheless, the proposals of the Commission are confronted with difficulties in practice. Artificial general intelligence (AGI) development continues to be a problematic scientific task that may not provide results quickly, regardless of the amount of funding available. Moreover, the imposition of limits on the transfer of technology and investment may result in unforeseen effects for global innovation networks, which have traditionally been advantageous to both countries.

             If these proposals are implemented, the technology sector might be required to navigate an increasingly complex regulatory framework. Businesses would be subject to new compliance standards regarding international investments, technology transfers, and collaborative research collaborations.

Concerns and potential repercussions across the world

                 The effectiveness of the proposed actions will likely be contingent upon the necessity of coordination with friends and partners with comparable technological capabilities and concerns. The report accepts this fact by advocating international measures for export controls and investment screening and acknowledges its importance.

                As the technical battle between the United States and China enters a new phase, government policy may play a more direct role in driving growth. It remains to be seen if this method helps to speed up invention or slows it down; however, the technology industry ought to prepare for more inspection and regulation of international technological collaboration.