Instead of blocking China’s tech development, US and EU can learn from its AI governance

The EU-US Trade and Technology Council looks set to focus on restricting China’s access to sensitive tech at its coming meeting
While Europe’s ambition to be a leader in digital policy is well known, China’s swift implementation of AI regulation holds lessons for both the US and EU

Imran Khalid

Published: 4:30pm, 22 May 2023

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The European Union and the US are reportedly looking to join forces to further block sensitive tech transfer to their strategic rivals, while also crafting a road map for the regulation of artificial intelligence.

The plans, revealed in a leaked draft statement of the EU-US Trade and Technology Council meeting to take place later this month, appear to be targeted at China. The meeting will bring together senior officials, including US Secretary of State Antony Blinken and European Commission Executive Vice-President Margrethe Vestager, in Lulea, Sweden, on May 30-31.

At the meeting, the partners will look to limit US and EU companies’ overseas investment to prevent sensitive technology – AI, quantum computing and biotechnology – from benefiting strategic rivals.

The draft statement says the US and EU will commit to addressing non-market practices, including coordinating export controls on semiconductors and other “sensitive items”, and will hold regular discussions on preventing their companies’ knowledge from supporting the technological advancements of strategic rivals.

Although the draft statement mentions China only twice, the aim, it seems, is to curtail Beijing’s access to technologies that can be used in both the civilian and military domains.

While Washington is serious about imposing restrictions on US tech investment in China, Brussels may find itself navigating a more delicate path. The EU wants to foster warmer trade relations with China but also harbours security concerns over transfers of European cutting-edge technology to China and data privacy.

For instance, AI can enhance not only weaponry but also population surveillance and control. For EU policymakers, balancing economic cooperation with China against addressing these multifaceted risks, while under intense pressure from the US, is a major challenge.

The transatlantic partners have also embarked on a complex journey to counter outside manipulation of their data. In trying to design a joint road map to manage AI risks and set up regulatory frameworks, the US and the EU are likely to focus on countering the threat posed by Chinese practices that are deemed manipulative or intrusive.

The Trade and Technology Council was launched on June 15, 2021, by European Commission President Ursula von der Leyen and US President Joe Biden. At its core, it represents an effort to align the allies’ approaches to key issues, such as trade dynamics, economic strategies and emerging technologies.

When US and EU leaders met last December for the council’s third meeting, they were more concerned with disputes over industrial subsidies. Tensions continue to loom large as the Europeans remain unhappy over the US subsidising its electric car industry, a move that potentially disadvantages European carmakers.

European Commissioner for Trade Valdis Dombrovskis, European Commission Executive Vice-President Margrethe Vestager, and US Secretary of State Antony Blinken meet the press at the US-EU Trade and Technology Council meeting in Maryland, US, on December 5, 2022. Photo: Bloomberg

This time, the discussions will be more complicated. Washington aims to leverage the council to persuade Brussels to align more closely with its anti-China stance while the EU is more interested in garnering US support for its digital policy agenda, especially with regard to Silicon Valley tech giants.

These differing priorities are giving rise to a tug of war, with each side seeking to assert its agenda while grappling with the intricacies of the partnership. The US interpretation of the talks’ agenda appears to be gaining traction, as Washington’s efforts to rally Brussels in its battle against China resonate more strongly.

The EU’s focus on securing US buy-in for its digital policy agenda also underscores its intention to reshape the global digital landscape, leveraging its regulations and frameworks.

The European Commission took a major step forward in April 2021 by proposing the first-ever legal framework for AI, which aims to establish guidelines for the responsible and ethical use of the technology. But several Asian countries are swiftly following suit, also seeking to lead in AI development and in fostering an environment conducive to the use of the technology.

China is emerging as a prominent player. Contrary to the prevailing public perception that the EU holds the mantle of technological guardianship on the global stage while Asia is the “wild, wild West” where individual data rights and privacy are disregarded, China has been making significant strides in AI regulation.

What sets Beijing apart is its proactive approach. While many other nations are still stuck at the proposal stage, China has published governance guidance and ethical norms for AI regulation.

Last year, the country passed AI regulation targeting online recommendation systems, mandating that AI services be morally and ethically accountable, as well as transparent. It requires companies to inform users when algorithms are used to curate information and to offer the option to opt out of targeted content. It also prohibits the use of personal data for differential pricing.

China’s swift implementation of AI regulation is remarkable, especially when compared to the typically lengthy processes observed in the US and in EU countries. As Beijing continues to refine its data and tech regulatory framework, it is likely to serve as a model for AI regulation worldwide, influencing and shaping the global governance of the field.

While China has established comprehensive data regulation policies, the US, in contrast, has yet to develop a national approach to data regulation and AI management.

Instead of learning from the robust Chinese regulatory framework for AI governance and working on addressing the issues in the US and the EU’s own systems, it is disappointing that the fourth Trade and Technology Council meeting plans to focus on countering China.

Dr Imran Khalid is a freelance contributor based in Karachi, Pakistan