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High-tech competition with China should be focus, report urges

Eric Schmidt-led group calls for new defense strategy to counter Chinese military

Military airplanes fly over Beijing during a military parade at Tiananmen Square on Oct. 1, 2019, to mark the 70th anniversary of the founding of the People's Republic of China.
Military airplanes fly over Beijing during a military parade at Tiananmen Square on Oct. 1, 2019, to mark the 70th anniversary of the founding of the People's Republic of China. (Greg Baker/AFP via Getty Images)

The United States and its allies need to make winning the technological competition with China their primary strategic objective, and the next few years will prove critical, a panel of defense and technology experts said Monday in a new report.

The group, calling itself the Special Competitive Studies Project, lays out a broad set of challenges and recommendations covering competition with China in the economic and national security realms.

The project’s main point is that this generation of Americans is on trial and the years 2025 to 2030 will prove critical. At issue is winning a struggle for dominance in technologies such as artificial intelligence, quantum computing, networks, semiconductors, new forms of energy and biotechnology.

The experts also call for a new defense strategy, which they dub “Offset-X” and which they say “should form the framework for the next National Defense Authorization Act.”

“The epicenter of the competition is the quest for leadership and dominant market share in a constellation of emerging technologies that will underpin a thriving society, growing economy, and sharper instruments of power,” the project’s report said. “At stake is the future of free societies, open markets, democratic government, and a world order rooted in freedom not coercion.”

Bipartisan input

The project is chaired by former Google CEO Eric Schmidt and funded by the Eric and Wendy Schmidt Fund for Strategic Innovation, a private foundation.

The group is advised by a bipartisan group of national security experts:

  • Former Texas Republican Rep. Mac Thornberry, who served as chairman and ranking member of the House Armed Services Committee.
  • Two former top Pentagon officials: Bob Work, who served as deputy secretary, and Michele Flournoy, a former undersecretary for policy.
  • Nadia Schadlow, deputy national security adviser under President Donald Trump.

The commission’s CEO is Ylli Bajraktari, who was the executive director of the National Security Commission on Artificial Intelligence, a congressionally chartered group in 2020 and 2021, also chaired by Schmidt, that formed a springboard for the new initiative.

The current project drew its name from the 1950s Rockefeller Special Studies Project, which articulated the nature of Cold War challenges.

The contest between China and the West “is going to be the defining feature of global politics for the rest of our lives,” Work told defense reporters via Zoom on Monday. “It is a competition that we simply must win.”

Losing, he said, would mean Chinese dominance of defense and the global economy and Chinese ability to conduct global surveillance.

Schmidt, also on the call, said Washington’s enactment of the so-called U.S. Innovation and Competition Act which funded U.S. semiconductor manufacturing among other initiatives, is a good start — but only that.

“Everyone assumes we passed the USICA CHIPS Act and we’re done,” he said. “In practice, of course, it’s just the beginning.”


The new 189-page report covers a wide array of topics and technologies. The authors say they will report again in the future with more detailed recommendations.

In the defense arena, the experts lay out a number of trends at the strategic level. Great power competition, they said, is likely to persist below armed conflict and may “devolve into protracted contests that place a high premium on the strength of the industrial base, innovation ecosystem, and political will.”

On the operational level, the United States faces multiple challenges, they said.

To respond, the report calls for an “Offset-X Strategy” to make the U.S. military “better prepared and positioned to outsmart, outpace, outmaneuver, and — as necessary — outgun the People’s Liberation Army.”

The approach, which they want Congress to include in its next NDAA, includes a focus on distributed, network-based operations: more dispersed, smaller units with greater situational awareness and better sensors and battle management software.

Also on the agenda are human-machine teaming and designing ways to undermine China’s censorship and command and control.

This strategy would aim to “minimize the human and political cost the United States and its allies would suffer during a war with China, while driving up the political costs of war and creating serious dilemmas for Chinese leadership.”

The term “offset strategy” is a reference to three prior periods when the Pentagon aimed to make up for, or offset, a perceived American disadvantage in conventional arms vis-à-vis Cold War and post-Cold War adversaries. The first was in the 1950s, when America stressed nuclear weapons in its doctrine.

The second was in the 1970s and 1980s, when technological wizardry was eyed as the offset. And the third was from 2014 to 2018, when the Pentagon began to acknowledge the growth in China’s and Russia’s strength relative to America — particularly those countries’ mounting ability to deny U.S. forces access to particular regions, such as the Taiwan Strait, in a potential conflict.

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