Last Friday, President Donald Trump and Chinese President Xi Jinping engaged in a high-stakes phone call to finalize the future of TikTok, a platform that has become a lightning rod for geopolitical tensions.
The proposed sale of TikTok to a US consortium, including Oracle and other Silicon Valley heavyweights, is being touted as a victory for American control over the platform’s algorithms and user data.
However, this deal brings into focus a much broader and more concerning reality: the US-China relationship is not just about trade or politics anymore, but about an evolving tech war that, in many ways, constitutes a soft power incursion by China.
China’s playbook for waging a soft power war has been clear for decades, while the United States remains entangled in outdated policies that prioritize the interests of trillion-dollar companies and university tuition dollars over the integrity of national security.
China’s three-step strategy began gaining traction in the 1990s, when Beijing leveraged its vast, government-controlled market to compel foreign companies into joint ventures, transferring critical know-how as foreign experts trained Chinese counterparts.
By 2015, over 6,000 new joint ventures had funneled $27.8 billion in foreign investment, rapidly advancing China’s technological capabilities.
The next step saw China using its own resources and talent to replicate foreign technologies. By studying imported innovations and learning directly from Western experts, Chinese firms reverse-engineered and adapted these technologies to local needs, rapidly scaling production and building domestic capabilities without relying on foreign expertise.
The final step has been to achieve technological parity or even surpass Western competitors while retaining full control over its large domestic market and no longer ceding access or influence to foreign companies.
To accomplish this, Beijing has pursued technological self-sufficiency and indigenous innovation, investing heavily in R&D and leveraging homegrown talent and resources. This strategy has allowed China to innovate or replicate more efficiently and cost-effectively.
Initiatives like Made in China 2025 and Xi Jinping’s push for “technological self-reliance” have made China into the world’s second-largest spender on R&D. As a result, Chinese firms are now competing globally in 5G, artificial intelligence, electric vehicles, robotics and space exploration.
China’s rapid technological gains have frustrated US companies. Jensen Huang, CEO of the multi-trillion dollar chip-making company Nvidia, lamented China’s decision to move beyond his less advanced chips, attributing the situation to the US administration’s turbulent relationship with Beijing and portraying himself as a pawn in the broader tech war.
As he noted, “Nvidia would be supportive of the Chinese government and the US government as they all sort through these geopolitical policies.”
Today, the country is manufacturing AI chips that are increasingly comparable to the scaled-down versions Nvidia is permitted to sell under U.S. export restrictions. This signals that Beijing may be reducing its reliance on foreign hardware to power its AI, manufacturing and industrial systems.
The H800 chips, designed specifically for the Chinese market after the US blocked exports of Nvidia’s H100 and A100, now perform at levels similar to some domestic alternatives. However, this balance could shift again if the US authorizes the export of more advanced chips, such as future Blackwell-based models.
DeepSeek illustrates the success of China’s broader tech playbook. The company leveraged US AI expertise through corporate partnerships, academic collaborations and Chinese nationals trained in the United States.
According to OpenAI experts, DeepSeek employed a technique known as “distillation“—a process where one AI model learns from another by mimicking its behavior and outputs. This allowed the company to absorb the insights, techniques and architectures of advanced models like ChatGPT without needing to replicate every detail.
By applying this method, DeepSeek was able to reproduce and even optimize foreign technology at a lower cost, helping China approach near parity in AI capabilities.
This achievement illustrates how deeply China’s soft power intrusion is embedded in its broader technological strategy, a playbook designed to acquire, absorb and advance critical technologies. US universities have played a central role in enabling China’s technological ascent.
In late August, President Trump announced that up to 600,000 Chinese students would be allowed to study in the United States, highlighting how US universities prioritize tuition revenue – approximately $50.2 billion annually – over national security.
Beijing continues to leverage this access to acquire technological know-how, in part through the China Scholarship Council (CSC), which funds thousands of Chinese students in STEM fields on the condition that they return home to advance China’s scientific and technological ambitions.
Beyond students, Chinese nationals working at major US tech firms are often lured back to China through the Thousand Talents Plan. This program offers lucrative salaries, research funding, housing benefits and prestigious positions to overseas-trained students and researchers, incentivizing them to bring back advanced skills, technological expertise and sensitive intellectual property. Intelligence officials see these initiatives as an encouragement of espionage.
China’s strategy extends through collaboration with elite American universities. For example, MIT and Tsinghua University have jointly developed advanced robotics algorithms and machine learning models.
While presented as academic cooperation, such partnerships have effectively provided China with the knowledge and experience needed to replicate, adapt and scale advanced technologies, accelerating its rise as a global tech power.
Dr Fei-Ling Wang, author of “The China Race: Competition for Alternative World Orders”, recently told this author that China’s strategy of technology acquisition, replication and advancement could position it as the global leader of the 21st century—unless the US acts decisively.
The US now stands at a critical crossroads: it must choose between continuing to prioritize short-term economic gains and partnerships or confronting the long-term threat that China’s rise poses to American technological leadership and national security.
Acting decisively requires a multi-pronged strategy—tightening export controls on advanced technologies, increasing oversight of academic and research collaborations, and significantly boosting investment in domestic R&D and STEM education.
The forced sale of TikTok is just one chapter in this unfolding story, but the stakes for US innovation, security and global influence have never been higher.
Derek Levine’s commentaries on technology, education and US-China relations have appeared in The Hill, National Review, The Diplomat, RealClear Media and Asia Times. His forthcoming book, “China’s Path to Dominance: Preparing for Confrontation with the United States”, is due out later this month.
