China's Potential to Overtake the United States: The Role of Technical Diffusion and Catch-up Speed

The U.S. imposed sanctions on China focusing on cutting-edge technology. This study examines whether the US sanctions policy against China is effective. If it is effective, we would like to analyze why it is effective through the technical diffusion index and catch-up index. As the U.S. imposed sanctions on Chinese semiconductors and other cutting-edge technologies, the speed of catch-up and diffusion of China's cutting-edge technologies slowed down. From 1980 to 2022, macro data was collected from the IMF (2023) and ILO (2023). Approximately 300,000 patents related to semiconductors, AI, and Big data were used. The impact of advanced technical diffusion on GDP and per capita income was analyzed statistically rigorously using the general sequential logit model (VGAM, VGLM), difference-in-differences (DID) model, hierarchical mixed model, and Long-Short. -Term Memory (LSTM) model. We used LSTM to assess whether China could overtake the United States by 2030. In conclusion, U.S.'s sanction on China were partially effective. It appears that China is rapidly approaching the U.S. through the development of AI and Big data technologies. However, it is doubtful whether China will be able to catch up with the U.S. by 2030. If the U.S. cannot effectively control AI, the possibility of being overtaken by China may increase.

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