Varieties of Digital Capitalism and the US–China Rivalry: The Rise of Competing Technological Spheres

The rise of China as a global high-tech nation is challenging US hegemony. While US tech companies like Alphabet, Amazon, and Microsoft have expanded globally and have integrated most world regions into US-led digital capitalism, China has developed its own variety of digital capitalism. Shielded by the ‘Great Firewall’, Chinese corporations such as Alibaba, Huawei, and Tencent have emerged as innovative high-tech companies. Instead of relying on a US-style liberal-internationalized mode of governance, China’s state-managed digital capitalism was domestic market-based. However, since the mid-2010s, Chinese tech companies have emerged as global competitors. In response, both Trump and Biden administrations enacted sanctions and investment controls to ban Chinese companies from the US market while pressuring their allies to follow suit. In this article, we argue that beyond the development of distinct US and Chinese varieties of digital capitalism, two separate digital technological spheres are emerging. After examining these distinct varieties of digital capitalism, it will be investigated how the US have weaponized institutional differences to sanction Chinese digital companies. In a third step, the emergence of a US and Chinese digital technological sphere will be analyzed, with a focus on 5G network equipment.