US cuts to science and technology could fast-track China’s tech dominance

Is the United States now trying to lose the technology race with China? It certainly seems to be.

The race is tight, and now the Trump administration is slashing funding for the three national institutions that have underpinned science and technology (S&T) and what advantage the US still has.

China is outpacing the US in the volume of high-impact research in 57 of the 64 critical technologies in ASPI’s Critical Technology Tracker. The US’s main remaining advantage is downstream in implementing technology, and even that’s at risk as China’s significant S&T investments pay off.

Now the US’s lead may disappear even faster following cuts to the National Institutes of Health (NIH), National Aeronautics and Space Agency (NASA) and National Science Foundation (NSF).

The NIH is the biggest public funder of biomedical research worldwide and impacts global health in ways often taken for granted. For example, it supported the foundational work that led to the Haemophilus influenzae type b vaccine which, by some estimates, prevented 1.2 million infant deaths between 2000 and 2015. NASA is a stalwart of space research and inadvertently has contributed to medical innovations as it has attended to the health of its astronauts, such as the ear thermometer. The NSF funds all non-medical scientific research (biology, quantum computing, artificial intelligence, space and advanced materials) in the US and manages major research facilities.

The NIH stands to lose $4 billion out of the $32 billion already allocated to US research grants in 2024. This $4 billion cut is not just 11.4 percent of the NIH’s research grants; it will also limit its ability to cover indirect costs associated with equipment, maintenance, safety and personnel—everything that keeps world-class research facilities ticking.

According to The New York Times, indirect costs make up 29 percent of grant funds on average. With only 85 out of 613 institutions having indirect costs below 15 percent, a decision to cap indirect costs at 15 percent will at least halve the funds for maintaining labs for most NIH grant recipients.

If you are a grand-slam-winning tennis champion, these indirect costs are akin to the payments for your team of coaches, strategists, medical entourage, all your equipment and access to training facilities. Without these, you won’t stay at number one. It’s the same in the critical technology race.

Typically, labs and other research facilities have state-of-the-art equipment, which have indirect costs commensurate with their level of sophistication. This means that high-level labs—where breakthroughs often happen—have more to lose when funding is cut for indirect costs.

The biggest losers in these cuts will be top US universities, medical schools and hospitals, many of which are among the top 10 institutions in the Tech Tracker for biotechnologies, including MD Anderson Cancer Center, Memorial Sloan Kettering and many teaching hospitals within the Harvard Medical School. The NIH not only provides research funding in the biomedical fields; it also has 27 biomedical research institutions. The NIH combined is currently ranked second for vaccines and medical countermeasures and eighth for genetic engineering in the Critical Technology Tracker, highlighting its global importance and competitiveness.

NIH-funded research has contributed to early detection and prevention of cancers, chemotherapy and immunotherapy. The NIH also helped develop vaccines for flu and RSV (Respiratory Syncytial Virus), as well as the mRNA Covid-19 vaccine. These are the very institutions that the US government will rely on to develop the future vaccines needed to protect Americans from the next global pandemic.

In addition, in early February, biomedical research was again in the firing line with termination letters sent to hundreds of employees at the Centers for Disease Control and Prevention, the Food and Drug Administration, and the NIH. More job cuts are expected to follow, further weakening the sector.

Around the same time, the NSF froze all grant review processes to comply with new directives to end all diversity, equity, and inclusion (DEI) programs. According to the Washington Post, NSF staff were tasked with scrutinising active research grants—preciously approved by peer review—with a list of keywords including ‘women’, ‘diverse’ and ‘institutional’ to reverse any grants remotely related to DEI initiatives.

On 18 February, the haemorrhage of US S&T talent continued with a 10 percent cut to the NSF workforce. Given the NSF’s annual budget of $9 billion, the effect of this cut will be felt across all technologies. The Computer Research Association, for example, predicts devastating consequences for scientific innovation and talent in AI technologies and high performance computing, as the NSF funds 80 percent of fundamental computing research at US institutions. The association credits foundational US technologies behind AI, cybersecurity and quantum technologies to NSF funding.

The Critical Technology Tracker ranks the US first in quantum computing, with seven of the top 10 institutions based in the US. However, quantum technologies are priority areas for China, which unveiled its most advanced quantum computer, a 504-Qubit Superconductor, in December 2024. In 2022, the NSF’s Directorate for Technology, Innovation and Partnerships was set up to accelerate the implementation of NSF-funded discoveries from research to new industries, especially in technologies where the US faced the greatest competition. According to Reuters, the directorate lost 20 percent of its staff last week.

Similarly, NASA, currently ranked first in space launch systems research in the Tech Tracker, may face a 10 percent cut to its specialised workforce. These massive cuts have been put on hold, but if they resume, the loss of talent would be a blow to an important component of the technological race, especially with a worldwide shortage of tech specialists. Historically, US space and satellite companies have benefited from NASA’s decades-long public investments in research and development.

The Economist reported that the scrutiny of DEI programs extended to keywords related to climate change. The National Oceanic and Atmospheric Administration (NOAA) and NASA are therefore expecting major job cuts for their work in climate science and extreme weather patterns. The NOAA plays an important role in weather prediction. Its research on space and sensors is visible in the Tech Tracker across the areas of small satellites, gravitational sensors, and sonar and acoustic sensors.

While the US is cutting its funding, China continues its systematic, long-term investment in critical technologies. Synthetic biology is a sector in which China has the largest lead in the Tech Tracker. Over the past 5 years, China has published 57.7 percent of high-impact research in the field, while the US has produced just 13.1 percent.

Synthetic biology is the design and building of new biological systems. It has applications in many areas, such as agriculture and medicine, which directly affect food security and health. Like quantum computing, synthetic biology is an emerging technology where scientific innovation and intellectual property ownership can determine future industry dominance. Since 2006, China has prioritised synthetic biology and built a tech ecosystem around this emerging technology, comprising research institutes and industry.

As Drew Endy, a synthetic biologist from Stanford University, pointed out, the research infrastructure that China has built to support its all-of-nation approach to emerging biotechnology is now the envy of the world. The contrast between China’s investment strategy and the cuts imposed on the NIH could not be starker.

If the US doesn’t want to lose the S&T race with China, it must review its funding cuts. Reducing the funding envelope to grants organisations that oversee scientific grants, such as the NIH and NSF, will stifle the scientific innovations and breakthroughs that have been central to the rise of the US as a technology superpower.

Countries that have long relied on US technological research may need to step up spending on scientific research, or they, too, will risk being left behind.