The Geoeconomics of Quantum Technology in the Indo-Pacific

The Geoeconomics of Quantum Technology in the Indo-Pacific
By Matthew Kacki on 19 October 2021

Indo-Pacific | Economic Integration

Quantum technology offers unprecedented technological potential to enhance our economic prosperity and national security. However, uneven progress in research and development of quantum technology threatens to undermine both. If this current trend persists, only China and the United States will control the technology. They would gain significant geoeconomic leverage and a competitive edge in their military technology.

New forms of quantum technology are being developed to manipulate behaviour of matter with unprecedented precision

Quantum technologies like semiconductors and lasers have existed for decades, however, these earlier technologies could not manipulate properties at the quantum level. Emerging quantum technology of today can.

The ability to precisely control matter at the quantum level – like controlling the orientation of an individual atom, has enabled a superior way to process, transmit and analyse information. This is why quantum technology offers unprecedented technological potential.

There are three main areas in which these new forms of quantum technology are being developed:
  1. Computing
  2. Communications
  3. Sensors

Quantum computers can solve complex problems ‘classical’ computers struggle with

Quantum computers are fundamentally different to computers we are familiar with. Classical computers – including supercomputers – function using the binary system. All the information these computers process is described by binary digits, also known as bits, which are represented through digital components that can only take on the value of either 0 or 1. 

Quantum computers do not use bits as the basic unit of information. Instead, they use quantum bits or qubits.

These qubits can be any atom or subatomic particle. Because qubits are physical particles themselves, they function according to laws of quantum mechanics. They can exist as a 0 and 1 simultaneously – unlike classical bits, which can only exist as either.

It is possible for these qubits to then become linked or ‘entangled’ with another. When they are entangled, their quantum properties become indefinitely correlated. Measuring one qubit provides measurements on the rest (even if the qubits were to become separated across space).

This bizarre phenomenon is known as entanglement and is key for quantum computing as it reduces the total number of steps to solve a problem, which makes quantum computers exponentially faster at solving complex problems.

In July 2021, The University of Science and Technology in China (USTC) used its cutting-edge quantum computer to resolve a problem within just over an hour, that otherwise would have taken eight years for today’s most powerful supercomputer.

The unique ability for quantum computers to tackle complex problems in a timely manner has led to confidence they will be used for enabling faster artificial intelligence, discovering new pharmaceuticals through chemical simulation, large-scale supply chain optimisation, and cracking digital encryption.

Quantum communication networks enable users to transmit sensitive information with confidence


Quantum encryption prevents a third party from observing or copying any information transmitted in a quantum communication network.

Any interference in a quantum communication network (e.g., eavesdropping) results in the connection between users immediately cutting off. This is due to the fact that qubits, which are extremely sensitive to any interference, are used to transmit the encryption key.

Quantum encryption guarantees the security of information by the laws of quantum mechanics.
These quantum communication networks are not only secure, but also suitable for transmissions over long distances, making them practical for civic and defence purposes.

China has already established its own quantum network that spans over 4,600km across the country, connecting financial institutions and critical infrastructure providers.

Quantum sensor devices enable greater precision in timing, sensing and imaging

Quantum sensors exploit their extreme sensitivity to changes in acceleration, gravity and time. They have the potential to enable more accurate and reliable measurements, as well as to detect certain features in an environment that were previously undetectable.

For instance, a satellite equipped with a quantum gravimeter could potentially detect submarines with better ability and accuracy than existing technologies like radar. They may also become capable of detecting underground structures – something not possible with existing technology.

Meanwhile, a quantum magnetometer can aid discovering new mineral deposits, by its ability to detect at greater depths than conventional magnetometers.

Quantum technology is crucial for protecting Australia’s national interest

There are two dimensions of the national interest that quantum technology can either significantly enhance or undermine: economic prosperity and security, and defence.

Successful development and commercialisation of quantum technology will create substantial economic growth and gains in productivity. For Australia alone, the quantum technology industry is conservatively estimated to generate $4 billion dollars in revenue and create 16,000 new jobs by 2040.
However, only a few countries may come to control supply of quantum technology. This would undermine the economic security of the countries that would have to buy from them. These countries would become reliant on their supply of quantum technology, and any disruptions could have far-reaching implications across industries.

The successful development of quantum technology will also strengthen military capabilities. Quantum technology may become so significant that quantum warfare emerges, introducing new scenarios and military strategies centred around the use of quantum technologies.

Uneven progress in research and development of quantum technology poses a significant risk for countries

The leading quantum innovators – China and the US, have both made it explicitly clear that quantum technology is a critical priority for their national security.

These inhibitions have resulted in collaborative research and development efforts being hindered. For instance, traction for a quantum partnership between the US and EU has not progressed beyond basic scientific research. Likewise, any form of bilateral or regional cooperation on common standards or common infrastructure has struggled to transpire anywhere.

This lack of cooperation driven by securitisation is leading towards uneven progress between countries over quantum research and development. This is particularly evident in the registered patents for quantum technology.

Together, China and the US possess almost 70% of all the patents for quantum technology registered since 2015.

There is a real danger the global quantum technology industry will become contested by only these two rivals. With their tremendous capacity to fund innovation, attract and develop talent, and to secure supply chains of relevant critical materials and components, other countries will fail to keep pace.

If unaddressed, this would provide China and the US the sole opportunity to shape the common infrastructure of an interconnected quantum network, which in the future could become the quantum internet used for securely transmitting immense volumes of data at high-speed between countries.

China and the US would also be in a privileged position to determine the rules surrounding ethical use. For instance, they may decide it is acceptable for the information of today which is protected by existing encryption methods like RSA-2048 (and previously understood to be virtually unbreakable) to be cracked by quantum computers.

Countries in the Indo-Pacific may be willing to use their control over the quantum technology market to coerce others

If uneven research and development persists, American and Chinese producers will obtain market control over quantum technologies and quantum-enabled goods and services.

China, as the region’s leading quantum technology and influential economic power, may be the most likely to use this geoeconomic leverage to coerce others.

China has already used its monopoly over other markets to sanction regional partners in the past. In 2010, China suspended its exports of rare-earth minerals to Japan, following a maritime incident near the contested Senkaku Islands that led to a diplomatic row.

China has also engaged in coercive trade practices against Australia and has used its Belt and Road Initiative (BRI) to coerce partners into surrendering sovereign assets.

The US may also use this geoeconomic leverage to coerce partners on national security grounds. In the Indo-Pacific, countries like Malaysia and Philippines maintain modest ties with both China and the US. If these countries indicate they may reach a deal with China for defence-related quantum technology, the US could coerce these countries into abandoning the deal and purchasing their equipment instead.

The US has done this in the past in relation to military hardware. In 2018, the US warned Turkey it would suspend its F35 fighter-jet contract if the country proceeded in a deal with Russia for their S-400 surface-to-air missile (SAM) systems instead of purchasing American Patriot SAM systems.

Australia has the opportunity to drive Indo-Pacific cooperation on quantum technology

The priority for Australia is to foster collaborative research and development on quantum technology to counter uneven progress.

Australia must lead and engage with Canada, France, India, Japan and UK and others who are engaging with quantum initiatives, in establishing an ‘Indo-Pacific Partnership for Critical Technology’.

This partnership would be an opportunity for Australia to engage with the countries expressing the same concerns of becoming sidelined in critical technologies. The European Union is a case-in-point - which fears its’ tech economy and innovation will fade to irrelevance by 2030 against China and the US.

The purpose of this partnership would be to encourage pooling of resources for research and development through government funding for cross-institutional programs and support for start-ups, facilitation of activities to develop common infrastructure and standards as well as an ethical framework, and to generally promote cooperation rather than competition.

A successful partnership would place Australia at the forefront of the quantum revolution. It would strengthen Australia’s advanced technological capacity to support its economy and defence, and would make Australia less susceptible to the geoeconomic behaviour of China and the US.

Matthew Kacki is a research intern at the Perth USAsia Centre.