DSET Speaks at the Sydney Dialogue, Addressing AI Competition and China’s Authoritarian Threats

The Sydney Dialogue, hosted by the Australian Strategic Policy Institute (ASPI), took place in Sydney from Dec. 4 to Dec. 5, focusing on global technology competition, AI governance, digital infrastructure security, and geopolitical risks. Taiwan was invited to participate for the second consecutive year, with National Security Council (NSC) Advisor Dr. Lee Yuh-Jye leading the delegation and presenting Taiwan’s perspectives on hybrid threats and national responses.

The Research Institute for Democracy, Society, and Emerging Technology (DSET) also took part in the Dialogue. You-Hao Lai, Deputy Director of DSET’s Democratic Governance Program, served as a panelist in the session “AI Superpowers and the Great Race.” He joined international experts to discuss competing AI governance models, geopolitical risks, and building democratic resilience—underscoring DSET’s expanding role in global technology policy discussions.

Reassessing China’s “State-Led” AI Governance Model and Its Risks

In his panel remarks, Deputy Director Lai urged policymakers and the international community to closely examine the differences between the United States’ “market-driven model” and China’s “state-driven model” in AI development. He emphasized that a precise understanding of these models is crucial for identifying the true sources of risk in China’s system.

Lai shared insights from DSET’s recent report, “Let a Hundred Flowers Blossom: Local Competition and the Rise of Chinese Semiconductor Capacity,” noting that China’s semiconductor overcapacity reveals persistent misalignment between central and local government policies—even within a state-led framework.

However, Lai stressed that democracies must not overlook the Chinese government’s ultimate control over its AI systems and information environment. He previewed findings from his upcoming report, “The Authoritarian Gaze: China’s Global Data Reach and the Systemic Risks to Democracy,” warning that China is expanding its authoritarian data governance model through digital infrastructure projects abroad. Meanwhile, popular Chinese AI services continue to draw overseas users into data ecosystems subject to Chinese government access and control.

Drawing on Taiwan’s experience, Lai emphasized that democracies should strengthen public trust in emerging technologies through transparency, public deliberation, and international cooperation—especially as authoritarian approaches to digital governance continue to grow. The session was moderated by Jisoo Kim, Co‑Founder of Clear AI, with Selina Xu, Head of China AI Research and Strategic Initiatives at the Office of Eric Schmidt, serving as the other panelist.

Taiwan on the Front Line of Hybrid Threats: The Importance of International Cooperation

In the session “Technology and Hybrid Threats,” NSC Advisor Lee noted that democracies worldwide are facing hybrid threats that are increasingly large‑scale, organized, and rapidly evolving—with Taiwan on the front line. China has funded online content creators, infiltrated e‑commerce and social media platforms to collect personal data, and conducted influence operations aimed at dividing Taiwanese society. These tactics are subsequently exported to undermine other democracies.

Advisor Lee stressed the importance of democratic partners building cross‑border cooperation, recognizing emerging threats enabled by digital technologies, and responding collectively to safeguard shared democratic values.

This year’s Sydney Dialogue convened government, industry, and academic representatives from Australia, the United States, the United Kingdom, South Korea, India, Lithuania, the European Union, NATO, and numerous other countries and organizations.

The Taiwan delegation was led by NSC Advisor Lee and included Representative to Australia Douglas Yu-Tien Hsu, as well as senior officials and experts from the Ministry of Foreign Affairs, the Administration for Cyber Security under the Ministry of Digital Affairs, the Investigation Bureau, the National Institute of Cyber Security, and the International Cooperation and Development Fund. Their participation underscored both the Taiwanese government’s and policy think tanks’ strong commitment to democratic digital governance and a forward-looking approach to national security.

DSET will continue to advance Taiwan’s role as a trusted partner within the international democratic community and contribute to global efforts in AI governance, cybersecurity resilience, and the defense of democratic systems.