| Sumario: | States face a dilemma on how to balance gains from technological advancement with the risks of dependence. Technology is central to government objectives of security and growth. As innovation systems become globalized, countries cooperate to catch up and stay at the innovation frontier. Interdependence, however, also exposes states to potential coercion. We argue that a state's position vis-à-vis technological interdependence is not primarily derived from international structures. Rather, knowledge shocks shape how states balance the trade-offs between innovation gains and security risks. These shocks provide a focal point for complex state structures to overcome an internal coordination challenge in realigning national positions. Such trade-offs are clearest in US–China relations. We test our argument firstly with an analysis of over half a million Chinese newspaper articles from 2005 to 2021. We then analyze an original corpus of policy documents to examine institutional shifts. We find that US shocks—the Snowden revelations and technology restrictions—produce a shift away from technological interdependence, toward security-focused self-reliance. Our paper contributes to understanding the process through which great powers change positions on technological interdependence, and the ways in which domestic innovation strategies are shaped by international interactions.
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