China is increasing investments in science and technology, aiming for self-reliance and to become a global tech power. The finance ministry increased funds for the industrial sector by $1.93bn to support areas such as semiconductors. The National Development and Reform Commission (NDRC) plans to accelerate hard tech infrastructure construction, including AI, 5G, and big data. China aims to consolidate its leading position in electric vehicles and solar panels, and the government is committed to driving innovation with increased funding for local science and tech advancement.
Premier Li Keqiang said in his work report to the opening of the annual meeting of China’s parliament: “Scientific and technological policies should aim at building up our country’s strength and self-reliance in science and technology. The new system for mobilizing resources nationwide should be improved, we should better leverage the role of the government in pooling resources to make key technological breakthroughs and enterprises should be the principal actors in innovation.”
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China’s largest tech companies, such as Alibaba Group and Tencent Holdings, were targeted by a long, bruising regulatory crackdown that Beijing says it is now easing. The state planner warned that China’s supply chains faced the risk of numerous bottlenecks and “chokepoints”, saying government would plan and implement a number of major science and technology projects to increase the country’s strength in the “frontiers of international competition”.
China has been striving to become a global tech power, with President Xi Jinping urging the nation to strengthen its self-reliance in science and technology. Beijing initiated its high-tech industrial development push ‘Made in China 2025’ in 2015, with the goal of producing 40% of chips consumed domestically by 2020, and 70% by 2025. However, as of 2021, domestic microchip consumption was only 16%.
China has also been under increasing pressure from the United States, which has cited national security in restricting access to Chinese semiconductors and artificial intelligence technology. This prompted Chinese president Xi Jinping to talk to Dutch Prime Minister Mark Rutte at the G20 summit in November 2022, where he emphasized the need for cooperation.
The United States is pressuring the Netherlands to reduce sales of advanced semiconductors and equipment to China, as Eindhoven is home to ASML, the largest producer of chipmaking devices. In January 2023 Dutch Prime Minister Rutte and Minister Hoekstra visited the White House, with ASML being on the agenda. In response to US pressures, China is investing billions of dollars into its tech sector for self-sufficiency.
mr-louzhu on March 5th, 2023 at 21:11 UTC »
In the semiconductor discussion, China has a critical deficit.
The US sanctions basically knee capped their access to components and equipment necessary to stay competitive in the chips manufacturing market. So we're talking about phones, tablets, computers, network systems, smart home appliances, etc.
Not only can Chinese companies like Huawei no longer access the parts necessary to participate in this space but it has also lost access to the expertise. Many tech workers in China were given the ultimatum of quitting their jobs or losing their US citizenships. After that announcement came down, there were a ton of resignations. Their high tech sector got instantly brain drained over night with one proclamation.
So, of course China is making these investments.
The only problem is some of the technologies they're trying to become self-sufficient in represent about 30 years of R&D investment. So, they have a lot of catch up to do.
the_real_orange_joe on March 5th, 2023 at 12:55 UTC »
Something worth noting, the production of microchips is vastly different than the production of other goods due to the speed of improvement. As such self reliance in microchips will be an impossible task for the Chinese. The fabs alone cost TSMC billions of dollars, but there’s a key difference. When TSMC releases a new chip, they go straight into the highest end products, 1200 smartphones and the like. If the Chinese setup a new fab that’s ~10 years behind (that’s the last chip size that you can build without a EUV machine from ASML thus a reasonable assumption for where they’d start) there won’t be a high-end marker for those chips. Meaning that they’ll also need to spend billions, but their fabs will produce chips that could be put in $50 consumer goods. Even if they crack the sub 14nm space they’ll be stuck in a game of catch-up where they have to consistently spend billions on obsolete fabs. Essentially, the new chip fabs will allow for self reliance, but they’ll probably never catch up and if they do, it’ll be a multi trillion dollar endeavor. Also, my analysis ignores every other aspect of chip making. They would still need to have designers compete with the west for true self reliance plus they’ll need to figure out EUV alternatives or build machines themselves which seems unlikely given Intel has been incapable of breaking past 14nm.
merien_nl on March 5th, 2023 at 10:44 UTC »
Submission statement: China is increasingly seeking self-reliance in technology due to trade tensions with the US and Europe. Previously known as the "factory of the world," China is now focused on developing and producing its own technology, rather than incorporating imported technology. Recent events, such as the sanctions against Huawei, discussions on semiconductor technology, and supply chain problems during the COVID pandemic have highlighted the vulnerabilities of globalization and the strategic importance of having power over key technologies.