China is freeing up tens of billions of dollars for its tech industry to borrow. It is cataloging the sectors where the United States or others could cut off access to crucial technologies. And when its leaders released their most important economic plans last week, they laid out their ambitions to become an innovation superpower beholden to none.
Anticipating efforts by the Biden administration to continue to challenge China’s technological rise, the country’s leaders are accelerating plans to go it alone, seeking to address vulnerabilities in the country’s economy that could thwart its ambitions in a wide range of industries, from smartphones to jet engines.
China has made audacious and ambitious plans before — in 2015 — but is falling short of its goals. With more countries becoming wary of China’s behavior and its growing economic might, Beijing’s drive for technological independence has taken on a new urgency. The country’s new five-year plan, made public on Friday, called tech development a matter of national security, not just economic development, a break from the previous plan.
The plan pledged to increase spending on research and development by 7 percent annually, including the public and private sectors. That figure was higher than budget increases for China’s military, which is slated to grow 6.8 percent next year, raising the prospect of an era of looming Cold War-like competition with the United States.
wrote on the eve of the legislative meetings now underway in Beijing.
The road to the “global peaks of technology,” as Mr. Xi has described China’s aspirations, is decidedly uphill. The government had previously set out to spend 2.5 percent of gross domestic product on research and development in the last five years, but actual expenditures failed to reach that target.
domestic chip production met only 15.9 percent of its chip demand in 2020, barely higher than the 15.1 percent share it accounted for in 2014, according to IC Insights, an American semiconductor research firm.
China’s premier, Li Keqiang, last week detailed proposals to accelerate the development of high-end semiconductors, operating systems, computer processors, cloud computing and artificial intelligence.
“I think they’re really worried,” said Rebecca Arcesati, a tech analyst with the Mercator Institute for China Studies in Berlin. “They know that without access to those technologies, they won’t be able to reach their targets.”
The new strategy, to a degree, rebrands the country’s previous Made in China 2025 campaign, which sought to propel it to the lead in a range of cutting-edge technologies. It broadly set out to produce 70 percent of the core components that Chinese manufacturers needed by 2025. The plan scared trade partners and contributed to a punishing trade war with the United States.
“China wants to reduce its dependency on the world — not to reduce its trade and interaction but to ensure that it is not vulnerable to the kind of strategic blackmail against China that it has historically used against others,” said Daniel Russel, a former American diplomat who is now a vice president at the Asia Society Policy Institute.