PremiumChina falls well short of Taiwan, South Korea and the United States in its capacity to manufacture the most advanced semiconductor chips. Nevertheless, the threat posed by Chinese access to these high-tech chips through Western suppliers and their potential use in military applications was serious enough for US President Joe Biden to announce significant export controls on 7 October. The new rules prevent the export to China of not just equipment used to manufacture high-end semiconductor chips but also of all American components to chip manufacturers in in China.
Americans involved in the production of advanced semiconductors in China now face the same level of restrictions on their work as those in the nuclear, biological and missile proliferation fields. Unsurprisingly, this has led to an almost immediate exodus from China of many Americans, including Chinese Americans, working for Chinese chipmakers. Under its Made in China 2025 industrial programme, the Chinese party-state does not lack financial resources to pursue its high-tech ambitions. What it does lack though are the necessary human resources. The Biden administration’s move, therefore, deals a potential body blow, at least in the short term, to China’s high-tech ambitions.
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Coming as it did on the eve of the 20th National Congress of the Communist Party of China (CPC) that got underway on Sunday, the American action will be read in Beijing as further confirmation that the US is out to stymie China’s growth and block its path to prosperity and global technological leadership. If the report to the Congress presented by General Secretary Xi Jinping is anything to go by though, the CPC appears to have been preparing for this eventuality for some time now.
It is not a coincidence then that there is, for the first time, in the latest CPC Congress report, a separate section titled “Invigorating China through Science and Education and Developing a Strong Workforce for the Modernization Drive" and a specific sub-section devoted to “Improving systems for scientific and technological innovation". But even before Xi gets to these sections, he declares that China has “accelerated efforts to build our self-reliance and strength in science and technology, with nationwide R&D spending rising from 1 trillion yuan (approx. $140 billion) to 2.8 trillion yuan (approx. $390 billion), the second highest in the world". There is also an especial effort to convey a significant point — “Our country is now home to the largest cohort of R&D personnel in the world" — precisely one of the realities the US has sought to change.
Indeed, it is expressly declared as part of the “Missions and Tasks of the Communist Party of China", that China “join the ranks of the world's most innovative countries, with great self-reliance and strength in science and technology" (19). The “great" is a giveaway of the seriousness of the goal as well as the distance China seeks to put between itself and the competition.
Meanwhile, China has an extensive programme underway of civil-military integration. In most countries this is simply about greater coordination between civilian and military officials and an attempt to prevent the wastage of resources. In China, however, the concept is somewhat more advanced and has society- and economy-wide implications captured in the more exact translation of the concept as “military-civil fusion". This reality then offers a new perspective on Chinese declarations in the 20th Congress report about “share[ing] resources and production factors between the military and civilian sectors" or the desire to “boost China’s strength in strategic science and technology". The US and other Western countries have cause enough, therefore, to worry about the potential military use of semiconductors or other high-end technology that is exported or transferred to China.
Setbacks with the US/West have, however, not deterred China’s ambitions to both internationalise its science and technology prowess and to profit from such exposure. The report declares that China “will expand science and technology exchanges and cooperation with other countries, cultivate an internationalized environment for research". The record shows, however, that there are inevitably costs to countries hosting such exchanges and technology — of Chinese enterprises dominating the market in underdeveloped or developing countries and potentially stealing technology or buying out technology firms in the case of developed countries. And in all cases, there are threats to data security and privacy of foreign citizens through the deployment of Chinese surveillance technology as the party-state seeks to build up a database of scale to both power artificial intelligence applications as well as further its security interests around the globe.
The Chinese pursuit of technological atmanirbharta bears careful watching.
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