Just days after the United States hit China with sweeping new tech export controls, Chinese leader Xi Jinping on Sunday called for self-reliance and the need to win a battle over “key core technologies.”
In his nearly two-hour address at the Communist Party congress, Mr. Xi emphasized the importance of technological innovation, but made strong indications that the state, not private industry, would guide key initiatives. Making only oblique references to broader tech clashes with the United States, he called for China to cultivate talent and fund basic scientific research as it seeks to increase its global competitiveness.
“Xi didn’t quite frame China’s path forward as a competition between China and the West, but rather as a storm of external pressures to be weathered,” said Kendra Schaefer, head of tech policy at Trivium China, a research group.
For China’s beleaguered internet industry, there was little indication that a series of strict new rules focused on cybersecurity, data protection and monopoly behavior would change.
Mr. Xi praised the direction of the internet environment, noting that the “cyber ecology continued to improve.” It was a signal that strict censorship and the use of the internet to spread propaganda would not lessen.
Five years ago, he called for developing a “market-oriented system for technological innovation.” This time, he focused on “national strategic needs,” a strong signal that the government will play the leading role in innovation initiatives going forward.
Instead of the web, Mr. Xi focused on achievements elsewhere. He said that China had “joined the ranks of innovative countries,” but pointed mostly to state-backed projects, including manned spaceflight, aircraft manufacturing, biomedicine and supercomputing. In another nod to government-led innovation, he said China would move fast to launch major national projects that are strategic, big-picture and of long-term importance.
Notably missing from Mr. Xi’s list of accomplishments were microchips, where China has struggled to achieve its goal of freeing itself from reliance on foreign countries. Although Mr. Xi said China would speed its efforts to build self-reliance, new United States rules restricting Chinese microchip and supercomputer firms’ access to key tech are likely to bite hard in the coming years, said Paul Triolo, senior vice president for China at Albright Stonebridge Group, a strategy firm.
“Xi likely does not yet appreciate how serious the new U.S. moves are for China’s technology ambitions. When the leadership chooses to respond after the party congress, China could unleash some surprises of its own,” he said.
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