CHINA'S SELF-RELIANT CHURNS : RESEARCH

 

China plans its rise without U.S. technology : Bewilderingly complex production has stymied Chinese businesses, which instead import the majority of the semiconductors they require. Despite tens of billions of dollars invested -

China's 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, just recently 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 the 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.

A confrontation has long been brewing for more than a decade. Long-held Chinese policies to winnow reliance on foreign tech got a boost in 2013, after disclosures by Edward Snowden about National Security Agency hacks that relied on American firms.

American companies have long complained about policies mandating tech transfer. Chinese government-backed hackers aimed at American intellectual property have further raised tensions.

China in the past used corporate espionage to support economic interests, including in high-tech fields that the government is now making a priority.

The latest intrusion against business and government agencies used Microsoft email systems and was discovered one recent weekend. Tentatively linked to Chinese hackers, it is likely to sharpen a divide that could split the tech world.

In recent weeks, Chinese officials have repeatedly emphasized the danger of ''choke points'' where the United States controls key foundational technologies.

China Development Bank - the country's policy lender, said last week that it was preparing over $60 billion in loans for more than 1,000 firms key to strategic innovation and had raised $30 billion for a new government backed.

A Chinese Academy of Engineering official, Ni Guangnan, wrote recently that the country should create a ''Chinese System'' that could supplant the combined systems of Intel, Microsoft, Oracle and others that have historically dominated computing.

The tech supply chain remains hugely complex and resolutely global, and too much meddling in the markets can have unforeseen consequences, experts have warned. Top-down jockeying by the United States over microchips has in parts triggered a chip shortage that recently auto industry.

In the U.S., President Biden has warned that the United States needs to keep up with China on investments in infrastructure, some in support of  technology industries, including electric vehicles.

''If we don't get moving, they're going to eat our lunch,'' he said while making the case for $1.9 trillion economic stimulus plan.

The phrase echoed one he had made as a candidate only two years before - to dismiss the challenge posed by China. ''China's going to eat our lunch? he said while stumping in Iowa in 2019. ''C'mon, man!''

The World Students Society thanks authors, Paul Mozur, Stephen Lee Myers, Chris Buckley, Claire Fu and Lin Qiqing.