A Policymaker’s Guide to China’s Technology Security Strategy
KEY TAKEAWAYS
Key Takeaways
Contents
China’s Three-Pronged Technology Security Strategy 2
Potential Roadblocks to China’s Technology Security Strategy 5
Introduction
A country’s technological innovation and production capacity fuel its national strength. China, a formidable geopolitical power, is actively pursuing technological supremacy to secure its global leadership. The Chinese Party-state has integrated technology security into its broader national security framework, as it envisions a future wherein technological supremacy not only begets economic growth, but also fortifies the Party-state’s geopolitical ambitions. Yet, questions remain: What is Beijing’s strategy for enhancing its technological security? What factors could influence Beijing’s technological ambitions? And how far is the Chinese Party-state willing to go to ensure this strategy’s success?
Notable Quotes From Chinese Leadership and Policy Documents
“The world today is undergoing great changes unseen in a century, and scientific and technological innovation is one of the key variables.”
当今世界正经历百年未有之大变局，科技创新是其中一个关键变量。[1]
— Xi Jinping
“Science and technology are the foundation of national strength and prosperity, and innovation is the soul of national progress.”
科技是国家强盛之基，创新是民族进步之魂。
“Whoever seizes the ‘tiller’ of technological innovation and takes the first step in technological innovation will be able to take the lead and gain advantages.”
谁牵住了科技创新这个“牛鼻子“，谁走好了科技创新这步先手棋，谁就能占领先机、赢得优势。
— The Total National Security Paradigm: A Study Outline 《总体国家安全观学习纲要》[2]
China’s Three-Pronged Technology Security Strategy
Xi Jinping’s contribution to Chinese security theory, the treatise The Total National Security Paradigm: A Study Outline (总体国家安全观学习纲要), is a useful starting point.[3] Published in 2022, it describes how the Chinese Communist Party (CCP) integrates technological security into China’s broader national security framework by emphasizing that “science and technology are the foundation of national strength and prosperity, and innovation is thesoul of national progress.”[4] To safeguard this soul, China must not only become a strong, innovative technological power, but also effectively deter and offset strategic rivals, especially those that currently have a technological edge over China. Achieving this requires China to seize the “tiller” of techno-scientific innovation.[5]
Official party documents and publications such as this offer a candid assessment of China's uneven technological development. The Total National Security Paradigm finds that while China lags in innovative capabilities in some domains, it is catching up in others and leading in several cutting-edge fields.[6] To translate technological primacy into economic growth, Beijing likely needs a tailored approach to its technology development. Policies such as Dual Circulation, Made in China 2025, and the 2022 Document 79 (which sets an explicit 2027 deadline to eliminate dependence on Western technology in the information and communications technology [ICT] sector) advocate for specific strategies for different technologies.[7] Looking ahead to 2035, China’s plan for achieving technological primacy seems to unfurl along three prongs.
China’s integration of technology security into its national security framework signals more than just a pursuit of innovation—it reflects a broader ambition to define and lead the future global order.
Prong One: Preserve and Fortify Competitive Advantages
China seeks to preserve and fortify its competitive advantages in technology. The Party-state leverages China’s established strengths: deep reservoir of manufacturing expertise, a large labor force, dense supplier networks, and a systematic approach to industrial upgrading.[8] Advanced manufacturing, especially electronics and renewable energy equipment such as solar panels and electric vehicle batteries, exemplifies this strategy. The Chinese electronics sector is a well-established success story, with China emerging as the world’s factory following its transition from a planned economy to a more market-oriented system under its Reform and Opening Up Policy.[9] In recent years, Chinese solar panels and electric vehicles and batteries have been dominating global markets.[10] In 2023, China installed more solar panels than the United States had in its history.[11] As solar power is projected to become the largest renewable energy source by 2029, driving 80 percent of the growth of global renewable capacity, and with models predicting that China’s cumulative solar photovoltaic capacity will surpass 1 terawatt by 2026, it seems likely that China will maintain its dominance in this sector.[12]
Analysts note that technological innovation in China often comes from production lines instead of just universities.[13] The Chinese industrial work force’s ability to improve processes, coupled with competitive export pricing—supported by both industrial policies such as subsidies and controversial measures such as exchange rate interventions—has propelled these sectors.[14] China’s advancements in industrial robotics, which integrate AI-driven software with hardware, indicates its push toward the next phase of industrial upgrading.[15] China’s lead in advanced manufacturing is likely to continue going forward.
Prong Two: Address Relative Technological Deficiencies
China wants to address its relative technological deficiencies. The Party-state’s focus on innovation is clear in its efforts to reduce reliance on foreign inputs. The 2018 export controls on ZTE already sounded Chinese policymakers’ alarm for a stronger domestic semiconductor sector, and the 2022–2023 semiconductor export controls intensified China’s push for self-reliance.[16] Chinese companies rushed to import lithography machines and other semiconductor equipment from Dutch, Japanese, and American firms, which underscored the Chinese semiconductor sector’s reliance on foreign inputs, investment, and expertise.[17] With $142 billion earmarked for semiconductor investment, far surpassing the United States’ $39 billion, China demonstrates strong determination to strengthen its domestic industry and buffer it against leverage from foreign governments.[18]
The situation intensified when Japan and the Netherlands followed the United States in applying semiconductor export controls on China in early 2023, which prompted a strong reaction from the Chinese Semiconductor Industry Association (CSIA).[19] Released in both Mandarin Chinese and English, the CSIA’s statement in Mandarin Chinese conveyed a more forceful tone, condemning U.S. and other partner countries’ export controls, whereas its English translation presented a more measured approach and called for continued foreign investment and collaboration in the semiconductor industry.[20] For instance, the original Mandarin Chinese statement claimed that “any man-made action to tear apartment the global industrial system will cause immeasurable harm to the lives and development of people around the world,” clearly referring to allied export controls. In contrast, the English translation provided by CSIA struck a more tempered tone, stating that “inappropriate intervention by government and authorities can cause a disruption to our industry.”[21] This discrepancy between the existential tone of the Mandarin Chinese statement and the more neutral tone of its English translation highlights China’s dual approach to technological dominance, which urges domestic players to catch up while simultaneously engaging in the international innovation system to maintain access to key technologies and inputs.[22]
Chinese policymakers have to balance international market access with indigenous development and production.[23] While China is reportedly developing its own lithography capabilities, it is unclear whether China will be able to make significant breakthroughs or replace key foreign lithography and design equipment providers with homegrown alternatives.[24] The Dutch government’s August 2024 decision to restrict—via licensing requirements—semiconductor equipment company ASML from conducting maintenance on existing deep ultraviolet lithography (DUV) machinery (1970i and 1980i DUV lithography machinery) in China could significantly hinder the Chinese semiconductor industry’s ability to develop advanced nodes.[25] With tighter export controls from allied governments, China’s only option may be to innovate its way out of these controls. As of September 2024, unconfirmed reports suggest that China has developed a DUV lithography machine capable of producing chips at 8 nanometers and below.[26] Moreover, a state-funded lab in China has said that it has achieved a breakthrough in photonics by integrating a laser light source into a silicon-based chip. If this is true, China may bring about a paradigm shift in the industry to enable even larger data transmission between chips.[27] These breakthroughs have yet to be substantiated, but they are signaling the Chinese Party-state’s determination to overcome its semiconductor sector’s shortcomings.
Prong Three: Secure New Technology Frontiers
China aims to secure a pioneering edge in new technology frontiers and outpace global competitors. For instance, China’s approach to AI is notably different from the pathways of global leaders such as the United States. While the United States has traditionally excelled in breakthrough aspects of AI, such as developing large language models, China’s competitive advantage lies in its unrestricted access to large pools of data from its population (though the quality of the data, which is hard to gauge also matters).[28] The Chinese government encourages industries to leverage this data and integrate AI into their operations for productivity gains. In his 2024 work report, Premier Li Qiang emphasized an “AI Plus” strategy, urging the application of AI across all economic sectors.[29] China is producing more AI research publications than the United States, though the latter still leads in high-impact generative AI research (the United States claims half of the top 10 list of top-cited generative AI research, as opposed to China’s one spot in the top 10).[30]
China’s AI ecosystem is growing, supported by companies such as Baidu, Alibaba, ByteDance, Tencent, SenseTime, iFlyTek, and Megvii in addition to many research institutions such as Tsinghua University.[31] Domestically, China is setting its own standards and benchmarks for AI, as companies such as DeepSeek, with its groundbreaking r1 model that challenges established models, emerge as frontier AI players; internationally, companies such as SenseTime are assisting authoritarian regimes, such as Saudi Arabia, in developing AI-enabled smart cities and surveillance structures.[32] Whether Chinese company SenseTime’s Sense Nova 5.0 model has surpassed GPT 4.0 Turbo model in performance, and whether DeepSeek’s r1 model was indeed trained on a cost-efficient $5.5 million, China is undeniably making significant progress domestically and internationally with its AI advancements and may soon rival other global players.[33]
In short, Beijing employs a tiered strategy to secure its technological security. It promotes the diffusion of innovation across academic, industrial, and governmental sectors, supported by whole-of-society initiatives such as Military-Civil Fusion (MCF), while providing subsidies to bolster major economic actors. Alongside these efforts, practices such as requiring foreign companies to transfer technologies and illegally acquiring trade secrets are also part of its playbook. The Total National Security Paradigm emphasizes that techno-scientific progress is the very “soul” of national progress, essential to the CCP’s goal of national rejuvenation.[34] For Chinese policymakers, the stakes could not be higher—failure is simply not an option.
Potential Roadblocks to China’s Technology Security Strategy
While China’s technology security strategy may serve as a guiding star for its policymakers, there are significant roadblocks to the Party-state’s ambitious end goals. China’s political economy is a Frankenstein of command-and-control and market forces, vague central directives and creative local interpretations and implementations, along with regulatory cycles of loosening and restriction. In such a paradoxical system, China grapples with formidable structural challenges beyond the innovation realm: uneven workforce investment, nonmarket conditions that favor state-owned actors, bureaucratic inefficiencies, and growing geopolitical headwinds. Each of these obstacles has the potential to severely undermine China’s technology security.
First, China’s uneven investment in human capital threatens to stall its technological ambitions. While certain elite Chinese universities have emerged as world-class institutions driving innovation, broader efforts to nurture talent remain lacking.[35] In 2021, the Chinese government spent 3.3 percent of its gross domestic product (GDP) on education, compared with 4.3 percent for the United States.[36] The level of investment might seem comparable, but China has a much larger workforce, amounting to 740.4 million in 2023, with an additional of 7 million over the previous year.[37] In contrast, the United States has a workforce of 134.1 million in 2023, with an added 1.81 million compared to the previous year.[38]
College enrollment in China has skyrocketed from 2 million students in 1990 to 44 million in 2021, with postgraduate enrollment growing even more steeply, from 93,100 in 1990 to 3.33 million in 2021.[39] However, these impressive figures mask significant challenges. Unequal access to high-quality education and limited domestic mobility hinder large segments of China’s labor force.[40] The hukou system, a household registration policy that restricts where individuals can live and work, along with regional economic disparities, exacerbates these challenges, creating gaps in human capital development.[41] The 17 percent youth unemployment rate (among those aged 16 to 24) as of October 2024 underscores the mismatch between the country’s labor supply and economic needs.[42] A key factor is the shortage of job opportunities to accommodate the growing number of graduates.[43] While young people’s preference for jobs in highly competitive cities may play a role, the underlying causes of this labor-market disconnect extend beyond the urban-rural divide.[44] What is clear, however, is that Chinese policymakers recognize a shortfall in high-value “techno-scientific expertise” and are working to improve workforce quality, understanding that a skilled labor force is crucial to achieving technological primacy.[45] To bridge this gap, Chinese policymakers will need to rebalance educational resources across provinces and cultivate a labor force capable of supporting China’s techno-scientific ambitions.
Second, nonmarket conditions could dampen the innovative potential of China’s ecosystem. While state-led investments have fueled rapid growth in the past few decades, this approach has also entrenched significant inefficiencies in the Chinese political economy.[46] Investments often flow into less-productive sectors, driven by political priorities, with state-owned enterprises receiving disproportionate credit despite often being less efficient than private firms.[47] This misallocation stifles innovation and high-tech sector development, which are critical to China’s ambitions. Despite a surge in scientific outputs and patents, China’s total factor productivity—the ability of an economy to generate income from inputs—has declined compared with similar economies.[48] Furthermore, the growing debt burden among local governments and real estate developers raises concerns about financial stability, particularly among local government financing vehicles and real estate developers.[49] Although the Chinese government seems to be shifting away from real estate, there are no clear alternative sectors, such as those in the new productive forces industries, to fill the gap left by declining real estate-driven growth.[50] To foster long-term innovation, the Party-state should allow capital to flow to private firms and new productive forces while reducing its reliance on property-driven growth. However, this approach is a second-best alternative to the politically more difficult approach of promoting consumption. Prioritizing consumption-led growth would require policy adjustments to boost household income and strengthen consumer demand. This, in turn, would create a more sustainable economic foundation for a more innovative and productive society.
Third, the success of China’s technological ambitions hinges on the effectiveness of its bureaucratic apparatus. Although the top-down governance model allows for swift decision-making and large-scale mobilization, it often suffers from bureaucratic inefficiency and corruption. For instance, the Made in China 2025 initiative has been hampered by local governments engaging in cronyism, which distorts the market rather than foster innovation.[51] Furthermore, local governments’ handouts have not translated into measurable productivity gains. A 2022 analysis on Chinese manufacturing firms’ financial reports found little evidence of productivity improvement despite increases in state subsidies.[52] China’s recent efforts to centralized economic and technological decision-making under party organs aim to redirect resources from stagnating sectors to strategic areas such as electric vehicles and biotechnology.[53] While policymaking in China often involves experimentation and real-time adjustments, it remains uncertain whether recentralization will effectively resolve the inefficiencies that have long stalled technological progress.[54] Enhancing bureaucracy efficiency and curbing corruption will be critical to advancing China’s technology security objectives.
Beijing has intensified efforts toward technological self-reliance, though the path forward remains steep and resource-intensive.
Fourth, China faces mounting geopolitical challenges, fueled by its escalating rivalry with the United States and an expanding pushback from other countries. Export controls, sanctions, and restrictions on technology transfer imposed by the United States and its allies have constrained China’s access to critical technologies. These barriers pose significant risks to its technological ambitions, especially in semiconductors, where it remains dependent on foreign expertise and components. Although the United States was the first major economy to implement economic security policies against China, other countries have since adopted a more assertive stance. In January 2025, the European Union concluded its investigation into China’s procurement markets of medical devices and determined that China unfairly restricts European goods.[55] As a result, the EU announced restrictions on Chinese entities bidding for EU government contracts. Around the same time, Japan expanded its chip controls to China, including restrictions on items that could support China’s quantum computing industry.[56] In response, Beijing has intensified efforts toward technological self-reliance, though the path forward remains steep and resource-intensive.[57] The effectiveness of China’s response to these challenges—likely be a combination of indigenous efforts and partnerships with foreign partners—will be crucial in closing technological gaps.
Conclusion
Xi Jinping has acknowledged that overcoming these challenges is essential to realizing the “great rejuvenation” of the Chinese nation, framing them as critical to China’s second centenary goal. In a 2020 speech, he noted that the world is “undergoing great changes unseen in a century, and that scientific and technological innovation is one of the key variables.”[58] In the same speech, Xi optimistically noted that “time and momentum is on our side.”[59] His confidence suggests that, under his leadership, China may be prepared to endure significant hardship in pursuit of its goals. Scholar Evan Medeiros has built on this idea, positing that Xi’s reluctance to address some of China’s deep-rooted structural issues reflects the Party-state’s willingness to endure sustained economic underperformance as part of a long-term vision. Medeiros has noted that, for Xi, the current economic struggles are “growing pains” on the path to future strength, pointing to the revival of “the spirit of sacrifice, self-reliance, and egalitarianism that characterized earlier eras of Maoist rule.”[60] This party-directed revival of Marxist-Leninist voluntarism, which demands sacrifices from cadres, enterprises, and the public to prioritize state objectives over private interests, remains a potent force in Chinese political culture and society at large.[61] RAND researcher Jimmy Goodrich has also noted the Party-state’s preparations for a “fortress economy,” emphasizing national security assets such as food, energy, financial infrastructure, and other domains.[62] Given its top-down perception of a worsening external environment, the Party-state would likely mobilize its masses in response to acute shocks in economic and technology security, and prolonged competition with the United States and the rest of the world.
China’s integration of technology security into its national security framework signals more than just a pursuit of innovation—it reflects a broader ambition to define and lead the future global order. Through its three-pronged strategy for technological supremacy, China aspires to be the techno-scientific vanguard of a new era. However, this grand vision is hindered by uneven investment in its people, inefficient resource allocation, the inertia of bureaucratic complexity, and an increasingly tense geopolitical landscape. While China’s ambitions are vast, its path to technological dominance remains fraught with roadblocks.[63] Equally crucial, however, is how the United States responds. A clear-eyed assessment of China’s technological strengths, weaknesses, and overarching technology security strategy is essential for crafting targeted and effective policies that safeguard American innovation, competitiveness, and security in the years ahead. For that to succeed, the United States needs a strategic approach that includes increased public investment in key areas such as science, technology and engineering, along with appropriate trade, tax, and regulatory policies.
Acknowledgments
The author extends her sincere gratitude to Jonathon Sine, Megan Lamberth, Martijn Rasser, Matthew Johnson, and Robert Atkinson for their feedback and review of this article. She also would like to thank ITIF for providing a platform for this publication. Any errors or omissions are the author’s responsibility alone.
About the Author
Emily Jin (@ew_jin) is a senior China analyst at Datenna, Inc. Her research focuses on U.S.-China competition over regional influence and global order, and policy at the intersection of American economic resilience and national security. She holds an MA in international economics and China studies from the Johns Hopkins School of Advanced International Studies and a BA in psychology from Georgetown University. She is natively fluent in Mandarin Chinese.
About ITIF
The Information Technology and Innovation Foundation (ITIF) is an independent 501(c)(3) nonprofit, nonpartisan research and educational institute that has been recognized repeatedly as the world’s leading think tank for science and technology policy. Its mission is to formulate, evaluate, and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress. For more information, visit itif.org/about.
Endnotes
[1]. The phrase “Great Changes Unseen in a Century (百年未有的大变局)” is a longstanding term in the Chinese Communist Party’s lexicon. General Secretary Xi Jinping framed it as a strategic opportunity to advance techno-scientific progress during the 24th collective study session of the Political Bureau of the CCP Central Committee on October 17, 2020. A detailed explanation is available on The Center for Strategic Translation’s website: https://www.strategictranslation.org/glossary/great-changes-unseen-in-a-century. Xi’s remarks from the session can be accessed here: http://www.xinhuanet.com/politics/2020-10/17/c_1126623288.htm.
[2]. The Total National Security Paradigm: A Study Outline (总体国家安全观学习纲要), is a party-building book published in April 2022. English translation of the whole publication is not available. However, the first chapter has been translated here: https://www.strategictranslation.org/articles/chapter-six-persevere-in-placing-political-security-in-the-predominant-position. The Center for Strategic Translation has also translated into English the portion that details the CCP’s definition of technology security: Office of the Central National Security Commission and Central Propaganda Department, “Chapter Six: Uphold the Predominant Position of Political Security.” Translated by Emily Jin. San Francisco: Center for Strategic Translation, 2025, https://www.strategictranslation.org/articles/safeguard-technological-security, and originally published in Office of the Central National Security Commission and Central Propaganda Department, Zongti Guojia Anquan Guan Xuexi Gangyao: 总体国家安全学习纲要 [The Total National Security Paradigm: A Study Guide], (Beijing: Xuexi Chuban She, Beijing: April 2022); here is the link to the original Chinese publication: https://news.ucas.ac.cn/docs/2024-04/0e2a5f54cc994a738a22930ee022892d.pdf.
[3]. Office of the Central National Security Commission and Central Propaganda Department, Zongti Guojia Anquan Guan Xuexi Gangyao: 总体国家安全学习纲要 [The Total National Security Paradigm: A Study Guide], (Beijing: Xuexi Chuban She, Beijing: April 2022)
[4]. See more on “Total National Security Paradigm” here: “Glossary: Total National Security Paradigm [总体国家安全观],” The Center for Strategic Translation, https://www.strategictranslation.org/glossary/total-national-security-paradigm.
[5]. In Total National Security Paradigm, a book co-authored by the CCP Central Propaganda Department and the Central National Security Commission and published in April 2022, the section on technology security states that “[China] must adopt an ‘asymmetric’ strategy to better leverage [China’s] own advantages.” (“我国科技如何赶超国际先进水平？要采取｀非对称＇战略，更好发挥自己的优势＂). The piece also observes that Western countries had been able to dominate international policies due to their command of high-end technology, stating that “one important reason Western countries have been able to dominate the world since the dawn of the modern era is their mastery of high-end technology.” (近代以来，西方国家之所以能称雄世界，一个重要原因就是掌握了高端科技。) Moreover, countries that seize the “tiller” of technological innovation would be able to gain advantages for themselves: “Techno-scientific innovation has become the main battlefield on the chessboard of global strategy, and the importance of science and technology has increased in all domains. Whoever seizes the ‘tiller’ of technological innovation and takes the first step in technological innovation will be able to take the lead and gain advantages” (科技创新成为国际战略博弈的主要战场，科学技术的重要性全面上升。谁牵住了科技创新这个“牛鼻子“，谁走好了科技创新这步先手棋，谁就能占领先机、赢得优势。), see more at Office of the Central National Security Commission and Central Propaganda Department, “Chapter Six: Uphold the Predominant Position of Political Security.” Translated by Emily Jin. San Francisco: Center for Strategic Translation, 2025, https://www.strategictranslation.org/articles/safeguard-technological-security, and originally published in Office of the Central National Security Commission and Central Propaganda Department, Zongti Guojia Anquan Guan Xuexi Gangyao: 总体国家安全学习纲要 [The Total National Security Paradigm: A Study Guide], (Beijing: Xuexi Chuban She, Beijing: April 2022).
[6]. The chapter on technology security from the study on Total National Security Paradigm finds that China is behind in innovative capabilities in certain domains—“同时，也要看到，我国原始创新能力还不强，创新体系整体效能还不高，科技创新资源整合还不够，科技创新力量布局有待优化。), catching up in some cutting-edge fields (“一些前沿领域开始…进入并跑”), and leading as in some sectors (“一些前沿领域开始进入并跑、领跑阶段，科技实力正在从量的积累迈向质的飞跃，从点的突破迈向系统能力提升”); to read more, see Office of the Central National Security Commission and Central Propaganda Department, “Chapter Six: Uphold the Predominant Position of Political Security.” Translated by Emily Jin. San Francisco: Center for Strategic Translation, 2025. Originally published in Office of the Central National Security Commission and Central Propaganda Department, Zongti Guojia Anquan Guan Xuexi Gangyao: 总体国家安全学习纲要 [The Total National Security Paradigm: A Study Guide], (Beijing: Xuexi Chuban She, Beijing: April 2022); Tanner Greer and Nancy Yu, “Xi Believes China Can Win a Scientific Revolution,” Foreign Policy, April 30, 2024, https://foreignpolicy.com/2024/04/30/china-technology-scientific-revolution-united-states-great-power-competition/.
[7]. Liza Lin, “China Intensifies Push to ‘Delete America’ From Its Technology,” The Wall Street Journal, March 7, 2024, https://www.wsj.com/world/china/china-technology-software-delete-america-2b8ea89f.
[8]. Briana Boland et al., “How China’s Human Capital Impacts Its National Competitiveness,” CSIS, June 17, 2024, https://www.csis.org/analysis/how-chinas-human-capital-impacts-its-national-competitiveness.
[9]. CIA memo on China’s Electronics Industry and the China’s strides from 1981–1985, Document released March 9, 2011 (originally published in March 25, 1986), https://www.cia.gov/readingroom/document/cia-rdp86t01017r000605820001-9.
[10]. Christian Shepherd, “China is All in on Green Tech. The U.S. and Europe Fear Unfair Competition,” The Washington Post, March 29, 2024, https://www.washingtonpost.com/world/2024/03/29/china-clean-green-energy-technology-trade/.
[11]. “China Added More Solar Panels in 2023 Than US Did in Its Entire History,” Bloomberg News, January 26, 2024, https://www.bloomberg.com/news/articles/2024-01-26/china-added-more-solar-panels-in-2023-than-us-did-in-its-entire-history.
[12]. According to models by Rystad Energy, an energy research consultancy based in Norway, China’s solar capacity is on a track of acceleration, with projections that it may top 1 terawatt by the end of 2026, see more here: “China’s Solar Capacity Surges; Expected to Top 1 TW by 2026,” Rystad Energy, https://www.rystadenergy.com/news/china-s-solar-capacity-surges-expected-to-top-1-tw-by-2026; “Solar PV,” IEA, https://www.iea.org/energy-system/renewables/solar-pv; “China’s Mercantilist Policies on Solar Photovoltaics Reshaped Global Innovation, Potentially Making It Harder to Solve Climate Change, New ITIF Report Shows” (ITIF, October 5, 2020), https://itif.org/publications/2020/10/05/china%E2%80%99s-mercantilist-policies-solar-photovoltaics-reshaped-global-innovation/; David M. Hart, “The Impact of China’s Production Surge on Innovation in the Global Solar Photovoltaics Industry” (ITIF, October 5, 2020), https://itif.org/publications/2020/10/05/impact-chinas-production-surge-innovation-global-solar-photovoltaics/.
[13]. Dan Wang, “China’s Hidden Tech Revolution: How Beijing Threatens U.S. Dominance,” Foreign Affairs, February 28, 2023, https://www.foreignaffairs.com/print/node/1129876; Robert D. Atkinson, “China is Rapidly Becoming a Leading Innovator in Advanced Industries” (ITIF, September 16, 2024), https://itif.org/publications/2024/09/16/china-is-rapidly-becoming-a-leading-innovator-in-advanced-industries/.
[14]. “U.S. Trade with China: Selected Resources – China’s Currency Policies,” accessed on October 7, 2024, https://guides.loc.gov/us-trade-with-china/currency-policies; The Department of the Treasury designated China as a currency manipulator more recently in August 2019, with the last time this designation used being in 1994. The Treasury removed China’s designation as a currency manipulator in January 2020, as part of a concession to the Chinese government as China and the United States negotiated a trade agreement. The author is using the language “exchange rate intervention” instead of “manipulation,” as China is currently not designated as a currency manipulator. See Treasury Department’s press releases here: “Treasury Designates China as a Currency Manipulator,” The Department of the Treasury, August 5, 2019, https://home.treasury.gov/news/press-releases/sm751; “The Administration’s Designation of China as a Currency Manipulator,” Congressional Research Service, August 9, 2019, https://crsreports.congress.gov/product/pdf/IN/IN11154/1; Ana Swanson, “The U.S. Labeled China a Currency Manipulator. Here’s What It Means,” The New York Times, August 6, 2019, https://www.nytimes.com/2019/08/06/business/economy/china-currency-manipulator.html; Alan Rappeport, “U.S. Says China is No Longer a Currency, Manipulator,” The New York Times, January 13, 2020, https://www.nytimes.com/2020/01/13/us/politics/treasury-china-currency-manipulator-trade.html; Gerard DiPippo et al., “Red Ink: Estimating Chinese Industrial Policy Spending Comparative Perspective,” CSIS, May 23, 2022, https://www.csis.org/analysis/red-ink-estimating-chinese-industrial-policy-spending-comparative-perspective.
[15]. Emily Jin, “Smart Manufacturing: A Linchpin in China’s Industrial Policy,” Lawfare, September 6, 2022, https://www.lawfaremedia.org/article/smart-manufacturing-linchpin-chinas-industrial-policy; Robert D. Atkinson, “How Innovative is China in the Robotics Industry?” (ITIF, March 11, 2024), https://itif.org/publications/2024/03/11/how-innovative-is-china-in-the-robotics-industry/.
[16]. See more evidence of China’s strong reaction to the United States’ sanctions on ZTE here: Gregory C. Allen, “China’s New Strategy for Waging the Microchip Tech War,” CSIS, May 3, 2023, https://www.csis.org/analysis/chinas-new-strategy-waging-microchip-tech-war.
[17]. “China is Quietly Reducing Its Reliance on Foreign Chip Technology,” The Economist, February 13, 2024, https://www.economist.com/business/2024/02/13/china-is-quietly-reducing-its-reliance-on-foreign-chip-technology.
[18]. Mackenzie Hawkins et al., “Global Chips Battle Intensifies with $81 Billion Subsidy Surge,” Bloomberg News, May 12, 2024, https://www.bloomberg.com/news/features/2024-05-12/chip-technology-spending-gets-81-billion-boost-in-china-rivalry.
[19]. See more nuance on the translation of the Chinese Semiconductor Industry Association’s press release following the March 2023 news of potential trilateral export controls (between Japan, United States, and the Netherlands) against China in my analysis here: Emily Jin, “China’s Chip Industry Dismayed by Multilateral Export Controls: Creative Translation by China’s SIA in Their Press Release Responding to the US/JP/NL Export Controls Reveals All,” ChinaTalk, March 13, 2023, https://www.chinatalk.media/p/chinas-chip-industry-dismays-at-multilateral.
[20]. The government of the Netherlands announced export restrictions on advanced immersion DUV systems to China on March 8, 2023, and the government of Japan added new chip equipment export rules to its export control list on July 23, 2023. Read more on both here: “Statement Regarding Additional Export Controls,” ASML, March 8, 2023, https://www.asml.com/en/news/press-releases/2023/statement-regarding-additional-export-controls; Riho Nagao, “Japan’s New Chip Equipment Export Rules Take Effect Sunday,” Nikkei Asia, July 23, 2023, https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-s-new-chip-equipment-export-rules-take-effect-Sunday.
[21]. Jin, “China’s Chip Industry Dismayed by Multilateral Export Controls…”.
[22]. Center for Strategic Translation, the full sentence for reference: “Independent innovation should be conducted in an open environment and must not be carried out behind closed doors. The greater the blockades and suppression we face, the less we can afford to close ourselves off. We must more proactively integrate into the global innovation network and improve our own scientific and technological innovation capabilities through open cooperation.” [自主创新是开放环境下的创新，绝不能关起门来搞。越是面临封锁打压，越不能搞自我封闭、自我隔绝。要更加主动地融入全球创新网络，在开放合作中提升自身科技创新能力。] See more at Office of the Central National Security Commission and Central Propaganda Department, “Chapter Six: Uphold the Predominant Position of Political Security.” Translated by Emily Jin. San Francisco: Center for Strategic Translation, 2025, https://www.strategictranslation.org/articles/safeguard-technological-security, and originally published in Office of the Central National Security Commission and Central Propaganda Department, Zongti Guojia Anquan Guan Xuexi Gangyao: 总体国家安全学习纲要 [The Total National Security Paradigm: A Study Guide], (Beijing: Xuexi Chuban She, Beijing: April 2022).
[23]. Allen, “China’s New Strategy for Waging the Microchip Tech War.”.
[24]. Stephen Ezell, “How Innovative is China in Semiconductors?” (ITIF, August 19, 2024), https://itif.org/publications/2024/08/19/how-innovative-is-china-in-semiconductors/.
[25]. Cagan Koc and Jenny Leonard, “ASML’s China Chip Business Faces New Curbs from Netherlands,” Bloomberg, August 29, 2024, https://www.bloomberg.com/news/articles/2024-08-29/the-netherlands-to-put-more-curbs-on-asml-s-china-chip-business; Toby Sterling, “ASML Needs Licence to Service Some Equipment in China, Dutch Government Says,” Reuters, September 10, 2024, https://www.reuters.com/technology/asml-needs-licence-service-some-equipment-china-dutch-government-says-2024-09-10/; “Statement Regarding Dutch Government’s Updated Export License Requirement,” ASML, September 6, 2024, https://www.asml.com/en/news/press-releases/2024/dutch-governments-updated-export-license-requirement.
[26]. “China Realizes Domestic DUV Lithography Machine Can Produce 8-Nanometer and Below Wafers (中國實現國產DUV曝光機 可生產8奈米及以下晶片)” Central News Agency, September 14, 2024, https://www.cna.com.tw/news/ait/202409140249.aspx; “[News] Updated: Rumored China’s DUV Breakthrough – Now Capable of Producing 8-Nanometer Chips,” TrendForce, September 16, 2024, https://www.trendforce.com/news/2024/09/16/news-chinas-duv-breakthrough-capable-of-producing-8-nanometer-chips/; Fan Feifei, “Breakthroughs will Help Bolster Tech Self-Reliance,” China Daily, September 17, 2024, https://www.chinadaily.com.cn/a/202409/17/WS66e8bbcca3103711928a835d.html.
[27]. Xinmei Shen, “Chip War: China Claims Breakthrough in Silicon Photonics that Could Clear Technical Hurdle,” South China Morning Post, October 6, 2024, https://www.scmp.com/tech/tech-war/article/3281156/chip-war-china-claims-breakthrough-silicon-photonics-could-clear-technical-hurdle; “[News] Major Breakthroughs in China’s Storage and Silicon Photonics Chip Technologies,” TrendForce, October 10, 2024, https://www.trendforce.com/news/2024/10/10/news-major-breakthroughs-in-chinas-storage-and-silicon-photonics-chip-technologies/.
[28]. Rebecca Fannin, “In Tech Rivalry with the US, China is Behind on a Key Asset: Its Own OpenAI,” CNBC, March 31, 2024, https://www.cnbc.com/2024/03/31/in-ai-race-with-us-china-is-behind-on-a-key-weapon-its-own-openai.html; Hodan Omaar, “How Innovative is China in AI?” (ITIF, August 26, 2024), https://itif.org/publications/2024/08/26/how-innovative-is-china-in-ai/.
[29]. “Full Text: Report on the Work of the Government,” English.gov.cn, March 13, 2024, https://english.www.gov.cn/news/202403/13/content_WS65f0dfccc6d0868f4e8e5079.html.
[30]. Omaar, “How Innovative is China in AI?”
[31]. Fannin, “In Tech Rivalry with the US, China is Behind on a Key Asset: Its Own OpenAI”; Omaar, “How Innovative is China in AI?”
[32]. Jack Dutton, “Saudi Tech Giant Expands Investments into China, AI as Part of $100B Plans,” al-monitor.com, February 20, 2024, https://www.al-monitor.com/originals/2024/02/saudi-tech-giant-expands-investments-china-ai-part-100b-plans; “Chinese AI Firm SenseTime to Work With Saudi Arabian Companies on Smart City, Digital Tourism,” Belt and Road Portal, February 10, 2023, https://eng.yidaiyilu.gov.cn/p/306405.html; Mohammed Al-Sudairi, Steven Jiawei Hai, and Kameal Alahmad, “How Saudi Arabia Bent China to Its Technoscientific Ambitions,” Carnegie Europe, August 1, 2023, https://carnegieendowment.org/research/2023/08/how-saudi-arabia-bent-china-to-its-technoscientific-ambitions?lang=en¢er=europe; Dean W. Bell, “What DeepSeek r1 Means—and What It Doesn’t,” Lawfare, January 28, 2025, https://www.lawfaremedia.org/article/what-deepseek-r1-means-and-what-it-doesn-t.
[33]. Jeffrey Ding, “ChinAI #261: First Results from CAICT’s AI Safety Benchmark,” Substack, ChinAI Newsletter, April 14, 2024, https://chinai.substack.com/p/chinai-261-first-results-from-caicts; DeepSeek claims that it only spent $5.5 million to train DeepSeek’s V3 (the foundation of the R1 model), which is a fraction of development costs of other existing models; see more at Kyle Wiggers, “DeepSeek’s New AI Model Appears to be One of the Best ‘Open’ Challengers Yet,” TechCrunch, December 26, 2024, https://techcrunch.com/2024/12/26/deepseeks-new-ai-model-appears-to-be-one-of-the-best-open-challengers-yet/; In comparison, the technical creation cost of OpenAI’s ChatGPT-4 model was between $41 million and $78 million according to Epoch AI, a California-based AI research firm, and OpenAI CEO Sam Altman has said the model cost $100 million; see more at: Katharina Buchholz, “The Extreme Cost of Training AI Models,” Forbes, August 26, 2024, https://www.forbes.com/sites/katharinabuchholz/2024/08/23/the-extreme-cost-of-training-ai-models/.
[34]. Ministry of Civil Affairs of the People’s Republic of China, “Overall National Security Concept Learning Outline” published and distributed [《总体国家安全观学习纲要》出版发行],” mca.gov.cn, April 15, 2022, https://www.mca.gov.cn/zt/n1095/n1100/c1662004999979987889/content.html; See more on “Total National Security Paradigm” here: “Glossary: Total National Security Paradigm [总体国家安全观],” The Center for Strategic Translation, https://www.strategictranslation.org/glossary/total-national-security-paradigm.
[35]. U.S.-China Economic and Security Review Commission, 2023 Annual Report, “Chapter 3: Potential Risks to China’s Future Economic Competitiveness, Section 1: China Educating and Training Its Next Generation Workforce,” 281, https://www.uscc.gov/sites/default/files/2023-11/Chapter_3_Section_1--China_Educating_and_Training_Its_Next_Generation_Workforce.pdf.
[36]. U.S.-China Economic and Security Review Commission, 2023 Annual Report, “Chapter 3: Potential Risks to China’s Future Economic Competitiveness, Section 1: China Educating and Training Its Next Generation Workforce,” 283.
[37]. “Number of Employed People in China from 2013 to 2023,” Statista, released February 2024, https://www.statista.com/statistics/251380/number-of-employed-persons-in-china/.
[38]. “Number of full-time employees in the United States from 1990 to 2023,” Statista, released February 2024, https://www.statista.com/statistics/192356/number-of-full-time-employees-in-the-usa-since-1990/.
[39]. U.S.-China Economic and Security Review Commission, 2023 Annual Report, “Chapter 3: Potential Risks to China’s Future Economic Competitiveness, Section 1: China Educating and Training Its Next Generation Workforce,” 293.
[40]. Boland et al., “How China’s Human Capital Impacts Its National Competitiveness.”
[41]. Shumei Xiao, Jun Sheng, and Guangtao Zhang, “Rising Tides of Knowledge: Exploring China’s Higher Education Landscape and Human Capital Growth,” Journal of the Knowledge Economy, June 18, 2024, https://link.springer.com/article/10.1007/s13132-024-02102-9; Eduardo Jaramillo, “China’s Hukou Reform in 2022: Do They Mean It This Time?” CSIS, April 20, 2022, https://www.csis.org/blogs/new-perspectives-asia/chinas-hukou-reform-2022-do-they-mean-it-time-0; There has been an adjustment in the youth unemployment rate calculation to exclude university students, which was an alleged 15.7% in December 2024; see more at “Monthly surveyed urban unemployment rate of people aged 16 to 24 in China from December 2021 to December 2024,” Statista, January 20, 2025, https://www.statista.com/statistics/1244339/surveyed-monthly-youth-unemployment-rate-in-china/.
[42]. “China Youth Unemployment Rate,” accessed October 9, 2024, https://tradingeconomics.com/china/youth-unemployment-rate; Lee Ying Shen, “China’s Youth Unemployment Hits Fresh High Amid Economic Slowdown and Restrictive Hiring Policies,” CNBC, September 23, 2024, https://www.cnbc.com/2024/09/23/chinas-youth-unemployment-hits-fresh-high-in-august-as-economy-slows.html.
[43]. Laurie Chen, “New Unproductive Forces: The Chinese Youth Owning Their Unemployment,” Reuters, September 1, 2024, https://www.reuters.com/world/china/new-unproductive-forces-chinese-youth-owning-their-unemployment-2024-09-01/.
[44]. Amy Hawkins, “China Graduates Unconvinced by Calls to Toil in Countryside,” The Guardian, July 29, 2023, https://www.theguardian.com/world/2023/jul/29/chinas-graduates-unconvinced-by-calls-to-toil-in-countryside.
[45]. State-owned Assets Supervision and Administration Commission of the State Council (SASAC), February 2, 2024, http://www.sasac.gov.cn/n4470048/n29955503/n29955510/n29955537/n29972807/c29955919/content.html: “Strengthen the Leading Role of Enterprises in Scientific and Technological Innovation and Give Full Play to the Role of Central Enterprises as National Strategic Scientific and Technological Forces [强化企业科技创新主体地位 充分发挥中央企业国家战略科技力量作用],” “However, challenges remain, including a shortage of high-end techno-scientific talent, insufficient reserves in basic research, and an uneven distribution of expertise across disciplines. We must firmly embrace the notion that talent is the most valuable resource, fully leverage the expertise of academicians, and accelerate the development of a group of top-tier experts who can lead in high-tech fields with global influence. We need to intensify support for cultivating skilled and young talent, with a focus on building a well-structured, high-quality, and adequately scaled innovative talent pool. This will foster a continuous pipeline of emerging experts, creating a dynamic environment where talent flourishes and ensuring that talent-driven development leads technological innovation [但是，仍然存在高端科技人才欠缺，基础研究人才储备不足，人才专业分布相对不均等问题。必须牢固树立人才是第一资源的理念，充分发挥院士作用，加快培养一批在高精尖领域能够“一锤定音”、具有国际影响力的“大专家”，加大技能人才和青年人才培养支持力度，着力建设一支规模充足、结构合理、素质优良的创新人才队伍，形成青蓝相接、人才辈出的良好局面，以人才优先发展引领科技创新驱动。].”
[46]. Ahuja Ashvin and Malhar Nabar, “Chapter 7. Investment-Led Growth in China: Global Spillovers,” IMF eLibrary, November 7, 2013, https://www.elibrary.imf.org/display/book/9781484303931/ch008.xml.
[47]. Loren Brandt et al., “China’s Productivity Slowdown and Future Growth Potential,” Policy Research Working Paper 9298, World Bank Group, June 2020, https://documents1.worldbank.org/curated/en/839401593007627879/pdf/Chinas-Productivity-Slowdown-and-Future-Growth-Potential.pdf; Chinese SOEs have 30 percent lower total factor productivity revenue than private firms do in the same sector, measured between 2002 to 2019. See more in this study: Emilia M. Jurzyk and Cian Ruane, “Resource Misallocation Among Listed Firms in China: The Evolving Role of State-Owned Enterprises,” IMF eLibrary, March 12, 2021, https://www.elibrary.imf.org/view/journals/001/2021/075/article-A001-en.xml; More recent IMF estimates suggest that the difference is more like 20 percent, “People’s Republic of China: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the People’s Republic of China,” IMF, February 3, 2023, https://www.imf.org/en/Publications/CR/Issues/2023/02/02/Peoples-Republic-of-China-2022-Article-IV-Consultation-Press-Release-Staff-Report-and-529067.
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[57]. Ezell, “How Innovative is China in Semiconductors?”.
[58]. This is an old phrase in the CCP lexicon, but Xi Jinping discussed great changes unseen in a century in the context of CCP’s opportunity to seize techno-scientific progress on October 17, 2020, at the 24th collective study session of the Political Bureau of the CPC Central Committee, read more at http://www.xinhuanet.com/politics/2020-10/17/c_1126623288.htm.
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[61]. Kevin Rudd, “The World According to Xi Jinping: What China’s Ideologue in Chief Really Believes,” Foreign Affairs, October 10, 2022, https://www.foreignaffairs.com/china/world-according-xi-jinping-china-ideologue-kevin-rudd?check_logged_in=1.
[62]. Jimmy Goodrich, “China’s Evolving Fortress Economy,” UC Institute on Global Conflict and Cooperation, Working Paper No. 5, July 2024, https://ucigcc.org/wp-content/uploads/2024/07/2024_wp5_goodrich_v1-FINAL-2.pdf.
[63]. “Since the 18th National Congress of the Communist Party of China, our nation’s techno-scientific undertakings have culminated in historic achievements and undergone a historic transformation. Major achievements in innovation have emerged one after another. In some cutting-edge fields, we are beginning to catch up. In some other cases, we are leading as pioneers. Our techno-scientific strength is moving from [a stage of] quantitative accumulation to a [stage of] qualitative leaps. We transition from isolated breakthroughs to a systemic elevation in our capabilities. [党的十八大以来，我国科技事业取得历史性成就、发生历史性变革。重大创新成果竞相涌现，一些前沿领域开 始进入并跑、领跑阶段，科技实力正在从量的积累迈向质的飞跃，从点的突破迈向系统能力提升。]” See more: “Xi Jinping Presided Over a Symposium of Scientists and Delivered an Important Speech [习近平主持召开科学家座谈会并发表重要讲话],” September 11, 2020, https://www.gov.cn/xinwen/2020-09/11/content_5542851.htm.
