China Calls For Winning The Tech Battle

In the coming period, China will probably intervene in the development of the technology industry with significantly more government funds. Head of state Xi Jinping called for “winning the battle” at the Communist Party congress.

According to this, China should become a leading force in core technologies. Since this represents a direction for government activities in the coming years, increasing subsidies and interventions can be expected accordingly. China has been following the fundamental development for some time now, and the now intensified pace is also likely to be a reaction to the West’s increasing efforts to become more independent of Chinese production facilities.

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The state leadership’s statement of accounts highlighted the achievement of independence in four technological areas – five years ago there was none here. However, they did not go into more detail about specific sectors or a comparison to other countries, as the Reuters news agency reported.

However, industries in which China has achieved particular breakthroughs over the past five years were separately mentioned: large aircraft, space travel, and satellite navigation were mentioned by Xi. However, these are particularly dependent on government orders and support services and do not represent independent sectors that can keep up well with international competition.

This is exactly what the chip industry is supposed to do, in the development of which the state has already invested large sums – this applies to other companies such as Semiconductor Manufacturing International Corp. (SMIC) or Yangtze Memory Technologies. However, none of these companies has achieved a leading international role. And fundamentally, China continues to be massively dependent on foreign technologies, which affects both process technology and the architectures of various processor classes.

The severe setbacks that had to be posted in the semiconductor sector were not mentioned. In the context of the last party congress in 2017, the state invested large sums in Wuhan Hongxin Semiconductor Manufacturing. The chip factory should process 30,000 wafers per month. However, it was closed in 2021 because the plant never managed to work economically.