China targets AI, chips among seven battlefronts in tech race with US

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SINGAPORE – China has raised the stakes in its tech race with the United States as leaders drew up plans to accelerate the development of advanced technologies ranging from chips to artificial intelligence and quantum computing over five years.

In a draft economic plan unveiled at the country’s annual legislative meeting, officials said they would increase spending on research and development by more than 7% per year over the five years to the end of 2025. This will represent a higher percentage of gross domestic product than during the previous five-year period.

Chinese Premier Li Keqiang said in a speech on Friday that China will review regulations and policies to support the flow of venture capital into startups, free up bank loans, and expand tax incentives to encourage research and development.

Economists and industry analysts say China’s 14th Five-Year Plan stands out for its focus on advanced technologies and innovation. It also included China’s vision for 2035, when the country expects to make “significant advances in basic technologies and seeks to be among the most innovative countries in the world.”

Chinese leaders are pushing to compete with the United States in advanced technology and in developing an independent supply chain to wean companies off their dependence on American suppliers. The initiatives follow a few murderous years in which the Trump administration imposed restrictions on Chinese companies such as Huawei Technologies Co. that cut off access to certain critical components.

Creating world-class domestic chipmakers has become urgent for China amid U.S. restrictions on Semiconductor Manufacturing International Corp.


Photo:

alex plavevski / EPA / Shutterstock

The Biden administration is conduct a broad review of U.S. policy on Chinese technology and seek to enlist allies to stay ahead of the game Chinese advances.

There is pressure to do more. Senate Majority Leader Chuck Schumer (D., NY) has called on U.S. lawmakers to draft a bill to counter China’s rise to power, based on an earlier proposal to spend $ 100 billion dollars over five years to fund basic research in areas such as artificial intelligence. advanced performance calculation and manufacturing.

“The two countries are fighting to develop the same technological strengths,” said Tommy Xie, an economist at OCBC Bank based in Singapore.

Li pledged Friday to increase China’s central government spending on basic research by 10.6% this year and to formulate a decadelong action plan. Basic research – the field of scientific research that leads to new breakthroughs in knowledge and is seen as the key to technological advancement – is an area in which China has traditionally lagged behind the United States.

The five-year plan lists seven strategic areas considered essential to “national security and overall development”. These include AI, quantum computing, integrated circuits, genetic and biotechnology research, neuroscience, and aerospace. China plans to establish national laboratories and strengthen university programs to incubate and strengthen some of these technologies, the report said. Vaccines, deep sea exploration and voice recognition are also development targets.


“The cutting edge of AI and computing allows China to reap huge advantages in hybrid warfare and intelligence gathering.”


– Alex Capri, senior fellow at the National University of Singapore School of Business

“Cutting edge AI and computing allows China to reap huge advantages in hybrid warfare and intelligence gathering,” said Alex Capri, senior researcher at the University’s business school. Singapore National. Other cutting-edge technologies will allow the country to expand its military capabilities in the Indo-Pacific, play a leading role in the militarization of space, digital commerce and commerce, and in working on a ecosystem around digital currency, he added.

China’s role is already increasing. The country recently overtook the United States in terms of the number of citations from journals on artificial intelligence, according to a Stanford University report this month.

China likely had 690,000 5G base stations – boxes that broadcast 5G signals to consumers – in service nationwide by the end of 2020, up from 50,000 in the United States, according to International Business Strategies Inc. , a research company. The last five-year plan sets a goal increase the percentage of 5G users in China to over 50% and lay the foundation for 6G networks.

Yet America eclipses China in terms of basic research and R&D funding. China’s five-year plan predicts that basic research spending will account for 8% of all R&D spending in the years to 2025.

China spent 150 billion yuan ($ 23 billion) on basic research last year, according to People’s Daily last month, citing Ye Yujiang, an official with the Ministry of Science and Technology. In contrast, the United States spent $ 97 billion on basic research in 2018, or about 17% of total U.S. R&D spending, according to a report by the National Science Foundation in 2020.

The technological battle between the United States and China has hit TikTok and Huawei and surprised American companies that produce and sell in China. WSJ explains how Beijing is investing money in high-tech chips as it wants to become self-sufficient. Video / Illustration: George Downs / The Wall Street Journal (Originally published September 3, 2020)

China is also lagging behind the United States in other crucial technologies. The plan reiterates China’s desire to become a strong manufacturing nation to increase its competitiveness in the development of aircraft, robotics and new energy vehicles.

China’s first commercial airliner, the C919 narrow-body aircraft, is still not certified by regulators in the country, even though it was unveiled in 2017.

The plan calls for critical parts of supply chains to remain in the country. The creation of world-class domestic chipmakers has become more urgent for China in the face of US restrictions on the Shanghai base

Semiconductor Manufacturing International Corp.

, what was added to the US Department of Commerce’s blacklist last December on alleged links with the Chinese military.

The authoritarian Chinese government has a huge role in the economy and such plans carry a lot of weight. Local government ministries and public and private enterprises tend to frame their development policies and expansion goals around five-year plans.

Write to Liza Lin at [email protected]

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