At a glance: China’s top leaders launched a renewed push to drive forward indigenous innovation, delivering major speeches to scientists and corporate audiences across the country:
In addition, the head of the Chinese Academy of Sciences, Bai Chunli, said during a State Council press conference that over the next decade the academy would conduct targeted R&D on key technologies where China relies on US imports.
MERICS comment: The intensification of Beijing’s focus on tech breakthroughs comes amid increased US measures to cut off Chinese tech companies from US suppliers. The speeches were accompanied by new policy documents, adding credibility to the high-level rhetoric. On September 11, several ministries issued new guiding opinions on expanding investment in eight strategic emerging industries (SEIs), including 5G, new energy vehicles and biotech. The concept of SEIs is not new - it was first codified in a State Council document in 2010 and reinforced through the 13th Five-Year Plan for SEIs. Yet the document’s detailed list of tech prioritized for investment suggest a renewed focus on addressing China’s self-reliance “choke points” that is here to stay. The software and chip industries are major focus areas, as also evident in dedicated policy support announced in August.
Spotlight: Private sector reacts to Beijing’s calls for investment in strategic emerging industries
Private sector investment is key to the government’s goals of advancing breakthroughs in SEIs. Beijing’s policy signaling, along with rallying speeches by China’s leadership, are already translating into private sector action. Stocks in Chinese integrated circuit (IC) firms have skyrocketed
and nearly ten thousand Chinese companies reportedly
changed their business scope to include IC-related business over the past 12 months. Meanwhile, a group of former tech executives from tech giants such as Huawei announced plans
to launch a ‘domestic replacement’ fund by the end of the year that would invest in start-ups specializing in semiconductors, 5G, AI and other crucial technologies. Yet frenzied investments in semiconductor projects have long resulted in
– and will likely continue to lead to – bankruptcies, abandoned projects and great local inefficiencies along the way.