China’s technology policy can be described as state-guided, with the government balancing between allowing free innovation and directing resources towards strategic sectors. This model has produced world-leading technologies, as seen in China’s leadership in electric vehicles, battery technologies, and the number of patents in artificial intelligence (AI).
Since the so-called tech crackdown of the early 2020s, political control over economic issues and research has increased. In strategic sectors, the government has sought to support companies and promote innovation, while the role of private firms has also grown in driving R&D and technological advancement.
China pursues a military-civil fusion (MCF) strategy aimed at developing science and technology innovations through collaboration with the military and civil sectors. While this strategy took a more decisive turn in 2017, its overall success has been limited.
In the short term, US export controls on advanced AI chips may hinder China’s AI development, but could push it towards greater self-reliance in the long term. China’s export controls on certain rare earth elements and strategic minerals serve as a countermeasure against US policies and have implications for European security.
