China’s Xi vows victory in tech battle after US chip curbs

Bloomberg

Chinese President Xi Jinping pledged his nation will prevail in its fight to develop strategically important tech, underscoring Beijing’s concern over a US campaign to separate it from cutting-edge chip capabilities.
“We will focus on national strategic needs, gather strength to carry out indigenous and leading scientific and technological research, and resolutely win the battle in key core technologies,” Xi said in a speech Sunday at the opening of the ruling Communist Party’s twice-a-decade congress in Beijing.
Xi said the world’s No. 2 economy will speed up innovation in areas that are vital to “technology self-reliance,” adding that “China will move faster to launch a number of major national projects that are of strategic, big-picture and long-term importance.” He didn’t give details on those efforts.
The comments illustrate how China plans to deal with the US placing new restrictions on tech exports that could undercut its ability to develop broad sections of its economy such as semiconductors, supercomputers, surveillance systems and advanced weapons.
Earlier this month, the US Commerce Department unveiled sweeping regulations that limit the sale of semiconductors and chip-making equipment to Chinese customers, striking at the foundation of the country’s efforts to build its own chip industry. The US also added 31 organizations to its unverified list, including Yangtze Memory Technologies Co. and a subsidiary of leading chip equipment maker Naura Technology Group Co., severely limiting their ability to buy hardware from abroad.
Those moves were the Biden administration’s most aggressive yet as it tries to stop China from developing capabilities it sees as threatening. The US is seeking to ensure that Chinese companies don’t transfer technology to the People’s Liberation Army, and that chipmakers in China don’t develop the capability to make advanced semiconductors themselves.
The focus on science was “a reflection on just how much Xi Jinping is betting on innovation as a solution to China’s economic problems and to its reliance on Western technology,” said Neil Thomas, a China analyst at Eurasia Group Ltd., a political risk advisory firm.