China spent record amounts on research and development last year, The Information reports.
Why It Matters: “As Beijing moves to become more self-sufficient in areas such as chip development, it’s a reflection of China’s goals to build its own tech sphere (independent of the U.S. and other foreign tech leaders).
A Hefty Chunk Of Change: According to data provided by China’s National Bureau of Statistics, research and development in the country rose to 2.44 trillion yuan or the equivalent of $378 billion.
- It’s a more than 10% rise compared to the previous year, which is even more notable considering the Covid-19 pandemic significantly disrupted China’s economy.
Top R&D Spending Categories By Industry (2019):
- Computers, Communication and Other Electronic Equipment: 244.81 Billion Yuan
- Electrical Machinery and Apparatus: 140.62 Billion Yuan
- Automobiles: 128.96 Billion Yuan
- Raw Chemical Materials and Chemical Products: 92.43 Billion Yuan
- Smelting and Pressing Ferrous Metals: 88.63 Billion Yuan
The Takeaway: “China is pushing ahead with ambitious targets to produce everything from semiconductors to 5G chips and is locked in a fierce trade war with the U.S. over critical electronic components.”
This is another step towards a two-power technology world, one centered around Western chips, technologies, and software and one centered around Chinese counterparts. The longer these remain separate, the less interoperability there will be between the two worlds.
If there is a technology “cold war,” the U.S. will need to secure its supply chain from its heavy reliance on China. China will need to continue building its industries to become self-sufficient.
My bias is that the most-inclusive, capitalist, and open-source system usually advances the most in the end.