Beijing hopes to boost the country’s aggregate computing power by more than 50% by 2025 as it tightens its focus on supercomputing and artificial intelligence innovations. Its aims come amid rising competition between China and the U.S. in high-tech areas ranging from semiconductors and supercomputers to AI, including U.S. export controls on chipmaking equipment.
Chinese authorities believe they have already closed the gap in AI R&D with the United States, which currently holds a dominant global position. The government and industry are focused on closing the gap in commercial applications, where they see the most significant potential for rapid gains, as they aim to overtake the United States to become the world’s most powerful tech power.
To help achieve its goal, China plans to accelerate the pace of building data centers nationwide to support its burgeoning cloud computing sector. Increasing the speed of its national computer network is another priority, with a target to ensure transmission speeds between critical computing facilities do not allow latency times exceeding five milliseconds.
Those efforts will require significant government funding. The government has been investing in private firms, particularly those in the digital economy, as it seeks to create an innovation engine less dependent on a fast-growing consumer market prone to volatile investment cycles.
But those moves have sparked concerns from the United States, which accuses China of stealing technology, hiring fugitive scientists, and engaging in various unfair practices to gain a technological edge. Officials also warn that China may eventually be able to develop technology that blurs the lines between civilian and military applications, a potential threat that could jeopardize U.S. national security.
Analysts expect that China will continue to impose tighter restrictions on its internet companies to ensure that they are using the data collected by their apps to promote the national interest. The same could be true for its financial institutions, telecommunications operators, and energy firms.
In its push to dominate the digital economy, China has built up an enormous database of billions of users, giving it a competitive advantage in many areas of the economy and helping fuel growth at firms like Baidu, Alibaba, and Tencent, the world’s largest internet platforms. The data has allowed the three to offer various products, from e-commerce and social networking to ride-hailing services and online streaming.
But the massive scale of that data has posed ethical challenges for the companies, especially in protecting their users’ privacy. Some analysts fear that if the companies can no longer access the data they need to grow their businesses, they might lose their competitive edge in critical markets. The United States must recognize that and ensure its policies do not hinder the free flow of goods, capital, and data across the Pacific. Otherwise, it will miss the opportunity to leverage its digital might against a rapidly growing China.