Since 2022, China’s economy has been haunted by a weak recovery. Real gross domestic product (GDP) growth has fallen below 5 per cent for two consecutive quarters this year, posing challenges for Beijing to achieve its annual growth target of around 5 per cent.
The International Monetary Fund estimates that the proportion of China’s nominal GDP in US dollars relative to that of the US will be around 62.6 per cent in 2024.
How can China get out of its current economic dilemma? Domestic technological advancement is usually thought of as a solution. The history of each industrial revolution tells us that technological advancement can raise productivity so it’s imperative for China to move forward in this regard.
As the Chinese economy slows down, the US is tightening tech sanctions. Recently, in an escalation of the tech war, 140 Chinese chip-related entities were added to the Entity List of the US Department of Commerce. Now, at least 1,000 Chinese entities across multiple industries have been added to the Entity List, restricting them from accessing US technologies.
That’s why Beijing is pushing forward its campaign to become self-reliant in core technology, with industrial policies such as Made in China 2025 and the China Integrated Circuit Industry Investment Fund, also known as the “Big Fund”. This is the only way China can mitigate its dependence on foreign technology, decrease its vulnerability to fluctuations in the global market and safeguard economic security.
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