Chinese Xi promises nationalized science and hi-tech industry despite chip ban — Radio Free Asia

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As the United States imposes new bans on the export of high-tech software and chips to China, the leader of the ruling Chinese Communist Party (CCP) Xi Jinping has unveiled plans to focus resources on local high-tech products and processes.

Nvidia said Sept. 2 that the U.S. government banned it from exporting its A100 and H100 graphics processing unit chips to China and Russia, while its DGX AI server was also banned from shipping to China with chips on board.

There have also been reports of a US ban on exports of AMD’s MI250 Accelerator AI chip to China.

Currently, high-end Chinese chips can only compete with those made by Nvidia, AMD and Taiwan Semiconductor in a few areas, and the bans are expected to deal a heavy blow to the country’s AI sector.

Xi Jinping on Sept. 6 announced a framework of measures to enable China to “achieve breakthroughs in core technologies and establish competitive advantages and take the strategic lead in several important areas,” the authorities reported. state media.

Xi said at the 27th meeting of the Central Commission for Deepening Comprehensive Reform that the CPC and the government will strengthen science and technology innovation leadership, allocating resources nationwide to meet the research and development needs.

The plan envisions the national management of existing resources to achieve “economic and social development in all fields”, according to the official Xinhua news agency.

News commentator Wang Qingyang said Xi’s proposed reforms seem to herald a return to a top-down planned economy, and a radical reversal of the economic reforms and opening-up initiated by the late supreme leader. Deng Xiaoping.

“The nationalization of science and technology is already underway,” Wang told RFA. “For example, there is an annual catalog of official national grants for major science and technology projects.”

“In the past, they distributed funds to certain companies, but now everything is under unified state control,” he said.

According to Wang, nationalization means that “national interests” take precedence over everything else, following a pattern similar to the state-sponsored recruitment and training of elite athletes.

“Imports of high-tech raw materials have all but stopped under foreign sanctions, so they need to nationalize this system,” Wang said. “The greatest precedent for this was the smelting of iron and steel during the Great Leap Forward (1958-1960).

Political analyst Xia Liang noted that Xinhua News Agency’s report on the decision mentioned “reform” seven times, but never once referred to “openness”, suggesting that part of Deng’s policy is being abandoned.

“He is taking the initiative to dissociate himself from the whole Western science and technology community,” Xia said. “[This means that] over the next two to three years, all foreign software will be replaced by local Chinese software and hardware. »

“Although these household products are not so user-friendly, it will not matter, because they make sense for [Xi]whose primary concern is security,” he said.

“His view of security is about regime stability,” Xia said. “It prepares the public for the next step, which is active decoupling from the West.”

An employee manufactures chips at a factory belonging to Jiejie Semiconductor Company in Nantong, east China’s Jiangsu province, March 17, 2021. Credit: AFP

Two-way process

The process appears to be a two-way street, as the passage of the CHIPS Act in the United States in July 2022 will strengthen domestic semiconductor manufacturing, design and research, strengthen the economy and national security, and strengthen the chains supply of chips for American companies. .

Recent takeover bids by Chinese companies to acquire stakes in companies holding certain assets are also raising national security concerns.

Kwasi Kwarteng, then UK Secretary of State for Business, Energy and Industrial Strategy, last month halted plans to acquire Bristol-based Pulsic by Super Orange HK Holding Ltd because its electronic design automation [EDA] the products “could be used in a civilian or military supply chain”.

In July, Kwarteng placed a similar order for the potential acquisition of intellectual property developed by the University of Manchester by Beijing Infinite Vision Technology Co, which wanted to purchase SCAMP-5 and SCAMP-7 vision detection technology.

China says it does not provide military assistance to Russia, but Chinese customs data showed an increase in exports of raw materials for military use to Russia.

In the first five months of 2022, Chinese chip shipments to Russia more than doubled from a year earlier to $50 million, while exports of components like circuit boards also saw growth. as a two-digit percentage.

China also exported 400 times more alumina – an important raw material for weapons production and the aerospace industry – to Russia compared to the same period in 2021.

Translated and edited by Luisetta Mudie.

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