How China plans to engineer its way out of tech ‘bottlenecks’

For more than four years, Chinese President Xi Jinping has been making speeches and conducting inspection tours across China to deliver an important message: China must become less dependent on key technologies imported from abroad. At a meeting in 2020, Xi implored researchers to work towards breakthroughs in “chokepoint” or “chokepoint” technologies. These are important technological domains that China cannot easily produce domestically. They are often referred to, especially in official Chinese media, as ‘controlled by others’.

After the imposition of export controls on Chinese corporate champions like Huawei and globally coordinated sanctions against Russia after its invasion of Ukraine, China’s leaders are worried. China could be cut off from more imports. Bottleneck technologies make China vulnerable.

At the time of Xi’s 2020 speech, the government was in the process of sifting through China’s vast array of labs, centers, institutes, and companies to assess which ones were doing work that would help the country overcome this increasingly difficult geopolitical environment. unpredictable.

Five years ago, the Chinese government decided to consolidate a group of laboratories and engineering centers that help companies develop new products from research carried out at various research institutions, often universities. These institutions, called the National Engineering Research Centers, or NERCs, have now reorganized to meet the challenge of technological self-sufficiency. Earlier this year, the Chinese government announced a new list of 191 NERCs that were selected from 131 nationwide engineering centers and 217 nationwide engineering laboratories. Nearly half didn’t make the cut.

One center that made the new list is the National Engineering Research Center for Electronic Design Automation. The center is not as well known as the company to which it is attached. Empyrean Technology recently emerged to challenge foreign, primarily American, world leaders on the software needed to design computer chips. The company is backed by a Chinese state-owned company and received funding from the central government intended to transform new technologies into commercial products. If things go according to Empyrean’s plans, by 2025, it will have ‘totally replaced’ foreign manufacturers and by 2030 it will rank alongside Cadence and Synopsys as the global market leader. Whether it will achieve these goals is another story.

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This center and its host company perform work that corresponds to an area that has been identified as a bottleneck elsewhere. In a report published by the Center for Security and Emerging Technology, Ben Murphy summarizes 35 articles published for the first time by the Chinese state newspaper Journal of Science and Technology in 2018 that identify specific sets of technologies as bottleneck technologies. These 35 technologies are often referenced by the heads of Chinese research organizations, Chinese innovation experts, and Chinese industry insiders as a way of explaining how their work is guided.

Hubs like those affiliated with Empyrean are now governed by an updated set of rules that add a special focus on stabilizing supply chains and addressing “bottlenecks.” A new set of pilot guidelines for evaluating NERCs asks center leaders to submit a narrative of 2,000 Chinese characters describing how their work contributes to the development of bottleneck technologies.

Drawing inspiration from research organizations such as the Argonne National Laboratory in the US and the Helmholtz Association in Germany, Chinese leaders published plans in 2017 outlining the need to establish three types of “national science and technology innovation bases” . The categories are ‘scientific and engineering research’; ‘technological innovation and transformation achievements’; and support efforts that provide the conditions for the success of the first two bases.

NERCs belong to the second category: achievement transformation or technology transfer. Key national and state laboratories are intended to focus on the first category. They are expected to conduct investigations of a more fundamental nature ‘aiming at international borders’ with ‘national strategic objectives’ in mind. The National Platform for Scientific and Technological Resources Exchange Services, for example, carries out work in the third category. This includes things like data sharing and storage of experimental materials.

The NERCs are mandated to serve as a ‘bridge between industry development and scientific and technological innovation’. The reorganization of the NERC aims to ‘firmly implement the development strategy driven by innovation, in the service of economic and social development, [and] supporting research and development of key basic technologies’. The innovation-driven development strategy is a flagship policy enacted in 2016 with the aim of strengthening China’s industry through innovation. Evaluating engineering centers based on their contribution to breaking “bottlenecks,” the Chinese government includes supply chain security as a feature of this larger industrial upgrading effort.

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It is in places like NERC that we would expect the development of technologies on their way to market readiness. Earlier this year, Chinese official media reported that the National Engineering Research Center for Application-Specific Integrated Circuit Design and Communication Software had developed a domestic version of a RapidIO interconnect. Interconnects or switch chips play an important role in data transfer in wireless and avionics applications. RapidIO is an open standard architecture from the late 1990s whose development has been dominated by non-Chinese companies such as Texas Instruments and Ericsson. This NERC chip is touted as a challenge to your dominance.

In addition to supporting civilian industrial development, NERCs also play a role in dual-use technologies. in his book Innovate to Dominate: The Rise of the Chinese Technosecurity State, Tai Ming Cheung identifies 11 NERC (from the group before the reorganization in 2021-22) as part of entities linked to China’s military-industrial complex. Several were included in the new sequence. For example, the NERC that developed the RapidIO prototype is hosted by the China Electronics Technology Group Corporation Institute No. 54. This institute is on a US Entity List.

The work of the NERC directly challenges the so-called dependency myth that continues to play out in public debates. This myth says that most Western countries are dependent on China due to Chinese imports of essential inputs and raw materials for manufacturing. However, China is equally aware of its own dependencies, especially in certain high-tech areas. More importantly, China’s leaders are reorganizing parts of its innovation system to alleviate dependencies.

Policymakers, especially in the United States, Europe, and East Asia, need to be aware that these larger systematic efforts are underway and take stock of their dependencies on China, as well as China’s dependencies on them. .

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