China’s Techno-Industrial Development: A Case Study of the Semiconductor Industry

CIGI Paper No. 252

May 3, 2021

This paper reviews the strategies and plans, policy-making institutions, process and problems in China’s techno-industrial development. Although it has made noticeable progress in some areas in the past two decades, China still lags behind in most core technology and advanced manufacturing fields, such as high-end chips. There have been several real breakthroughs in the semiconductor sector by private companies such as HiSilicon and rapid advancement in frontier technologies — artificial intelligence, fifth-generation wireless communication network technology, big data, blockchain and the Internet of Things — by private companies such as Huawei, Tencent, Alibaba and Baidu; however, state-sponsored technological innovation and breakthroughs have been crippled by the existing problems in China’s science and technology research system and a campaign-style catch-up strategy that rewards bureaucrats on short-term goals, as well as by weak links between academic research and industry and a swing between the market-oriented approach for technology acquisitions and indigenous innovation for technology breakthroughs. A case study of China’s semiconductor industry demonstrates both the problems and progress in China’s techno-industrial development, as well as the implications for the country's prospects of evolving into a technological powerhouse.

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CIGI Papers present in-depth analysis and discussion on governance-related subjects. They include policy papers that present CIGI experts' positions or contributions to policy debates, and background papers that contain research findings, insights and data that contribute to the development of policy positions.

About the Author

Xingqiang (Alex) He is a CIGI research fellow. Alex is an expert on China and global economic governance, the Group of Twenty, domestic politics in China and their role in China’s foreign economic policy making, and Canada-China economic relations.