{"id":75124,"date":"2022-09-14T12:00:36","date_gmt":"2022-09-14T02:00:36","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=75124"},"modified":"2022-09-14T11:53:11","modified_gmt":"2022-09-14T01:53:11","slug":"foreign-collaboration-continues-in-chinas-drive-for-technology-self-reliance","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/foreign-collaboration-continues-in-chinas-drive-for-technology-self-reliance\/","title":{"rendered":"Foreign collaboration continues in China\u2019s drive for technology self-reliance"},"content":{"rendered":"
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For decades, China\u2019s government has been tapping into foreign inputs and knowledge to close gaps in its national innovation system. As the political project of breaking China\u2019s foreign technology dependencies becomes more important for Beijing, so too does the need for policymakers in Europe and elsewhere to understand and assess these connections.<\/p>\n

For China\u2019s ambition of industrial self-sufficiency in chip production, photoresists are a major headache. These light-sensitive materials are essential for the global semiconductor industry. In lithography\u2014the process by which information contained in a design is encoded into patterns of a wafer\u2014circuit features form after wafers are coated in photoresists. A handful of Japanese companies control<\/a> 90% of the global market for these materials, making Chinese companies highly reliant on imports.<\/p>\n

As John Lee and Jan-Peter Kleinhans write<\/a>, photoresist development is prioritised in Chinese central and local governments\u2019 industrial policy plans. National funding for research and development has helped some companies make some inroads at the lower ends of the value chain. But getting closer to the cutting edge within the next five to 10 years is an unlikely prospect.<\/p>\n

In December, Shanghai Sinyang Semiconductor Materials signed a memorandum of understanding with Heraeus Group, a German company that makes ultra-pure specialty chemicals required for photoresist production. Heraeus will provide material and technical support to the Chinese partner\u2019s development of photoresists. Beyond photoresists, Heraeus\u2019s Shanghai innovation centre aims<\/a> to \u2018introduce world-leading technologies to lay a solid foundation for local production\u2019 of third-generation semiconductors.<\/p>\n

This is just one example of how partnering with a foreign company can provide the Chinese industry with helpful products and know-how as it marches towards indigenisation in strategic sectors earmarked by government policy.<\/p>\n

Like other domestic players, Shanghai Sinyang is striving to \u2018break the foreign monopoly of integrated-circuit high-end photoresists\u2019, a Chinese securities media outlet reported<\/a>. In the first quarter of 2021, the publicly listed company invested<\/a> 14.56% of its revenue in R&D. Its self-developed KrF (248-nanometre) thick-film photoresist has already won its first order, and the company expects to commercialise the ArF photoresist needed to produce smaller chips in 2023.<\/p>\n

In another case, German manufacturing and technology giant Siemens has been training<\/a> China United Heavy-Duty Gas Turbine Company (UGTC) to develop and produce heavy-duty gas turbines. A subsidiary of the state-owned State Power Investment Corporation, UGTC can tap into Siemens\u2019 technical experience in design, engineering and testing \u2018in support of China\u2019s goal to independently develop and build an own heavy-duty gas turbine\u2019, according to the first MoU<\/a> signed in 2018. The State Power Investment Corporation is the implementing unit<\/a> of a dedicated national science and technology funding megaproject.<\/p>\n

Because they are extremely hard to make, heavy-duty gas turbines are among China\u2019s 35 strategic import dependencies described in a series of articles published by a newspaper run by the Ministry of Science and Technology, translated and analysed<\/a> by the Center for Security and Emerging Technology. These \u2018chokepoints\u2019 are a major preoccupation for a Chinese leadership increasingly worried about export restrictions from the US and its allies.<\/p>\n

The two cases have important differences\u2014supplying inputs upstream is distinct from training a company to reproduce a technology, and power generation doesn\u2019t have quite the same national-security implications as chip fabrication.<\/p>\n

However, both illustrate the complex interplay between foreign inputs and R&D collaboration and their role in building up indigenous capabilities. The process is nudged along by government industrial policy in China\u2019s larger technology innovation strategy. This is especially true in strategic sectors in which \u2018key and core technologies are controlled by others\u2019, as Chinese President Xi Jinping often laments<\/a>. Each of these ingredients is critical in achieving the political goal of technology self-reliance.<\/p>\n

For foreign companies across many industries, China is a key market. In Siemens\u2019 case, China is a market of last resort as gas turbines are being replaced<\/a> by renewable power generation. Market access is one reason European companies have been deepening their ties with China\u2019s innovation system, disproving<\/a> simplistic narratives about \u2018decoupling\u2019 between China and the West. Another reason is the attractiveness<\/a> of the country\u2019s local innovation hubs, especially in emerging technology fields like artificial intelligence.<\/p>\n

Despite the clear advantages for China\u2019s research partners, whether multinationals or research institutions, it is particularly in emerging technology areas that the costs and benefits of supporting China\u2019s state-led tech indigenisation efforts are becoming both more difficult and more urgent to assess.<\/p>\n

Among the results showcased<\/a> at the 2019 Sino-German Technology and Innovation Cooperation Conference was a joint research endeavour in AI and brain science, led by the Technische Universit\u00e4t (TU) Berlin and Northwestern Polytechnical University (NPU). Researchers made a technological achievement in the application of brain\u2013computer interfaces to drone swarming and flight control.<\/p>\n

NPU, one of the \u2018Seven Sons of National Defense\u2019, is subordinate to the Ministry of Industry and Information Technology and engages in classified military research<\/a>. The US Industry and Security Bureau has been mulling<\/a> export controls on brain\u2013computer interface technology. However, Chinese AI\u2013brain research is already progressing rapidly<\/a>, also thanks to long-term government planning and investment<\/a>.<\/p>\n

It\u2019s impossible to know the full extent to which the partnership with Professor Klaus Obermayer of TU Berlin, launched in 2002, might have contributed to the People\u2019s Liberation Army\u2019s advances in military applications of AI\u2013brain technologies. The accomplishments NPU lists are certainly remarkable:<\/p>\n

\u2026 signed eight international cooperation agreements; jointly established the Shaanxi Provincial International Joint Research Center for Brain\u2013Computer Integration and Its Unmanned System Applications and the Sino-German Joint Laboratory of Neuroinformatics of Northwestern Polytechnical University; completed more than 20 scientific research projects; and undertook postgraduate teaching tasks and joint training; \u2026 published more than 60 papers, was granted or filed over 20 Chinese patents, won 16 awards, and trained more than 200 graduate students.<\/p><\/blockquote>\n

Although the Shaanxi provincial government\u2019s website says<\/a> that research conducted in the two joint facilities mentioned above is aimed at applications like healthcare and disaster relief, it bears remembering that NPU supplies drones to the Chinese military and hosts a dedicated defence lab.<\/p>\n

I\u2019m not suggesting that European stakeholders should halt their research and innovation cooperation with Chinese partners across the board. In an era of globalised value chains, policymakers should be extremely selective when considering restrictions on cross-border technology flows: overly broad controls can damage innovation, scientific progress and Europe\u2019s industrial competitiveness. That China is catching up in soon-to-be legacy technologies like gas turbines is hardly a threat to European economic interests. Besides, foreign inputs are only one ingredient of China\u2019s indigenous innovation strategy: domestic entrepreneurship and industrial policy matter greatly.<\/p>\n

However, the role of foreign R&D collaboration in supporting China\u2019s self-reliance drive warrants much closer scrutiny in countries like Germany whose long-term competitiveness could be at stake. That\u2019s not to mention national security, which partnerships like that between TU Berlin and NWPU clearly endanger.<\/p>\n","protected":false},"excerpt":{"rendered":"

For decades, China\u2019s government has been tapping into foreign inputs and knowledge to close gaps in its national innovation system. 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