Explainer | China’s hi-tech self-sufficiency quest faces 3 barriers – but 1 potential huge pay-off

China wants to develop the world’s most advanced technology on its own as Western countries step up legal blockades aimed at cutting it out of the world technology trade.

Beijing has unveiled a wide range of policies to boost tech self-reliance over the past decade, providing state funding to keep pace with the United States.

The US and its Western allies are blocking Chinese firms from accessing advanced chips, which would choke Beijing’s efforts to develop semiconductor and artificial intelligence (AI). They are also banning Chinese telecoms companies from entering their 5G markets.

But to reach self-sufficiency, China must overcome three big barriers, analysts said, which will lead to one big pay-off if they can.

1. Lack of investment

Curbs on hi-tech investments both within and outside China will probably limit the “kind of information sharing that is crucial to the rapid development of hi-tech manufacturing sectors”, Moody’s Investors Research said in mid-July.