sunny.png
Saturday March 6th, 2021 6:49PM

China leaders vow to create self-reliant 'technology power'

By The Associated Press
Related Articles
  Contact Editor

BEIJING (AP) — China’s leaders vowed Thursday to create a self-reliant “technology power” as a feud with Washington cuts access to U.S. processor chips and other high-tech components, hampering Beijing’s industrial ambitions.

Leaders of the ruling Communist Party made the announcement after a meeting to draft a development blueprint for the state-dominated economy over the next five years.

President Xi Jinping’s government is trying to limit damage from the Trump administration’s curbs on technology sales to China in a fight over security and spying. Those threaten to disrupt plans to create Chinese competitors in telecoms, biotech and other fields, which communist leaders see as a path to prosperity and global influence.

“Science and technology should be self-reliant as a strategic support for national development,” said a party statement. It promised to “accelerate the building of a science and technology power” but gave no details.

Five-Year Plans, issued since the 1950s, form the basis of regulation and industry initiatives in an economy where the ruling party still plays a leading role after four decades of market-style reforms. The full plan is due to be released in March. Changes in regulations and plans for individual industries will be announced after that.

Thursday’s statement promised to promote “green and low-carbon development” and to raise Chinese living standards. It called for unspecified steps to strengthen the 2.3 million-member People’s Liberation Army and to “ improve our strategic ability to defend national sovereignty.”

China faces a “complicated international situation,” it said, but it made no mention of the coronavirus pandemic or its tariff war with Washington.

Technology is a cornerstone of the ruling party’s marathon campaign to promote self-sustaining growth based on domestic consumer spending and to built a “moderately prosperous society."

China's factories assemble most of the world’s smartphones, personal computers and consumer electronics but need U.S., European and Japanese components. Its communist leaders see that as a strategic weakness.

Thursday’s statement cited no specific technologies, but leaders are especially worried about China’s reliance on U.S. providers of processor chips used in smartphones, electric cars and other technologies central to their development plans.

Semiconductors are China’s biggest single import by value, ahead of crude oil.

Companies including telecom equipment giant Huawei Technologies Ltd., China’s first global tech brand, are developing chips and other components. But, like their Western and Asian counterparts, none can supply all its own needs.

President Donald Trump’s 2018 tariff hikes on Chinese goods over complaints Beijing steals or pressures companies to hand over technology have raised pressure for greater self-reliance.

Last year, the White House added to that by tightening controls on Chinese purchases of chips and other components.

“The trade war and growing tensions with foreign governments have heightened concern about reliance on foreign inputs,” Julian Evans-Pritchard and Seana Yue of Capital Economics said in a report ahead of Thursday’s announcement.

“The push for self-sufficiency is increasingly visible,” they wrote.

Last year’s U.S. curbs cut off access to chips and most other technology for Huawei, which American officials say might facilitate Chinese spying, an accusation the company denies. This year, Washington barred global manufacturers from using U.S. technology to produce chips for Huawei, including those designed by its own engineers. Huawei’s revenue rose 9.9% over a year earlier in the quarter ending in September, but executives say sales of smartphones and network equipment are likely to suffer.

In September, the Commerce Department threw an obstacle in front of Beijing’s efforts to develop its fledgling chipmakers by restricting U.S. technology sales to the biggest, Semiconductor Manufacturing International Corp.

Earlier industrial plans include “Made in China 2025,” issued in 2015, which calls for creating global competitors in 10 industries such as electric cars. That triggered an international backlash, as governments complained Beijing might use subsidies and market barriers to promote them, violating its free-trade commitments.

“For sectors that are already under U.S. blockades (such as semiconductors), China is likely to double down and strengthen government support,” said Vincent Zhu of Rhodium Group in a report ahead of the party congress.

However, a “wish list” of favored businesses “could easily be used as a U.S. ‘hit list,’ further restricting exports of components critical to those industries,” Zhu wrote. That means Beijing ”will have to think hard before committing to an overt industrial policy," he said.

Chinese semiconductor imports in 2020 should exceed $300 billion for a third straight year, according to the deputy chairman of the China Semiconductor Industry Association, Wei Shaojun, cited in Chinese news reports. The association says imports peaked at $312 billion in 2018. Last year’s were $304 billion.

Limits on access to foreign technology could knock as much as 0.5 percentage points off China’s economic growth over the next decade, according to UBS economists Ning Zhang and Tao Wang.

Despite disruptions from trade tension and the pandemic, forecasters say the Communist Party is likely to hit its economic targets from the previous Five-Year Plan.

The International Monetary Fund forecasts economic output per person should rise 3% this year over 2019 to $10,600 and by another 50% to $16,250 in 2025, the final year of the new Five-Year Plan.

In 2014, the Cabinet announced a goal of making China a leader in semiconductors by 2030. Official plans call for China to produce 70% of the semiconductors it uses by 2025. It now makes about 20%.

Zhang and Wang of UBS say Beijing is likely to increase its target for total research and development spending from 2.5% of economic output in 2020, or $350 billion to $400 billion, to about 3% by 2025, or as much as $650 billion.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy
© Copyright 2021 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Tiffany agrees to revised terms on LVMH takeover deal
LVMH and Tiffany have worked through their differences, with the famous jewelry company agreeing to be purchased by the luxury goods company for slightly less than what they initially agreed on
7:33AM ( 13 minutes ago )
Polish president takes step back on abortion amid protests
Poland’s president has partially broken ranks with his country’s conservative leadership and said he thinks women should have the right to abortion when they are carrying fetuses with fatal birth defects
7:28AM ( 17 minutes ago )
China leaders vow to create self-reliant 'technology power'
China’s leaders say they will create a self-reliant “technology power” as a feud with Washington cuts access to U.S. processor chips and other high-tech components, hampering Beijing’s industrial ambitions
7:21AM ( 24 minutes ago )
Associated Press (AP)
The Latest: UK govt rejects re-imposing a national lockdown
The British government is insisting that a national lockdown would not be the right approach to deal with the resurgence of the coronavirus even as other countries in Europe are choosing variations on that route
6:09AM ( 1 hour ago )
Volkswagen returns to profit as global auto markets recover
German automaker Volkswagen says it returned to profit in the third quarter thanks to cost discipline and a rebound in global sales markets led by China after the lifting of the severe restrictions on activity in the early phase of the pandemic
6:05AM ( 1 hour ago )
Health contractors vetted stars' politics for US virus ad
Public relations firms hired by the Department of Health and Human Services vetted the political views of hundreds of celebrities for a health education advertising campaign on the coronavirus outbreak
5:50AM ( 1 hour ago )
AP Business
Asian shares lower, US futures up after S&P 500 sinks 3.5%
Asian shares have logged moderate losses after the S&P 500 dropped 3.5% as markets shuddered over surging coronavirus cases that are bringing fresh pandemic shutdown measures
1:34AM ( 6 hours ago )
Venezuelan president: Key oil refinery attacked; 2 detained
Venezuela’s president says a large oil refinery suffered a terrorist attack as his government struggles to provide domestic fuel to the crisis-stricken nation
6:07PM ( 13 hours ago )
Visa 4Q profits plunge as pandemic slows payments worldwide
Visa Inc. said its fiscal fourth quarter profits dropped 29% due to fewer dollars crossing on its namesake payment network while the world was in the grips of a pandemic-caused recession
5:44PM ( 14 hours ago )
AP Business - Economy
Tiffany agrees to revised terms on LVMH takeover deal
LVMH and Tiffany have worked through their differences, with the famous jewelry company agreeing to be purchased by the luxury goods company for slightly less than what they initially agreed on
7:33AM ( 13 minutes ago )
Polish president takes step back on abortion amid protests
Poland’s president has partially broken ranks with his country’s conservative leadership and said he thinks women should have the right to abortion when they are carrying fetuses with fatal birth defects
7:28AM ( 17 minutes ago )
Typhoon, landslides leave 35 dead, dozens missing in Vietnam
Vietnam’s state media say Typhoon Molave has blown away from Vietnam after killing at least 35 people and leaving dozens of others missing in the country’s central region
7:09AM ( 36 minutes ago )
The Latest: France prepares for month-long partial lockdown
French doctors are expressing relief and business owners despair as France prepares to shut down for a month to try to put the brakes on a fast-moving fall coronavirus outbreak
7:05AM ( 40 minutes ago )
Zeta barrels northeast after battering storm-weary coast
A fast-moving Zeta has weakened to a tropical storm as it barrels northeast after causing havoc along the coast
6:55AM ( 50 minutes ago )