China Science Vs US Export Controls

While China’s DeepSeek gave Silicon Valley’s tech bros plenty to worry about, it also renewed attention to Beijing’s increasing focus on innovation and self-sufficiency.

Take, for instance, a cancer medicine developed in China that has been giving America’s Merck a run for its money. While the drug was launched way back in September, it was DeepSeek’s launch that brought it international attention, as all eyes turned to China’s strides in tech and innovation.

Experts chalked up China’s prowess in the field of biotechnology to strong government support, among other factors. State backing for tech is by no means new to China and has helped the country over decades to build global dominance in everything from cars to solar panels. And the West has sought to tackle the impact of that state funding through tariffs and export controls.

But Beijing’s deep-pocketed backing of science and technology is poised to take on a new persona at a time when Donald Trump is shaking the foundations of American innovation.

Ironically, that foundation is also made up of billions worth of state funding, which Trump and his billionaire aide Elon Musk have sought to cut off as “government waste”. Effectively, illustrious US universities are putting off hiring and not filling postdoctoral positions, and decades-old American agencies are laying off hundreds of thousands of scientists. The picture is so grim that universities and tech firms over in France and China are now promising a safe harbour to these laid-off scientists.

Yes, you read that right, China.

Recruiters for technology firms based in China’s Shenzhen are posting ads seeking “talents” laid off by American agencies and universities to explore ”boundless opportunities” in the technology hub they say embraces “an open and inclusive spirit”. Those ads have not gone unnoticed in America, with one lawmaker telling Politico magazine that “these are legitimate offers and are extremely concerning.”

But these job offers are not all that China is bringing to the table. Just this month, several top Chinese universities have announced plans to increase enrolment in areas like artificial intelligence to prioritise what they call "national strategic needs”. Meanwhile, Beijing has announced plans to bump up its spending on science, boost support for researchers and universities and explore a range of other measures to develop "industries of the future”.

While none of these moves will give China the upper hand on science overnight, they could certainly pave the way for it to overtake the United States in coming years if Trump continues a “siege of science”.

Mind you, that siege has not just been limited to climate and health. It has also hit funding for semiconductor research — a field that is the backbone of all emerging technology and the most prominent area in US-China tech rivalry.

Trump’s dislike for the “horrible” CHIPS and Science Act has been no secret. But what has remained relatively underplayed has been that dislike’s impact on the US’ National Institute of Standards and Technology (NIST) — an agency responsible for $50 billion in federal semiconductor manufacturing and research subsidies. The resulting layoffs at NIST — which happened this week — along with other moves by Trump to gut the act, won’t just affect funding for chipmakers like Samsung and TSMC. They will also hurt chip research within the US.

At such a time, it is worth wondering how far export controls would go to slow down China’s tech growth, considering they already gave Beijing the nudge to boost its tech sector with guns blazing.

A Trump legacy?

It’s also worth noting that China is already benefitting from a program launched by the Trump administration in 2018 — called the China Initiative — which has led a huge number of Chinese scientists working in the US to leave the country. The China Initiative aimed to find and prosecute Chinese scientists suspected of espionage and research theft, but the program was scrapped by Joe Biden after several cases brought under it were thrown out by US courts. Following Trump’s re-election, a former FBI agent said the program should not be reinstated as it was “an unmitigated failure that caused lasting harm to US national interests.”

The scrutiny in US and worsening geopolitics meant that scores of Chinese scientists including mathematicians, nuclear physicists, and nanotechnology experts have left the US for the mainland. Meanwhile, China has also cemented its lead in research on next-generation chipmaking technologies. China has accounted for 34% of research articles (more than the US and Europe combined) on chip design and fabrication between 2018 and 2023, according to research published this month by the Emerging Technology Observatory. “If China is able to commercialise some of this technology, it’s not that they would be catching up, but potentially leap-frogging,” a researcher on the study told Nature magazine.

In keeping with that concern, Chinese scientists have claimed various chip breakthroughs this month, including using “new materials” to create chips that “could operate 40% faster” than those from Intel and TSMC and developing “the world’s first carbon-based” AI chip. And Huawei and SMIC have reportedly developed a homegrown extreme ultraviolet (EUV) lithography machine — the most advanced level of chipmaking tools that Europe’s ASML has a near-monopoly on — with production set to begin in the third quarter of this year.

How true these claims are, of course, remains to be seen.

• TSMC has reportedly proposed a joint venture with top US chip designers – Nvidia, AMD and Broadcom – to  operate Intel’s chip foundries.

• Tesla is planning to make a cheaper and smaller version of its best-selling car, the Model Y, in Shanghai, under a project codenamed “E41”.

• China has slammed a recent deal by Hong Kong’s CK Hutchison to sell its ports along the Panama Canal as ‘a betrayal of China.’
  

• And Vietnamese leaders have scrambled to sign some big deals with the United States in a bid to reduce their trade imbalance.