FINANCING MECHANISMS UNDERPINNING CHINA'S TECH SELF-RELIANCE
ISSUE BRIEF
ISSUE BRIEF
Financing Mechanisms Underpinning China's Tech Self-Reliance NOVEMBER 2022
NGOR LUONG
I
n 2018, Chinese leader Xi Jinping declared, “key technologies are the most important weapons of the country to promote high-quality economic development and guarantee our national security.”1 Under his leadership, China has sought technology-focused securitization to build an innovation system that supports its broader economic, societal, and geostrategic goals. In response to the economic impact ranging from the ongoing COVID-19 pandemic to the US-China trade and technology war, the Chinese Politburo unveiled the new “dual circulation” strategy at a Central Financial and Economic Commission meeting in 2020.2 The strategy emphasizes China’s domestic market and homegrown technology as well as its continued efforts to promote a hybrid model that balances global integration with domestic economic activities.
The Atlantic Council’s Global China Hub researches and devises allied solutions to the greatest global challenges posed by China’s rise, including China’s growing influence on countries, global institutions, and democratic values, the global ramifications of political and economic change in Xi Jinping’s China, and China’s drive to dominate emerging technologies. The Global China Hub addresses these challenges by leveraging and amplifying the Atlantic Council’s expertise on China and global network across our 15 other programs and centers.
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At its core, dual circulation aims to reduce China’s vulnerability to external shocks, and to increase the country’s self-reliance to better guard against global volatility. To be clear, the goal of the strategy is not to steer China toward complete autarky. Instead, it is meant to be a “proactive strategy to shape the parameters of the divorce.”3 Toward this end, the Chinese government works to improve China’s innovation-building capacity by attracting foreign capital and technology know-how, as well as setting
1
“Xi Jinping: Core Technology is the Most Important Weapon of the Country [习近平：关键核心技术是国 之重器],” Xinhua, July 15, 2018, https://perma.cc/3XVT-U6C2.
2
“The Standing Committee of the Political Bureau of the CCP Central Committee Held a Meeting; General Secretary of the CCP Central Committee Xi Jinping Presided over the Meeting [中共中央政治局常务委 员会召开会议 中共中央总书记习近平主持会议],” People’s Daily, May 15, 2020, http://cpc.people.com. cn/n1/2020/0515/c64094-31709627.html?mc_cid=28966ada58&mc_eid=902fe70bde.
3
Jude Blanchette and Andrew Polk, “Dual Circulation and China’s New Hedged Integration Strategy,” Center for Strategic and International Studies, August 24, 2020, https://www.csis.org/analysis/dualcirculation-and-chinas-new-hedged-integration-strategy.
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