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Over the next decade, China is set to be turned into one giant computer lab in pursuit of 21st century tech dominance.

Why China is on its way to be world’s next leader of deep technology

Main Image: Over the next decade, China is set to be turned into one giant computer lab in pursuit of 21st century tech dominance. Credit: KAZUHIRO NOGI/AFP via Getty Images

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Kimberley CainesThe West Australian
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Over the next decade, China is set to be turned into one giant computer lab in pursuit of 21st century tech dominance.

Entire towns will be transformed into dedicated hubs for the development of artificial intelligence, biotechnology and robotics.

It is happening already in the city of Hangzhou. Building after building houses cloud computing technology — giant banks of computers to store and manage data on the internet.

China is moving fast. Its goal is nothing less than fomenting a technological revolution that will see it dominate the world in the science-driven, groundbreaking technologies of the future that make the impossible possible. Otherwise known as deep tech.

But unlike the free-for-all capitalism that drives innovation in America’s Silicon Valley, this is a revolution driven from the top down and kept under the tight control of the Communist regime and its unchallenged leader, President Xi Jinping.

Chinese President Xi Jinping, also general secretary of the Communist Party of China CPC Central Committee and chairman of the Central Military Commission.
Camera IconChinese President Xi Jinping, also general secretary of the Communist Party of China CPC Central Committee and chairman of the Central Military Commission. Credit: Xinhua News Agency/Xinhua News Agency via Getty Images

Already he has put the building blocks in place, reshaping Chinese business and society to achieve his goals with youth at the vanguard of the changes. It is evident in a raft of decrees, regulations and policies seeking to roll back the excesses of the West — targeting video gaming, celebrity culture, data control, tech floats, excessive wealth and education.

In some ways, it may be viewed as China’s new Cultural Revolution, after the seismic Maoist shake-up to revitalise Communism in the 60s that turned the country’s young people into foot-soldiers for the party against the old guard.

In this revolution Xi wants to re-engineer society by making sure Millennials are not wasting their time on social media and playing games but are instead harnessing their skills to enhance the nation. At the same time, he is using the tools of the state to rein in China’s tech titans and pressure them to turn their enterprises to the service of fulfilling his vision.

Xi wants complete technological independence for China, not least for the strategic and military advantages that would flow from it in its struggle to topple the US as the world’s dominant power.

“Self-reliance is the foundation for the Chinese nation,” Xi said in a speech in March last year.

“We must strive to become the world’s main centre of science and the high ground of innovation.”

But is a command economy compatible with technological advancement and innovation?

The disasters of the Cultural Revolution and the earlier Great Leap Forward, an attempt to transform China into an industrial nation overnight, would suggest not.

But the world is about to find out.

WHAT IS DEEP TECH?

It is tech engineers and scientists working together to develop innovative new solutions that solve society’s biggest issues — as early as 30 years before the is a pressing need for them

Medicine, climate change, energy and food production are key fields of deep tech.

The technological solutions range from AI and machine learning to big data and blockchain to quantum computing, nanotechnology and biotech.

Biotech developments have been seen in the past two years with the global pandemic.

Close-up of a corona quick test at home. The bar at the "C" shows a negative result. Picture: Yuelan, Getty Images/iStockphoto
Camera IconBiotech has made the development of Rapid Antigen Test’s possible. Credit: yuelan/Getty Images/iStockphoto

The rush to develop vaccines, rapid testing, and protective equipment put deep tech in the spotlight.

It was perhaps the first time the everyday person engaged in scientific discussion since the 1969 moon landing.

The mRNA vaccine that has saved millions of lives around the world and been a leading technology in the COVID jab race — as well as creating billions of dollars in market value — was not created overnight.

The idea started more than 20 years ago by researchers in the US.

TECH MAKERS, NOT TAKERS

Two thousand years ago China was the most technologically advanced nation in the world. It is now competing with Western nations and Japan to regain the ascendancy.

The United States, specifically Silicon Valley, remains the world’s leading technology and innovation centre.

It’s where the likes of Facebook boss Mark Zuckerberg are dominating deep tech.

He wants to reposition Facebook to create an immersive world where social interaction, commerce and the internet all meet through Web 3.0 — the next iteration of the internet.

Mark Zuckerberg, chief executive officer and founder of Facebook Inc., speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Friday, Jan. 31, 2020. The summit brings together the leading minds in the tech industry for two-days of keynote speakers, breakout sessions, and networking opportunities. Photographer: George Frey/Bloomberg
Camera IconMark Zuckerberg wants to reposition Facebook to create an immersive world with Web 3.0. Credit: George Frey/Bloomberg

He has described his vision as “an embodied internet that you’re inside of rather than just looking at”.

And then you have Tesla CEO Elon Musk — who is actually trying to change the world by exploring space travel, electric transportation, alternative energy, brain-machine communication and urban commutes.

Meanwhile, most of his competitors are focused on ad-clicks and the digital land.

But it’s the Chinese who are determined to outdo deep tech companies all over the world by turbo-charging this move back towards real, hard tech.

Things like computer chips, engines, fuels and aircraft that add real economic value.

They want tech to win wars.

In recent years, China has had success with cutting-edge ideas.

It launched the first-ever quantum communication-satellite in 2016, was the first to do a landing on the far side of the moon in 2019, and had the world’s fastest super computer in 2020.

The country has also built the world’s largest facial recognition system and is the leader of 5G networks around the globe through Huawei — the rival of Apple and Samsung.

The telecommunications company manufactures and sells smartphones, laptops, and telecom equipment, and has an annual revenue of more than $135 billion.

But China is right now planning to take a punt in big tech — a worldwide industry currently worth well over $5 trillion.

Data from Hello Tomorrow shows that global funding in deep tech start-ups increased from $15 billion in 2016 to $60 billion in 2020.

According to US international broadcaster Voice of America, China’s first move is to use one of its largest deep tech companies, Alibaba, to make computer chips.

“So far, Alibaba is best known for its internet business, which includes selling items and providing data storage,” Voice of America says.

“But in the last three years, (it) started making chips. It now makes three models and said they are not for sale outside of China.

“Two other companies, including Tencent, a company that develops games and other social media are working on building chips, too.

“If China is successful in closing its technology industry to the world, experts say trade, inventive effort and wealth might lessen around the world.”

It’s understood if China can get an advantage on the cutting-edge technology, it will not just become a larger economic superpower but more of a geopolitical and military one than it is already.

Chinese firms are investing to go to market with deep tech in the next decade and thereafter.

In 2020, entrepreneurs in China founded 22,000 chip firms, 35,000 cloud-computing companies and 172,000 AI start-ups.

China technology expert, who is the Associate Professor at the Australian National University Crawford School of Public Policy, Andy Kennedy told The Sunday Times China wanted to be a lot more “self-reliant”.

“The country sees an incredible opportunity at the moment to lead the next technological revolution, boost economic growth and promote national security,” Associate Prof Kennedy said.

“To do this, they have developed what are called industrial guidance funds to pump money into high priority technology sectors.

“They’re putting a lot of money into this. It’s clear they’re going to be very ambitious and aspire to leadership.”

Associate Prof Kennedy said he could see China becoming a world leader in electric vehicles.
Camera IconAssociate Prof Kennedy said he could see China becoming a world leader in electric vehicles. Credit: Future Publishing/Future Publishing via Getty Images

Associate Prof Kennedy said he could see China becoming a world leader in electric vehicles but would struggle more on computer chips.

“This is a really high priority. The largest industrial guidance fund targets semiconductors, after all,” he said.

“But just what they’ll get out of this remains unclear.

“They would also like to be among the leaders in a wide range of other technologies, from civilian aircraft to biotech to artificial intelligence.”

CHINA CRACKDOWN

China has had enough of a generation glued to their phones and video games.

So it has put strict measures in place to curb what authorities described as a frivolous youth video game addiction.

Hundreds of millions of gamers aged under 18 in the country are banned from video games during the school week.

They can have one hour a day on Fridays, weekends and public holidays.

China has limited millions of gamers aged under 18 to one hour a day on Fridays, weekends and public holidays.
Camera IconChina has limited millions of gamers aged under 18 to one hour a day on Fridays, weekends and public holidays. Credit: Ng Han Guan/AP

The philosophy is to get them thinking of how to develop the next big thing.

To make Xi’s deep tech vision of becoming a techno-utopia into a reality, Chinese regulators have been cracking down on the country’s tech scene, despite it generating world-beating innovations and incredible shareholder value, to re-establish who has the authority.

At least $1 trillion has been lost so far, putting investors on alert, but it’s all part of Xi’s long-term tech plan.

The idea is a transfer of resources from internet companies to firms that can create substantial advances in technologies.

The biggest casualties have been Alibaba, Didi Global (country’s largest ride-sharing company) and Meituan (food delivery company).

“The Chinese government is cracking down on those flouting the rules,” Mr Kennedy said.

“And on the other hand, they want to make clear to these high-flying tech CEOs that they’re not more important than the Chinese government and they need to respect them, so in that sense it’s really political.”

An article in the Economist stated the crackdown on tech companies had “spooked entrepreneurs and venture capitalists”.

“It is true that some smaller firms view the tech giants as bullies that have strong-armed rivals and snuffed out competition,” it read.

“China’s most innovative start-ups have had the choice of selling out to big tech or facing a quick and brutal demise.

“The recent dismantling of online monopolies has been a Godsend for many promising young executives who have long struggled under the thumb of big tech.”

TECH REVOLUTION

Chinese media have likened the government’s push to make its own domestic computer chips — to counter growing technological pressure from America — to the Great Leap Forward.

It’s been dubbed the “Great Semiconductor Leap Forward”, which refers to the 1958 order by Mao to surpass British steelmakers by producing steel in backyard furnaces — an effort that led to history’s biggest famine.

Xi’s “techno-leap” towards deep tech could not be as disastrous as he has pledged to invest $2 trillion in the six years to 2025 to build high tech industries, with computer chips at the forefront.

Currently, China imports more than $410 billion worth of semiconductors a year.

But it is hoping to put a stop to that for good after American imposed sanctions on Huawei, and on Semiconductor Manufacturing International Corporation, the country’s biggest chipmaker.

Australian Strategic Policy Institute’s International Cyber Policy Centre senior analyst Karly Winkler said China was “a technological powerhouse, there’s no denying it”.

“They have the market because their population is enormous, and have got the skills because they educate their people at universities around the world,” he said.

Ms Winkler said China did not want to depend on anyone else again after the WWII.

“They will never allow anyone else to control their destiny and so they want resilience and not to be challenged,” she said.

“I think it’s less about getting people working, and more about not needing anyone else.”

AUSTRALIA’S POSITION

Australia is home to a number of deep tech companies across sectors including energy and environment, new materials, and intelligent machines.

One example is Cochlear — a medical device company that designs, manufactures, and supplies cochlear implants.

Child wearing a Cochlear implant.
Camera IconAustralia is home to Cochlear — a medical device company that designs, manufactures, and supplies cochlear implants. Credit: Aleksandr Rumiantsev/???? ????? - stock.adob

Australia’s deep technologies are expected to become more mainstream in the coming years due to a demand to solve some of the world’s biggest problems such as the growing climate crisis.

According to Perth cyber expert Paul Haskell-Dowland, who is an Edith Cowan University Computing and Security Professor, Australia has to keep investing in technology to avoid falling behind the rest of the world.

“We are going to be a tech nation, as is pretty much every other nation on the planet,” Prof Haskell-Dowland said.

“But a country the size of Australia will never be able to lead in all of the areas so we need to identify the areas where we can excel and where we can lead the world.

“China’s got the advantage of scale, and they also have the advantage of still having a relatively cheap labour force.”

Prof Haskell-Dowland said Australia’s niche was cyber security, robotics and automation.

“Cyber security has seen quite a bit of an explosion, particularly in Perth, with a larger than perhaps expected engagement,” he said.

“Autonomous vehicles is one which has huge opportunity in Australia, partly because of our environment. Particularly on the west coast, we are very privileged to live in a relatively sparsely populated part of the world.

“And so running testing, for example, with autonomous vehicles is an awful lot safer doing that here than it is in many other parts of the world.

“We’re also doing very well with NASA in terms of attracting funding and attracting operators to come and try our technologies.”

While China is on its way to be the world’s next leader of deep tech, whether it uses the methods of a Cultural Revolution or not, it is not immune to the law of unexpected consequences.

It could be difficult to secure everything it needs to operate in its techno-utopia bubble if it separates its technology industry from the rest of the world.

Therefore, if something big is created in a country that China does not trade with, its industry could really suffer.