Made in China – China’s Tech Revolution

made in china for years this slogan has been associated with cheap products of dubious quality however in the third decade of the 21st century this notion has begun to poorly reflect reality in fact the development of technology has become one of the main engines of chinese growth what is the current status of china's technological transformation welcome to the 20s report the end of the words assembly line since the initiation of reforms by deng xiaoping at the turn of the 1970s and 1980s china has entered a path of dynamic development driven by investment industrial development and productivity growth lured by a cheap workforce low labor and environmental standards and the promise of a growing market international corporations from japan the us south korea and europe began moving more labor-intensive parts of production change to china in the 2010s the expansive growth dynamics began to decline and chinese authorities began to look for a more sustainable model based on internal consumption technology and innovation until recently china was associated with the world's assembly plant where international corporations assemble their products while their designs and the most expensive components are created abroad apple's smartphones are a symbol of such a policy based on ihs markets estimated factory costs just 8.46 or 3.6 percent of the total value was generated in china for years the goal of the authorities in beijing has been to advance in global value chains changing from the role of the world's assembly plant to a center of design and production of goods with the highest added value since 2000 china has been investing heavily in research and development which is to make it possible to catch up with the technological level of a world tycoons such as the usa japan south korea or the european union in 2018 china's total spending on this goal reached 462.5 billion u.s dollars slightly less than the united states but more than the eu and also more than japan according to the estimates of the state bureau of statistics in 2019 china allocated 2.23 of gdp to research and development this is a huge increase compared to the beginning of the 21st century when it was less than 1 in addition over the years there have been activities related to forced technology transfers copying of foreign solutions and or industrial espionage progress is particularly visible in the telecommunications and digital sectors [Music] huawei p40 series huawei has been one of the leading smartphone manufacturers for a long time and recently companies such as xiaomi oppo and vivo have joined this narrow group symptomatic for this process is the expansion of chinese digital companies such as baidu alibaba and tencent whose total value is currently estimated at 1 trillion u.s dollars bat has now almost completely dominated digital services in china and is one of the leading companies in the artificial intelligence sector in the ranking of the world intellectual property organization and cornell university china has improved its assessment of the ict sector from 36.1 in 2014 up to 74.5 in 2019. for comparison in the same period the u.s index increased from 83 to 89 on a hundred point scale thus china improved its result by more than 100 percent over the five years and significantly shortened the distance between it and the usa technological autonomy the 14th five-year development plan announced in october 2020 made technological autonomy one of the pillars of china's development strategy this is expected not only to double gdp by 2035 while overtaking the u.s at around 2028 but also to let china become independent from critical components for its technological industries in 2015 the authorities published the semi-official made in china 2025 strategy with the goal of achieving an advantage in strategic production sectors and increasing the share of domestically produced components to 40 percent in 2020 and up to 70 percent in 2025. the creation of an independent high-tech industry has become a developmental and strategic imperative for china due to the growing standard of living and increased wages china is gradually ceasing to be a country of cheap labor and negative demographic trends forced the need to transform the current developmental model since 2009 the average wage in chinese industry has increased from 26 600 yuan all the way up to 72 000 yuan in 2018 which is around 11 000 us dollars the realities of working for the proverbial bowl of rice are becoming increasingly rare by 2050 the working age population is expected to decrease by about 23 percent or about 200 million people which means that china must focus on increasing productivity and dominating at the high-tech sector the government is also moving away from the concept of expansive growth at the expense of the environment as evidenced most clearly by xi jinping's speech at the un in september 2020 in which he announced an ambitious plan to achieve carbon neutrality in china by 2060. also take on directly the challenges posed by our prosperity security and democratic values by our most serious competitor china key to chinese efforts to advance technology is the united states with which china has a deteriorating relationship the authorities in washington have identified beijing as the main strategic rival that is capable of undermining u.s hegemony in the indo-pacific region and in the world china is increasingly challenging american companies in areas such as telecommunications technologies artificial intelligence 5g renewable energy high-speed rail and the space program sanctions imposed by donald trump against chinese companies and pressure on allies worsened the climate for the possibility of china's technological development in key sectors the high level of interdependence between china's developed economies and the promise of a huge sales market both continue to attract many tech companies to operate in china and these represent an almost insurmountable barrier to economic decoupling plans inaccessible microprocessors in 2020 china purchased overseas microprocessors with a total value of more than 350 billion us dollars which reflects the transformation of the chinese economy and the progressive digitization of economies around the world last year's result is higher than the value of china's imports from the european union or the cost of all oil imports semiconductors are the basis for the functioning of many branches of advanced industry and in particular the electronics sector china remains dependent on imports of advanced microprocessors from taiwan japan south korea and the u.s according to calculations by the semiconductor industry association producers from china are responsible for only five percent of the global and 16 percent of the domestic market moreover these are mostly systems with a lower level of technological advancement microprocessors manufactured in the gold standard 7 5 nanometers are still beyond the reach of chinese industry while the competition is moving towards the production of a new generation of integrated circuits in the three nanometer standard the individual stages of the production and use of semiconductors are therefore dependent on cooperation with foreign partners and thus exposed to interference for china getting a better position in the sector is not only a question of economic advancement but also of being more resilient to us pressure for years the ccp chinese communist party has directed huge resources to the development of the microprocessor sector in the form of subsidies tax breaks and loans though the results are far from the ambitious goals that were set by beijing the ai future artificial intelligence has been identified by chinese authorities as one of the key technologies of the 21st century in which china has a real chance to become a real leader the largest internet user base easy access to large amounts of data digitization of everyday e-commerce services and generous government support are seen as key strengths of enterprises and of the chinese state in competing with the us ai like 5g is a classic general-purpose technology that can be used in virtually all sectors of the economy and in the command and organizational structures of the armed forces in 2017 chinese authorities unveiled a three-step strategy to build the world's leading ai sector by 2050 it predicts that by 2020 ai will become an important engine of economic growth the value of industry will increase to 150 billion yuan which is around 23 billion us dollars and related industries will reach 150 billion us dollars the document foresees that several chinese companies will take the lead in some very specific technological fields such as intelligence data sets the next stage by 2025 involves the dissemination of ai solutions in many areas and industries such as digitized industry high-end healthcare smart cities smart agriculture and national defense the value of china's domestic ai industry is expected to rise to 400 billion yuan or 60 billion us dollars and related sectors will exceed 750 billion us dollars at this point a new legal framework will be taking shape encompassing practical and ethical standards as well as an institutional regime the third and final stage envisions that china will become a global leader in the global artificial intelligence industry with the most competitive enterprises top-notch science and research capabilities and the most sophisticated talent pool at this point artificial intelligence will be widely used in manufacturing services both military and public systems the total value of artificial intelligence activities in china will reach 150 billion us dollars and related industries will account for over 1.5 trillion us dollars 5g struggle the fifth generation telecommunications network or 5g is one of the technologies that will drive the digitization of societies and economies as well as economic growth the implementation of the 5g network will lead to a significant qualitative and leaf change in terms of connection capacity reduction of delays and an increase in the number of devices supported the fifth generation network is expected to increase data transmission capacity a hundred times and be able to connect up to a hundred times more devices in the internet of things the potential associated with this technology is huge as it will affect virtually all spheres of economic activity stock market analysis autonomous vehicles smart grid smart home inter machine communication and even the entertainment industry from the very beginning chinese companies huawei and zte have been among the world leaders in this sector it is estimated that huawei has the largest number of patents in the field of 5g technology over 13 000 ahead of qualcomm and samsung the available estimates also indicate that the company has the most patents granted under the so-called patent families at 3 000. the chinese telecommunications giant is also making a major contribution to standard setting the company's strength from shenzhen is also its end-to-end offering that is the ability to provide everything from infrastructure all the way to end devices i want to thank you all for being here to discuss a critical issue for our country's future winning the race to be the world's leading provider of 5g cellular communications networks it's all about 5g now along with the intensification of competition with china the trump administration has taken steps to persuade european governments to exclude huawei and zte from the process of implementing 5g technology in europe on charges of espionage for the chinese communist party as a result of the campaign a number of declarations on the new technology were signed mainly with the countries of central and eastern europe and joint declarations regarding the clean network initiative were adopted the actual exclusion took place in great britain sweden and france the company's future in other countries is also at stake on may 15 2019 the us department of commerce based on a motion by donald trump banned the sale of goods and services to huawei and related companies to the entity list at the same time the american authorities left the door open by introducing a 90-day temporary general license allowing for the maintenance of economic contacts the department of commerce has allowed the license to be renewed multiple times since the sanctions were introduced but the last one expired on august 13 2020. in may and august of 2020 the penalties against huawei were tightened by preventing the sale of products not only to american companies but also to all companies using american software and hardware the trump administration's decision turned out to be extremely serious for the chinese telecommunications giant and in the long term it has a chance to effectively limit its foreign expansion at the same time however it can count on the chinese market as the authorities in beijing are striving to introduce 5g technology as quickly as possible throughout the country by the end of november 2020 700 000 5g base stations were installed in china which allowed the connection of over 180 million end devices in a new technological standard the covet 19 pandemic not only did not slow down the process of modernizing the telecommunications infrastructure but the achieved result exceeded expectations from the beginning of the year by a number of over 200 000 stations however this is only the initial phase of the five-year long march to dominance in the telecommunications sector in 2021 the construction of an additional million base stations is planned and by 2025 their number is expected to reach almost 5 million the chinese technology industry is not without its problems but the distance that china has caught up with the west can undoubtedly be called a great leap forward the chinese using a range of tools in the form of technological espionage staff educated in the west but also their own innovation and determination scrupulously implement the vision of deng xiaoping from 40 years ago and most of that time they could do so without being disturbed by the us and even with washington's blessing the situation is completely different that was the 20th report the analysis was prepared by pavel paschak director of the indo-pacific program at the institute of new europe special thanks as always go to the patreons if you want to become one of them please visit the channel's profile on patreon remember to subscribe comment and like to sustain the algorithms thank you for your attention and see you in the next episode

Channel: Good Times Bad Times

Views: 174,761

Keywords: china, usa china, usa china 2021, 5g, 5g china, AI, AI china, artificial intelligence, biden china, high tech, high tech china, r&d, huawei, china 2021, oppo, vivo, zte, semiconductors, baidu, aliexpress, alibaba, tencent, made in china, internet of things, trump china, xi biden, xi, 20s report, good times bad times, china tech, technology, technological revolution, geopolitics, usa china geopolitics, china geopolitics

Id: 9rDkHyomg7o

Length: 18min 27sec (1107 seconds)

Published: Fri Mar 12 2021