This is how it is conquering the key technologies of the future

The tension between the US and China for more than five years now has a very obvious purpose: these two countries are disputing for world supremacy. It’s no secret. In fact, the Government led by Joe Biden openly acknowledged In the document that includes its national security strategy for October 2022, China has the capacity and resources necessary to challenge the US for its global leadership position.

The following verbatim extract from this document reflects very clearly why the US Government considers China a threat: “The People’s Republic of China (PRC) is the only competitor that has both the intention of reshaping the international order and, increasingly more, the economic, diplomatic, military and technological capacity to do so. Beijing has the ambition to create a wide sphere of influence in the Indian and Pacific regions, as well as to become the leading world power.

The social, economic, military and technological development that the country led by Xi Jinping has experienced over the last two decades supports this conclusion. In fact, China is currently the world leader in five key technologies from a strategic point of view due to the relevance they already have, and, above all, because of what they will have in the future. And in others he bids higher and higher. Even so, there is one area in which this giant Asian country still seems to be far from achieving a position of dominance: semiconductors.

These are the five strategic technologies in which China has already managed to lead

One of the objectives of the sanctions against China that the US and its allies have deployed over the last two and a half years is to stop the development of the Chinese semiconductor industry. And to achieve this, the governments of the United States, the Netherlands and Japan have prohibited their lithography equipment manufacturers, including ASML, Tokyo Electron and Applied Materials, from selling their most advanced machines to their Chinese customers.

Chinese lithography equipment manufacturers are supported by the Xi Jinping Administration to develop extreme ultraviolet (EUV) lithography machines as soon as possible, but due to their complexity in all likelihood They will not be ready before five years. Furthermore, most semiconductor experts, including Chinese technicians, argue that China is between 5 and 10 years behind the West in the development of photolithographic equipment.

Xi Jinping’s country, as we have just seen, does not lead in chips. However, as we can see in the graph that we publish below these lines, it is a world leader in unmanned aerial vehicles, solar panels, graphene, high-speed trains, electric vehicles and lithium batteries. This graph has been prepared by Jostein Hauge, who is a professor of Economics at the University of Cambridge (England), taking as reference the data collected by Bloomberg Intelligence and Bloomberg Economics.

This leadership position in these areas is the result of the “Made in China 2025” plan announced by Xi Jinping himself in 2015. His starting point in some of these technologies, such as solar panels or the practical applications of graphene, was very solid a decade ago, but still, there is no doubt that this strategy has been a success. And, furthermore, it will remain in force to allow China to fight face to face with other great powers for leadership in semiconductors, quantum computers, artificial intelligence or robots, among other technologies that have enormous strategic relevance.

China’s dominance is indisputable

The “Made in China 2025” plan has a very clear purpose: to stop being the world’s factory and to consolidate itself as the largest provider of services and high-value products on the planet. As we have just seen, the country led by Xi Jinping has not managed to lead in integrated circuits, artificial intelligence, robots, commercial aviation or medicines, among other areas, but its dominance of the solar panel market is overwhelming.

China’s share of the global photovoltaic cell market is close to 80%, and at the moment only India seems to have the capacity to disrupt it in the long term. Its manufacturing capacity is 17 times greater than that of the rest of the planet combinedwhich has encouraged the Chinese Administration to support the manufacture of more than 1,000 GW of N-type cell capacity as other countries meet their net emissions commitments. Of course, a good part of the Chinese solar panel manufacturers are selling at a loss with the aim of growing as much and as fast as possible.

Now let’s move on to unmanned aerial vehicles. China controls 90% of the world market for consumer and professional drones thanks to the success that manufacturers such as DJI (Dà-Jiāng-Innovations), FIMI or Autel Robotics, among others, have had in recent years. This country’s dominance of the drone and solar panel markets is the result of a recipe in which the support of the Chinese Government, the continuous improvement of the technologies involved in the product and extremely competitive prices go hand in hand.

Essentially the same thing happens in the graphene market as in the two we just explored. China produces 60% of the world’s graphite because it has the largest natural reserves on the planet, and graphene is manufactured from this raw material. Furthermore, the Government considers it a strategic materialwhich has led it to financially support research to develop applications for the electronics, medical and energy industries, as well as advanced materials. And, once again, large-scale production allows China to manufacture graphene at a very competitive Price capable of driving much of the competition out of the market. These ingredients allow the country led by Xi Jinping to control 83% of the Asian and Pacific market

The next industry worth looking at is high-speed trains. China clearly leads it thanks to a network of 48,000 kilometers that, according to the Chinese Government’s forecasts, will reach 60,000 km of high-speed roads in 2030. The next country in this classification is Spain, which currently has more than 3,700 km of high-speed roads. Chinese dominance has been founded once again on very rapid technological development that has been fostered by the large investments that the Administration is making. China State Railway Group has announced that it will invest more than 76 billion euros in 2025 in the development of new high-speed tracks.

We cannot conclude this article without investigating the electric car market and the lithium battery industry. China is currently the largest electric vehicle market in the world. In 2025, more electric cars than combustion engine cars will be sold in this country for the first time, thanks to a certain extent to government subsidies.

Furthermore, China is the largest exporter of electric cars on the planet. In 2023, it exported approximately 1.7 million electric vehicles, which represents more than 30% of its total exports of automobiles. However, its international expansion is being seriously conditioned by the tariffs being imposed by the US or the European Union, among other regions with very serious difficulties in competing with the Chinese electric car.

Finally, China is also the world leader in the production of lithium batteries. If we stick to electric cars, the country led by Xi Jinping manufactures 57% of the batteries used by these vehicles. CATL and BYD are the largest lithium battery manufacturers on the planet with a market share in 2023 of 34% and 16% respectively.

China has achieved this leading position due to several factors. On the one hand, it is the world’s largest producer of lithium and rare earths, which are the main raw materials used in the manufacture of batteries. Furthermore, it controls the processing of these materials and is capable of produce batteries on a large scale and with a very competitive price. Currently there is no indicator that invites us to predict that its dominance of lithium batteries will be threatened in the medium term.

Image | Pixabay

More information | Jostein Hauge

In WorldOfSoftware | Historical record for China: its chip industry has produced more than ever in 2024 despite sanctions