China’s national legislature recently held its annual session, during which President Xi Jinping recognized Shan Zenghai, chief engineer of Xuzhou Construction Machinery Group, who was delivering a speech. Shan had recounted how domestically made heavy machinery had gained presence at home and abroad over the years in a televised interview with deputies to the 14th National People’s Congress earlier that day.
During the deliberation with deputies from the delegation of Jiangsu province, Shan revealed more good news to Xi. He informed him that the 220-ton all-terrain crane, the model Xi had ridden during his inspection tour of XCMG in 2017, can now be 100 percent domestically produced as compared to 71 percent in the past. Xi inquired about the chips in the cranes, to which Shan replied in the affirmative that they are also homegrown.
China’s growing capabilities in chipmaking are laying a strong foundation for the country’s sprawling digital economy. The country’s latest Government Work Report, revealed during the top legislative and political advisory meetings, stated that key priorities this year include pooling of quality resources and concerted efforts to achieve breakthroughs in core technologies in key fields. One of the ministry’s top priorities during the 14th Five-Year Plan (2021-25) period is to advance the modernization of industrial chains and encourage companies to develop core technologies, such as high-end semiconductor equipment.
The emphasis on achieving breakthroughs in chips is an important part of China’s broader push to hone its science and technological prowess. China’s R&D spending exceeded 3 trillion yuan ($436.72 billion) for the first time last year, accounting for 2.55 percent of the country’s GDP. In the 2022 Global Innovation Index, China rose to 11th place, up from 34th in 2012, and firmly remains the only middle-income economy in the top 30, according to the World Intellectual Property Organization.
Chinese officials and industry leaders have called for more efforts to develop the strategically important sector, including drafting a chip law to pursue breakthroughs. They are also urging the government to formulate special policies to support the enhancement of manufacturing enterprises’ R&D capabilities and establish a long-term mechanism to encourage enterprises to improve their R&D core capabilities.