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Oct. 29, 2020, 11:58 p.m. EDT

China vows to become a self-sufficient ‘technology power’ amid U.S. curbs

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By Associated Press

BEIJING — China’s leaders are vowing to make their country a self-reliant “technology power” as a feud with Washington cuts access to U.S. computer chips and other high-tech components, hampering Beijing’s industrial ambitions.

Leaders of the ruling Communist Party made the announcement Thursday after a meeting to draft a development blueprint for the state-dominated economy over the next five years.

President Xi Jinping’s government is trying to limit damage from the Trump administration’s curbs on technology sales to China in a fight over security and spying. Those threaten to disrupt plans to create Chinese companies able to compete in telecoms, biotech and other fields, which communist leaders see as a path to prosperity and global influence.

“Science and technology should be self-reliant as a strategic support for national development,” said a party statement. It promised to “accelerate the building of a science and technology power” but gave no details.

Five-Year Plans, issued since the 1950s, form the basis of regulation and industry initiatives in an economy where the ruling party still plays a leading role after four decades of market-style reforms. The full plan is due to be released in March. Changes in regulations and plans for individual industries will be announced after that.

Thursday’s statement promised to promote “green and low-carbon development” and to raise Chinese living standards. It called for unspecified steps to strengthen the 2.3 million-member People’s Liberation Army and to “ improve our strategic ability to defend national sovereignty.”

China faces a “complicated international situation,” it said, but it made no mention of the coronavirus pandemic or its tariff war with Washington.

Technology is a cornerstone of the ruling party’s marathon campaign to promote self-sustaining growth based on domestic consumer spending and to build a “moderately prosperous society.”

China’s factories assemble most of the world’s smartphones, personal computers and consumer electronics but need U.S., European and Japanese components. Its communist leaders see that as a strategic weakness.

Thursday’s statement cited no specific technologies, but leaders are especially worried about China’s reliance on U.S. providers of processor chips used in smartphones, electric cars and other technologies central to their development plans.

Semiconductors are China’s biggest single import by value, ahead of crude oil.

Companies including telecom equipment giant Huawei Technologies Ltd., China’s first global tech brand, are developing chips and other components. But, like their Western and Asian counterparts, none can supply all its own needs.

President Donald Trump’s 2018 tariff hikes on Chinese goods over complaints Beijing steals or pressures companies to hand over technology have raised pressure for greater self-reliance.

Last year, the White House added to that by tightening controls on Chinese purchases of chips and other components.

“The trade war and growing tensions with foreign governments have heightened concern about reliance on foreign inputs,” Julian Evans-Pritchard and Seana Yue of Capital Economics said in a report ahead of Thursday’s announcement.

“The push for self-sufficiency is increasingly visible,” they wrote.

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