Beijing’s goal of building a self-reliant technology industry has been elevated to become a strategic pillar, part of the latest five-year plan setting out top national priorities. This means that China is redoubling efforts to wean itself off foreign companies, with the result likely to be a cohort of domestic giants and a slow freeze-out of overseas competitors.
Just as the U.S. government starts looking to rein in, or even break up, big technology companies in the belief they have too much power, China is going in the opposite direction. We should expect to see more money, more policy favoritism, and more attention from party cadres aimed at ensuring the establishment of big successful chip and software firms.
The Fifth Plenum of the Chinese Communist Party's 19th Central Committee wrapped up last week by tasking the nation to, among other things, develop self-reliance and build its technological power. The result will be a more insular approach to industry and trade as Beijing strengthens a robust domestic market for those up-and-coming heroes to ply their wares.