China’s Xi Vows Victory in Tech Battle After US Chip Curbs

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(Bloomberg) -- Chinese President Xi Jinping pledged his nation will prevail in its fight to develop strategically important tech, underscoring Beijing’s concern over a US campaign to separate it from cutting-edge chip capabilities.

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“We will focus on national strategic needs, gather strength to carry out indigenous and leading scientific and technological research, and resolutely win the battle in key core technologies,” Xi said in a speech Sunday at the opening of the ruling Communist Party’s twice-a-decade congress in Beijing.

Xi said the world’s No. 2 economy will speed up innovation in areas that are vital to “technology self-reliance,” adding that “China will move faster to launch a number of major national projects that are of strategic, big-picture and long-term importance.” He didn’t give details on those efforts.

Xi Says China’s Power Has Increased, Warns of ‘Dangerous Storms’

The comments illustrate how China plans to deal with the US placing new restrictions on tech exports that could undercut its ability to develop broad sections of its economy such as semiconductors, supercomputers, surveillance systems and advanced weapons.

The focus on science was “a reflection on just how much Xi Jinping is betting on innovation as a solution to China’s economic problems and to its reliance on Western technology,” said Neil Thomas, a China analyst at Eurasia Group Ltd., a political risk advisory firm.

“That’s super significant. It really shows his increasing priority that this is his big bet basically for the future of China.”

Xi’s Vow to ‘Stand Tall’ Has China on Collision Course With US

Earlier this month, the US Commerce Department unveiled sweeping regulations that limit the sale of semiconductors and chip-making equipment to Chinese customers, striking at the foundation of the country’s efforts to build its own chip industry. The US also added 31 organizations to its unverified list, including Yangtze Memory Technologies Co. and a subsidiary of leading chip equipment maker Naura Technology Group Co., severely limiting their ability to buy hardware from abroad.

Those moves were the Biden administration’s most aggressive yet as it tries to stop China from developing capabilities it sees as threatening. The US is seeking to ensure that Chinese companies don’t transfer technology to the People’s Liberation Army, and that chipmakers in China don’t develop the capability to make advanced semiconductors themselves.

Depending on how broadly Washington enforces the restrictions, the impact could extend well beyond semiconductors and into industries that rely on high-end computing, such as electric vehicles, aerospace and smartphones.

Xi Says Economic Development Is Communist Party’s Top Priority

Beijing has criticized the expanded US curbs on its access to semiconductor technology, saying they will harm supply chains and the global economy. Foreign Ministry Spokeswoman Mao Ning said the measures -- which start to go into force this month -- are unfair and will “also hurt the interests of US companies.”

In the speech to the party congress that’s expected to result in him getting more time in power, Xi said China was now one of the world’s great innovating nations, lauding its capabilities in areas such as space exploration and biomedicine.

China and the US are in an increasingly fierce competition over space as Beijing sends probes to the moon, builds its own space station and sets its sights on Mars. NASA Administrator Bill Nelson has accused China of stealing space technology, and the country has been criticized over its handling of debris falling back to earth.

Last month, China said it plans to launch three unmanned missions to the moon over the next decade, an announcement that came a day after saying it discovered a new lunar mineral via samples retrieved by its Chang’e-5 mission.

(Updates with more context.)

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