China puts onus on computing power as US tech war shows no sign of abating

China says it will prioritise the advancement of computing power as the nation turns its attention toward creating a strong foundation for its rapidly expanding digital economy, which has become an increasingly vital battleground in its tech war with the US.

Urgent calls to action by high-ranking Chinese officials reflect how Beijing is scrambling to bolster the nation’s technological self-sufficiency as the administration of US President Joe Biden has stepped up tech curbs to contain China’s technological progress and economic development.

“Computing power is now the cornerstone of digitisation,” said Jin Zhuanglong, the head of the Ministry of Industry and Information Technology (MIIT), at a forum on Saturday in the Ningxia Hui autonomous region.

With more than 41 per cent of its economic output generated from the digital economy, China has the world’s second-largest computing capacity, after the United States.

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To catch up, the world’s second-largest economy must accelerate the construction of national computing hubs and data centres while quickening the pace of technological breakthroughs, Jin added.

In the eyes of deputy MIIT minister Zhang Yunming, computing power is now a strategic focal point for the world’s major economies, and it is driving a new wave of technological and industrial revolution.

“Global competition for data and computing power has notably intensified, with major nations enhancing their strategic deployment in computational power and computing industries, aiming to seize a commanding position in future global competition,” he said at the same forum.

“China must enhance systematic innovation and firmly get hold of core technologies,” he added, noting that policies will soon be rolled out to enhance the high-quality development of computational infrastructure, without giving further information.

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Computing power is vital in supporting the operations of artificial intelligence (AI), big data and cloud computing – underpinning everything from ride-hailing services to daily business operations and chatbots such as ChatGPT.

But Beijing’s AI ambitions are facing headwinds as the US government looks to curb Chinese companies’ access to American cloud computing services, which would bar mainland clients from using the power of advanced AI chips.

The China Academy of Information and Communications Technology, an institution affiliated with the MIIT, estimated that every yuan spent on boosting computing power would boost China’s gross domestic product by between 3 and 4 yuan (41 – 55 US cents).

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As of the end of June, China boasted a nationwide data-centre infrastructure with more than 7.6 million standard server racks in operation, and these have helped China achieve an average annual growth rate in computing power of nearly 30 per cent over the past five years, according to Zhang.

China also established the Central Science and Technology Commission this year to further strengthen the sector. It operates under the Ministry of Science and Technology and is considered a crucial part of Beijing’s plan to counter US-led attempts to contain China technologically.

The commission is expected to spearhead national plans for science and research, as well as enhance the development of military-civilian technologies.

The commission will promote the creation of a “national innovation system”, examine major strategies for the sector, and address important issues in the field, the government said.

South China Morning Post