Xi Jinping Urges China To Ramp Up Tech Innovation Amid Ongoing Chip Dispute With US

Chinese President Xi Jinping has called on his nation to boost its innovation capabilities, in light of the continuing semiconductor conflict with the U.S.

What Happened: Xi, addressing a national science conference on Monday, praised China’s scientific advancements but underscored the country’s “relatively weak” original innovation ability, Bloomberg reported. He pointed out that “some key, core technologies are controlled by others,” indicating a lack of top scientific and technological talents.

Xi pinpointed “bottlenecks and constraints” in sectors like integrated circuits, industrial machine tools, basic software, and advanced materials.

The U.S. Treasury Department proposed new rules last week to curb outbound investment in tech crucial to U.S. national security, escalating the tech battle between Washington and Beijing that started with the U.S. blocking the sale of advanced semiconductors and related technology to China in October 2022.

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China’s Commerce Ministry urged the U.S. on Monday to maintain fair competition and discard the proposed investment restrictions, asserting its right to retaliate with its own measures.

Xi reiterated China’s commitment to "building a strong country in science and technology by 2035," a goal he believes will strengthen the country’s economic and national defense capabilities.

Why It Matters: The U.S. has been pressuring allies like Japan and the Netherlands to tighten their chip equipment exports to China. This move is an extension of the 2023 agreement between the U.S., Japan, and the Netherlands to prevent China from acquiring advanced chipmaking equipment that could potentially enhance its military capabilities.

China has been making strides in self-reliance, with its leading chip manufacturer, SMIC, ramping up chip production with domestic tools. Chinese researchers have also developed a cost-effective technique for mass-producing optical chips, which could potentially circumvent U.S. sanctions.

Furthermore, Chinese chipmakers are making progress in producing high bandwidth memory (HBM) chips, a critical component in artificial intelligence (AI) chipsets. This development is a significant step in China's efforts to reduce its dependence on foreign suppliers amid ongoing tensions with the U.S.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari