China tech firms embrace inward economic pivot, but some wary of ‘technological isolation’

Xi Jinping’s inward-looking economic strategy is proving a golden opportunity for some Chinese tech firms, who have seen a rush of orders

Others worry China’s aggressive push to expand domestic development could backfire, warning of the perils of technological isolation

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China is aggressively expanding its domestic tech sector in the face of US sanctions. Photo: AFP

Published: 8:00pm, 10 Sep 2020Updated: 10:46am, 11 Sep 2020

China’s pivot to domestic production of hi-tech products is gathering pace as the country looks to shake off dependence on foreign technology in light of decoupling threats from the United States.

President Xi Jinping announced in May a new “dual circulation” strategy, which will focus on making the domestic economy more resilient in an increasingly hostile external environment.

Relations between China and the US have in recent months plummeted to the lowest point in decades, as the two powers clash on issues ranging from the coronavirus pandemic to Hong Kong to trade.

In the tech sphere, the Trump administration has aggressively targeted Chinese companies like Tencent and Huawei with sanctions in a bid to starve them of American technology.

Many Chinese firms used to be afraid of using domestically produced parts, but now that has changed significantly.

Zhong Musheng

Beijing’s focus on home-grown technology development to offset the geopolitical challenges is proving a golden opportunity for some Chinese tech firms, but it has created confusion and concern for others, industry experts said.