US-China tech war: Xi Jinping’s right-hand man Liu He to test whole-country approach on ‘next-generation’ chips but obstacles remain high

A little-known government agency led by Vice-Premier Liu He, a trusted aide to President Xi Jinping, is emerging as the command centre for the most important battle in Beijing’s technology war against the United States: achieving chip autonomy by focusing on future technologies.

One fighting strategy for China is to harness the integrated resources of universities, research institutions and private businesses to seek breakthroughs in next-generation chips for the “post-Moore Era”, when the 1975 rule-of-thumb from Intel co-founder Gordon Moore which posits that the number of transistors on a silicon chip doubles roughly every two years – potentially becomes obsolete.

Analysts say China’s intention to leap from current silicon wafer chips to “third-generation” chips fabricated with new materials will be an uphill struggle given existing technological barriers. However, Beijing appears intent on testing a whole-country approach to give this long shot a try, in the same way that the Chinese Communist Party mobilised all its available science and technology resources in the 1960s to produce its first atomic bomb.

The search for disruptive chip technology was made public last month at a meeting of the “National Leading Group for Reform of the Science and Technology System and Building an Innovation System”, an obscure interministerial body created in 2012 to coordinate China’s technology policy and projects across governmental agencies. Apart from its first meeting in 2012, the activity of the leading group has been largely shrouded in secrecy, until recently.

Liu, 69, took over the leading group in September 2018, according to a statement issued then by the State Council. In last month’s meeting, chaired by Liu, members looked at China’s technology development strategy for the next five years, according to a government statement.

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SCMP Explains: China’s five-year plans that map out the government priorities for development

SCMP Explains: China’s five-year plans that map out the government priorities for development

The group, which includes delegates from China’s civil technology administrators as well as military technology units, also conducted a themed discussion on “potentially disruptive integrated circuit technologies in a post-Moore’s Law era”, indicating that Beijing is looking at areas such as new chip materials to cut the country’s reliance on US technologies and sidestep harmful sanctions.