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China continues to cooperate with foreign countries and moves toward technological independence

For decades, the Chinese government has used information and knowledge from abroad to fill gaps in the nation’s innovation system. As the political project of severing China’s dependence on foreign technology becomes more important to Beijing, so does the need for policymakers in Europe and elsewhere to understand and value these relationships.

Photoresist is a major headache for China’s ambitions of industrial self-sufficiency in chip production. These photosensitive materials are essential to the global semiconductor industry. Lithography, the process of encoding the information contained in the design into patterns on the wafer, forms the circuit features after the wafer is coated with photoresist. Chinese companies rely heavily on imports, as a handful of Japanese companies control his 90% of the global market for these materials.

As John Lee and Jan-Peter Kleinhans write, the industrial policy planning of China’s central and local governments prioritizes the development of photoresists. State funding for research and development has allowed some companies to move to the far ends of the value chain. But it is unlikely to be anywhere near the cutting edge within the next five to ten years.

In December, Shanghai Sinyang Semiconductor Materials signed a memorandum of understanding with Heraeus Group, a German company that manufactures ultra-pure specialty chemicals needed to manufacture photoresists. Heraeus will provide material and technical support for the development of our Chinese partners in photoresists. Beyond photoresist, Heraeus’ Shanghai Innovation Center aims to “introduce world-leading technology to lay a solid foundation for local production” of third-generation semiconductors.

This is an example of how partnering with foreign companies can provide useful products and know-how as Chinese industries move forward towards localizing strategic sectors designated by government policy. It’s just

Shanghai Sinyang, like other domestic players, is striving to “break foreign monopolies in high-end photoresists for integrated circuits,” a Chinese securities media outlet reported. In the first quarter of 2021, the listed company invested his 14.56% of its revenue in R&D. His KrF (248 nanometer) thick-film photoresist, developed in-house, has already won its first order, and the company plans to commercialize his ArF photoresist, which he needs to make small chips, in 2023. is.

In another case, German manufacturing and technology giant Siemens is training the United Heavy Gas Turbine Company of China (UGTC) to develop and manufacture large gas turbines. A subsidiary of the state-owned National Power Investment Corporation, his UGTC will provide Siemens’ technical expertise in design, engineering and testing “to support China’s goal of independently developing and manufacturing its own large gas turbines.” Experience is available. The Memorandum of Understanding was signed in 2018. State Power Investment Corporation is a dedicated national science and technology funding megaproject implementation arm.

Extremely difficult to manufacture, large gas turbines are one of China’s 35 strategic import dependencies. It is described in a series of articles published by newspapers run by the Ministry of Science and Technology, translated and analyzed by the Center for Security and Emerging Technologies. These “chokepoints” are of great concern to China’s leaders, who are increasingly concerned about export restrictions from the United States and its allies.

There is an important difference between the two cases. Providing input upstream is different than training companies to replicate the technology. Also, power generation does not have quite the same national security implications as chip manufacturing.

However, both demonstrate the complex interplay between foreign input and R&D collaboration and their role in building local capacity. This process is driven by the government’s industrial policy in China’s larger innovation strategy. This is especially true in strategic sectors where, as Chinese President Xi Jinping often laments, “primary and core technologies are controlled by others.” Each of these elements is important in achieving the political goal of technological independence.

China is an important market for foreign companies in many industries. For Siemens, China is a market of last resort as gas turbines are being replaced by renewable power generation. Market access is one of the reasons why European firms are becoming more involved with China’s innovation system, disproving simplistic narratives about “decoupling” between China and the West. Another reason is the attraction of the country’s innovation hubs, especially in emerging technology areas such as artificial intelligence.

To assess the costs and benefits of supporting China’s state-led technology localization efforts, despite the obvious advantages for China’s research partners, whether multinationals or research institutions. is becoming more difficult and urgent, especially in emerging technology areas.

Among the achievements presented at the 2019 Sino-German Technology and Innovation Cooperation Conference was an AI and brain science collaboration led by the Technical University of Berlin (TU) and the Northwestern University of Technology (NPU). Researchers have made technical achievements in applying brain-computer interfaces to drone swarm and flight control.

One of the “Seven Sons of National Defense”, the NPU belongs to the Ministry of Industry and Information Technology and is engaged in classified military research. The US Bureau of Industry and Security has been considering export controls on brain-computer interface technology. But his AI brain research in China is already progressing rapidly thanks to long-term government planning and investment.

It is impossible to fully know how much the partnership with Professor Klaus Obermeyer of the Technical University of Berlin, initiated in 2002, contributed to the PLA’s progress in the military application of AI brain technology. The outcome NPU list is certainly noteworthy.

… signed eight international cooperation agreements. Jointly established the International Collaborative Research Center for Brain-Computer Integration and its Unmanned System Applications in Shaanxi Province and the Sino-German Joint Neuroinformatics Institute of Northwest University of Technology. Completed over 20 scientific research projects. Conducted postgraduate educational assignments and joint training. … published over 60 papers, granted or applied for over 20 Chinese patents, won 16 awards, and trained over 200 graduate students.

According to the Shaanxi provincial government website, the research conducted at the two joint facilities mentioned above is aimed at applications such as medical care and disaster relief, but the NPU has supplied drones to the Chinese military and has dedicated It should be remembered that it hosts the National Defense Institute.

I am not saying that European stakeholders should uniformly stop collaborating on research and innovation with their Chinese partners. In the era of globalized value chains, policy makers need to be very careful when considering restrictions on cross-border technology flows. Overly broad regulation could undermine innovation, scientific progress and European industrial competitiveness. China’s imminent catch-up with legacy technologies like gas turbines poses little threat to European economic interests. Moreover, foreign input is only one element of her innovation strategy unique to China. Domestic entrepreneurship and industrial policy are very important.

But in a country like Germany, where long-term competitiveness may be at stake, the role of foreign R&D cooperation in supporting China’s self-reliance needs to be scrutinized more closely. . Such a partnership between the Technical University of Berlin and his NWPU is clearly at risk, not to mention national security.