Between Development and Autonomy: China’s Fraught Progress in Semiconductors

• In Event: Trade and Security Advantage

Abstract

In the era of global production, how do the goals of industrial development and national security interact? Focusing on China’s semiconductor industry, I show that while substantial gains have been made by entrepreneurs trying to create new niches in the global chip industry, the Chinese state has allocated most resources elsewhere in an effort to achieve technological autonomy. I argue this pursuit has largely been driven by a series of events that exposed vulnerabilities, including the increasing dependence on imported chips thanks to China’s specialization as an electronics assembly hub. In addition, this pursuit has hampered sectoral development by allocating resources away from entrepreneurs, focusing on areas where catchup is extremely difficult, and antagonizing China’s relations with the U.S. This research identifies a key dilemma faced by an emerging power when the dominant power is at the center of global production networks.

Author

• Yan Xu, Brown University