AI, Apps, Cars: Is China Taking the Lead in Tech?

The rise of Chinese AI chatbot DeepSeek has taken the world by storm. But it’s part of a wider trend: Chinese apps are rising up the charts around the world. TikTok, CapCut, Shein, Temu – to name a few. And it's not just on our phones. China is becoming dominant in many other areas of tech.

China's Dominance Across Key Sectors

• Cars: China has overtaken the previous epicenters of motoring, selling more than any other country thanks to hit electric car makers like BYD. A lot of the success comes from China being the world’s biggest battery maker now too.
• Solar Panels: China is responsible for an estimated 80‑95% of the global supply chain. By 2028 it’s predicted that 60% of the world’s renewable energy will be generated in China.
• Drones: In drones too China rules the skies. Next time you hear that buzzing above your head, there's a 70% chance it's a DJI drone made in the city of Shenzhen. Three of the world's top ten drone makers are Chinese.
• Quantum Computing: In the futuristic world of quantum computers, Chinese scientists publish more quantum-related research papers annually than any other country. They're even ahead of the general leaders, the US, in some areas of quantum computing development.
• Artificial Intelligence (AI): It's the same picture in AI. Chinese AI firms now issue more patents than any other country. The rise of DeepSeek shows it's capable of challenging the dominant US giants with products too.

The "Made in China 2025" Strategy

So how has China done all this? Well, it's all part of a long term plan. In 2015, the Chinese government set out an ambitious project called Made in China 2025. It wanted to move away from being the world's factory for low cost goods, to a global tech leader responsible for its own supply chain of cutting edge tech.

Made in China 2025 was largely very successful. In many industries China is catching up with the leading edge, and in some industries China is even leading. Ev Cars, 5G, Batteries, Solar Energies. Even in Gen AI, China has become one of the players.

Across ten target technologies the plan set out more than 250 mini goals. According to analysis from South China Morning Post, 86% of them have been ticked off. Some targets, like electric vehicles and renewable energy production, have far exceeded the targets. Made in China 2025 has been hailed a success by many analysts.

How China Achieved Its Ambitions

China has been moderately successful, and some would say incredibly successful, at using its state-backed capitalism system. The government really sets a research agenda, sets a funding agenda. This includes bringing foreign researchers and enticing them to stay in China, or at least to give their innovations and ideas over to Chinese companies. Another tool is requiring businesses from outside of China oftentimes to set up joint ventures with Chinese ventures.

According to US Congress research, the Chinese government planned to raise or spend US$ 1.5 trillion on grants for research, development or buying foreign companies. More than US$ 627 billion had been spent by 2020. Research centers sprung up in city hubs centered around various technologies.

Challenges, Accusations, and Responses

The US and its allies have accused China of shortcutting some of its tech innovation by stealing intellectual property through hacking, for example, from US aircraft makers. China has always denied this.

Made in China 2025 got so successful that after just a few years the government stopped using the term, as it was antagonizing rivals. But it was too late. Over the years, the West have imposed restrictions and sanctions on China regarding sensitive technologies. This huge external threat has awakened the Chinese and forced them to pursue a self-sufficiency strategy in advanced technology. As an old saying in China goes: "Life always finds its own way out".

• Huawei's Resilience: Huawei is a great example of this. In around 2019 it was top of the world in 5G equipment and had a huge market share in mobile phones. However, this took a major hit when the US led widespread sanctions against the company, citing national security concerns around spying. Huawei's market share shrank and it couldn't get the microchips it needed to keep innovating. But it pivoted into microchip manufacturing and is now a major player in that too. In 2023, it released a phone with a microchip far beyond what the rest of the world thought was possible for the company or the country.
• DeepSeek's Innovation: A similar situation happened with the viral new chatbot DeepSeek. The firm says it couldn't get the most powerful chips to train its models, so it says it made do with older ones and innovated new techniques. They built the impressive bot with far less money and far less kit.
• US Wake-up Call: For the US it came as a shock. DeepSeek, AI from a Chinese company, should be a wake up call for industries to be laser-focused and competing to win.
• TikTok's Success & Scrutiny: TikTok too has taken the West by surprise. It's the first non-US social network to succeed in the last ten years. Its enormous success is under the spotlight, and under threat from potential intervention by the US on national security grounds.
• Shein and Temu's E-commerce Challenge: Shein and Temu are proving worthy challengers in e-commerce now too, thanks to combining China's cheap goods with innovative app technology.

Areas Where China is Still Catching Up

However, China hasn't succeeded in all its 2025 goals. It's still years behind other countries in chipmaking, with progress set to get even worse thanks to more sanctions and controls. Plus, the US government and private firms are throwing hundreds of billions of dollars into staying ahead in chip tech. This increased research and development funding is going to ensure the United States leads the world in the industries of the future. In January, the US celebrated a commitment from tech giants to invest a potential US$ 500 billion into infrastructure for AI. Other industrialised countries like Germany and Japan have also launched counter plans too.

But there’s no doubt a new high tech leader has emerged with big ambitions, deep pockets and plenty of patience.