China Says US Trade War and Tech Curbs
Are Accelerating Home-Grown Innovation
In the first year of new five-year plan,
party mouthpiece says list of ‘chokepoint technologies’ is narrowing
China
has shrugged off the impact of US tariffs and technology restrictions and is
strengthening its capacity for “independent innovation,” according to a
People’s Daily editorial marking the first year of the new five-year plan. The
party mouthpiece said China’s economic fundamentals remain solid and resilient
despite what it described as escalating US trade pressure and technological
suppression. It argued that external constraints have actually reduced China’s
reliance on foreign “chokepoint technologies” while expanding the range of
technologies under domestic control.
The
editorial cited improving economic indicators in the fourth quarter of 2025,
including prices and corporate profitability, and expressed confidence that
innovation-led, high-quality growth would continue. Official GDP data for 2025
is due on January 19, with Beijing targeting growth of around 5 per cent.
At
the same time, authorities warned against excessive competition and price wars,
particularly in sectors such as power and energy storage batteries, calling for
stronger regulation and capacity management. Tackling “involution” and boosting
technological self-reliance were reiterated as core priorities in the 15th
five-year plan.
The
commentary comes amid intensified US scrutiny of Chinese-linked investments in
semiconductors and advanced manufacturing, and as Chinese local governments,
including Shanghai, roll out large-scale investment plans to strengthen
strategic technology industries such as chips, AI, biopharma and aviation.
China’s
economy has successfully weathered mounting shocks, including US tariffs and technology
curbs, and continues to innovate despite a challenging environment, according to
the mouthpiece of the ruling Communist Party.
“Practice
has fully demonstrated that China’s economic fundamentals are solid and its resilience
strong, and that it is fully capable of withstanding rough waters and even stormy
waves,” the People’s Daily said in an editorial on Thursday, published at the start
of the first year of the new five-year plan.
Citing
the United States for “escalating multiple rounds of tariff pressure” and technological
suppression, the editorial argued that China had withstood the impact of the trade
war and had “responded with composure and pressed ahead”.
“The
more the US seeks to suppress and contain us, the more it stimulates our capacity
for independent innovation.”
“The
list of ‘chokepoint’ technologies is getting shorter, while the list of technologies
that are independently controlled is getting longer.”
According
to the editorial, recent economic data had been positive, with a “clear improvement”
in indicators such as prices and corporate profitability in the fourth quarter of
2025.
“Positive
factors are continuing to build up, and the favourable momentum of China’s economic
development towards innovation and higher-quality growth will continue.”
The
National Bureau of Statistics is expected to release annual economic data for 2025
on January 19, including preliminary figures for gross domestic product growth.
Beijing set the annual target at “around 5 per cent”.
The
editorial is the second to be published under the pen name “Zhong Caiping”, a pseudonym that resembles one seen as representing
the Central Financial and Economic Affairs Commission, a top-level party body.
The
earlier commentary, published on Wednesday, warned local governments to avoid the
herd behaviour that risks fuelling “involution” – the fierce competition that has
driven down prices across several industries.
Also
on Wednesday, four government departments, including the Ministry of Industry and
Information Technology, held a symposium with the power and energy storage battery
industry. The ministry said it had warned that irrational competition – including
price wars – is undermining the sector’s long-term sustainability.
To
rein in excessive competition, the government has called for stronger market regulation,
tighter capacity management, greater industry self-discipline and coordinated policy
guidance from central and local authorities.
Beijing
also vowed to address involution in a proposal for the 15th five-year plan, published
in October, in which policymakers set “technological self-reliance and self-strengthening”
as a crucial goal amid the intensifying US-China tech rivalry.
On
January 2, US President Donald Trump ordered the divestment of semiconductor-related
assets acquired by a Delaware-registered firm, which he said is controlled by a
Chinese citizen and poses a national security risk. The move was the latest by Washington
as it intensifies scrutiny of Chinese-linked investments in sensitive chip and advanced
manufacturing sectors.
Local
governments in China, meanwhile, are racing to roll out plans to bolster their tech
sectors, with eastern financial hub Shanghai among the latest.
On
Monday, the city’s Pudong district announced 50 major projects worth more than 70
billion yuan (US$10 billion) in total, with most of the investment earmarked for
critical industries including microchips, artificial intelligence, biopharmaceuticals,
smart vehicles and aviation.