China's $1.4 Trillion Plan to Topple U.S. Tech Hegemony
Beijing is looking to depose Silicon Valley by pumping an estimated $1.4 trillion into key technologies over the next 5 years. This includes everything from high-speed rail (Chinese HSR already accounts for two-thirds of the world’s total high-speed railway networks) to the roll-out of wireless networks.

President Xi is calling upon private tech giants such as Huawei, Alibaba, and Tencent, alongside niche artificial intelligence companies including SenseTime, to cooperate with local and urban governments to lay 5G wireless networks, install cameras and sensors, and develop software that will buttress automated manufacturing, mass surveillance, and autonomous driving. Maria Kwok, COO of Digital China Holdings (a former subsidiary of Lenovo), heralded this measure as “China’s gambit to win the global tech race.” Digital China Holdings is a government-backed systems integration provider, that allows users to lease a home (from over 500,000) through their smartphone.
The tech investment splurge is just one measure introduced by China’s state legislature this week, alongside a $563 billion infrastructure stimulus in response to China’s first recession in three decades. Morgan Stanley estimates the total spending on new infrastructure at $1.98 trillion over the next 11 years.
China hopes that the stimulus plan will lead to the emergence of large companies able to compete against global heavyweights. China aims to cultivate three world-leading industrial internet-of-things platforms by 2025, to compete with household names General Electric and Siemens. Equally, as tech nationalism mounts, China looks to reduce its dependence on foreign technology. Digital China is already helping the city of Changchun replace American cloud computing giants IBM and Oracle with home-grown initiatives. Earlier this year, when China Mobile awarded contracts for 37 billion RMB in 5G base stations, only 10% of the business went to Sweden’s Ericsson – with the lion’s share going to Chinese companies. It is clear that China is looking to cultivate national champions.
China certainly isn’t alone. Earlier this month, South Korea announced their “New Deal” – ushering in massive investment towards AI and wireless communications to boost growth out of the post-virus downturn. Equally, there remains concern from pundits whether this long-term strategy will stimulate China’s slowing economy. Zhu Tian, professor of economics at China Europe International Business School, claims that “It’s impossible to prop up China’s economy with new infrastructure alone.”
Naturally, there are many silent concerns that few address in fear of persecution: the curbing of civil liberties, the encroachment of government into all areas of life, the potential unemployment arising from automation, and the growing size and influence of China’s conglomerates (a similar situation toppled Korea’s economy in 1997). But for Xi, it’s certainly a bombastic declaration that will rally his supporters through this period of economic and social duress.