I estimate that by 2020, international microelectronic technology will advance to producing 14-nanometer chips.1 We should be fully aware that core technologies cannot be purchased; we must rely on ourselves. Introducing each successive generation of new production capabilities from outside China is not enough to reach a globally advanced level. Our researchers must work hard. Otherwise, when it comes to core technologies, developed countries will always have us by the throat.
— Jiang Zemin, “Development of China’s IT Industry in the New Age” (2008)

Following last week’s passing of former Chinese leader Jiang Zemin and with the end of 2022 approaching, it feels appropriate to look back into the past.

Several WeChat accounts, including the official account of the Institute of International Technology and Economy, a think tank belonging to the State Council’s Development Research Center, shared a 2008 article written by Jiang Zemin titled “Development of China’s IT Industry in the New Age.”

Published in the official journal of Shanghai Jiaotong University, this is an 18-page academic article that examines the rise of China’s IT industry, discusses key technologies, and offers policy suggestions for China’s future technological growth. While the piece largely maintains an objective perspective, Jiang’s concern (and ultimately, his optimism) for China’s technological future pokes through now and then, as seen in the opening of this article.

From our vantage point in 2022, this article offers a look back into a period when China’s tech ecosystem was beginning to truly boom, and it also lets us examine some predictions and observations by one of the most influential figures in PRC history and see how many of his thoughts still ring true today.

Below is Jiang’s summary of the article, taken from the abstract:

China should take further steps to leverage the IT industry’s effects as a “multiplier” for the economy, a “converter” for methods of development, and a “booster” for upgrading industries. It should persist in upholding independent innovation, openness and compatibility, fusion, military-civilian interaction, guidance by the market, and breakthrough development as its guidelines. Using informatization to drive industrialization while also using industrialization to drive informatization, China should proceed down a path of IT industry development with Chinese characteristics.

Below are some selections from the article that roughly present a look at the past of China’s IT industry and (from the perspective of 2008) its future. (Note that all block quotes in this article are taken from Jiang Zemin’s piece.)

A Brief History of China’s IT development

The electronics industry is one of China’s earliest industries to use foreign capital. Opening up to the outside world drove this country’s electronics industry to integrate into the international division of labor…
The IT industry is an industry that brings together capital, technology, and intellect. Accelerating China’s opening up is an inevitable choice for ameliorating its lack of capital and increasing its technological capabilities.

Jiang devotes a significant section of this article to recounting China’s technological growth during the 1980s, 1990s, and 2000s, and its relation to economic factors as well as government policies.

In 1983, China set its sights on developing its electronics industry. It set a goal for the industry’s gross output in 2000 to triple that of 1980. By 1990, consumer electronics made up more than half of China’s electronics industry’s gross output, which was seven times as large as it had been in 1980. In addition, the government supported work on key technologies such as integrated circuits, computers, and stored program control. By the 1990s, the electronics industry had established itself as a “pillar industry.”

This period marked a key transformation in how China’s electronics industry was managed. From the founding of the People’s Republic of China through the 1980s, the enterprises that made up the country’s electronics industry were largely part of its planned economy. However, with the 1986 reforms, the line between the state and enterprise was demarcated more clearly. Diversity was introduced beyond the state-owned enterprise model, and businesses had more say in how they managed themselves.

In 1992, Jiang personally introduced China’s “socialist market economy,” which continued the momentum started by Deng’s previous reforms. In the article, he describes this as a period in which the electronics industry’s market reform accelerated. China established its stock market through the opening of the Shanghai and Shenzhen stock exchanges, and it built a modern corporate system. A multitude of companies — state-owned, privately run, and foreign-owned alike — flourished amid this competition.

Policies were created to spur the growth of technology such as mobile communications, software, and integrated circuits. Responding to market demands, the microelectronics, computing, and communications industries saw comprehensive growth, particularly in the areas of software and information. By 2000, electronics had become a core industry for China’s economy.

In the 21st century, the state had proposed a developmental strategy to blaze a fresh trail for its industrialization: namely, to drive industrialization through informatization and drive informatization through industrialization. In addition, it prioritized development in the information industry and broadly applied information technologies throughout the economic and social spheres. At the time that Jiang wrote this piece, China led the world in manufacturing electronic and information products.2

Looking Forward

The present and coming days mark a strategic opportunity in which China can come into its own.

In the last couple of sections, Jiang turns his focus to China’s upcoming technological development.

He lists some of China’s contemporary strategic priorities:

Focusing on the cutting edge of technology and taking hold of intellectual property rights
Giving full play to the advantages of China’s domestic market, driving industry development through application
Continuing to develop while opening up, and increasing China’s status within the international division of labor
Focusing on the chain reaction between the government and the market, and giving full play to the advantages of accomplishing great tasks through centralized power

Jiang also lists some strategic technologies, including microelectronics, high-efficiency computing, software, networking, and essential components and materials. In these sections, he advocates for increasing R&D into GPUs and states that the SaaS paradigm presents China with a one-of-a-kind opportunity to address specific issues across various industries. He also makes a point for greater research into and deployment of ubiquitous networks, a concept heavily linked to IoT, stating that the next generation of networking in China should consist of a “cross-network, seamless, and omnipresent ubiquitous web.”

The article’s final section discusses several strategies for developing China’s IT industry. Some of these points were realized in Jiang’s lifetime, such as advances in domestic technology and products. Others, such as the training of industry talent, continue to remain state priorities:

Using national projects to achieve breakthroughs in core technologies
Encouraging the use of domestic IT products
Making great advances in telecommunications, computing, and broadcasting
Building an international base for the IT industry
Implementing financial and taxation policies that are beneficial for the development of the industry
Establishing mechanisms for venture capital to support innovation and development
Leveraging the safeguards and support provided by intellectual property rights and standards
Train a generation of industry leaders and high-tech talent
Strengthen the legal framework for the IT industry’s development

In his closing words, Jiang states his final thoughts on China’s technological future:

The top priorities of the development of China’s IT industry in the new era are to make breakthroughs in core technologies and increase its ability for innovation. Oftentimes it is not that we lack the potential to surmount obstacles, but that we lack the courage and insight to innovate. With many things, it is not that making a breakthrough is impossible, but that we lack the confidence to win. From an objective view of the development of China’s IT industry, one can find an accumulation of ability; it is reasonable to expect a breakthrough to emerge. As China continues down the path of IT industry development with Chinese characteristics, it will certainly be able to enter the ranks of the world’s IT powers.

1

The industry moved even more quickly than this, as 5 nm chips entered production in 2020.

2

According to the accompanying chart, the gross value of electronics and information product manufacturing in China was $359.43 billion (USD), with a 19% annual growth rate. Ranking second was the United States with a gross value of about $283.36 billion, and behind the US was Japan, whose gross manufacturing output was $187.56 billion.

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