SCMP "US Restrictions on China's Quantum Industry Have Limited Effect on Blocking Capital Inflow"

U.S. President Joe Biden has introduced investment restrictions on Chinese quantum technology companies alongside semiconductors and artificial intelligence (AI), but the effect of blocking American capital inflow into China is expected to be limited, according to Hong Kong's South China Morning Post (SCMP) on the 14th.

SCMP pointed out that since the Chinese authorities are leading the self-reliance in quantum technology, the U.S. government's regulatory measures on the private sector will have limited effectiveness. Quantum technology is a field slower to commercialize compared to semiconductors or AI, but once commercialized, it can exert absolute influence not only in the private sector but also in the military sector. In this regard, SCMP evaluated that "this U.S. measure essentially acknowledges that the Chinese military has modernized."

China launched the world's first quantum communication satellite, Mozi, in August 2016, and in June this year, announced that its quantum computer Jiuzhang can perform tasks generally done by AI at a speed 180 million times faster than the world's most powerful supercomputer. In response to this aggressive investment by the Chinese authorities in quantum science, the U.S. announced sanctions on 12 Chinese companies related to quantum computing in November 2021.

James Lewis, senior vice president at the U.S. Center for Strategic and International Studies (CSIS), pointed out, "This U.S. measure may make it difficult for Chinese companies to compete in the global market, but it will not limit China’s development of quantum computing technology." He added, "China has done very well on its own," and "the new regulations may slow down the pace of development somewhat, but they cannot stop the development itself."

[Image source=AP Yonhap News]

Edward Parker, a scientist at the U.S. think tank RAND Corporation, said that most of China’s quantum computing research is supported by the Chinese government rather than U.S. investments, and predicted that the advanced technology competition between the U.S. and China will continue. He told SCMP, "The impact of (U.S. regulations) on China’s quantum technology development will be quite limited," and "private companies focusing on quantum technology in China do not appear to be key players in the field."

He continued, "Most major advancements in China’s quantum technology sector come from universities and national laboratories," and "they probably receive most of their funding from the Chinese government rather than U.S. investors." He added, "Quantum computing is a strategic priority for both the U.S. and Chinese governments, but it is a very long-term game," and "even 10 years from now, we may still not know which country has won in quantum computing."

On the 9th (local time), President Biden signed an executive order regulating investments by American capital such as private equity and venture capital (VC) in China’s advanced technology sectors as part of ‘derisking’ measures to protect national security. The order designates China, along with Hong Kong and the Macao Special Administrative Regions, as so-called countries of concern, and aims to block direct investments in Chinese companies whose sales, net profits, investments, or operating expenses in three advanced sectors?semiconductors, quantum computing, and AI?account for more than 50% of their overall business.

This content was produced with the assistance of AI translation services.