Chinese president has been airing the phrase ‘balancing development and security’ amid renewed external pressures the Chinese economy faces.
Leonardo Sobreira, from Beijing (247) – For most of Xi Jinping’s tenure at the helm of the Communist Party of China, economic development has been central to his speeches. But a cardinal shift in emphasis in the Chinese president’s most recent speeches is crystallizing. In 2015, according to a Bloomberg survey, Xi’s mentions of ‘economic development’ surpassed 3.5 times citations of ‘national security’. In 2020, the picture was the opposite: the second phrase was used 2.7 times more often than the first.
The following year, the formulation ‘balancing development and security’ was adopted as Xi Jinping’s slogan, having been used almost as often as ‘economic development’ and ‘national security’ separately. The new phrase has been spelled in several laws since then, and this Wednesday, the 12th, was quoted in the communiqué of the seventh plenary session of the 19th CPC Central Committee.
The junction between development and security was incorporated by the CCP in the midst of the US trade war, initiated by the administration of Donald Trump. In 2019, the Republican decided to increase tariffs on virtually all Chinese exports, which turned on a yellow light for party leaders.
His successor, Democrat Joe Biden, doubled down. In late August of this year, the US Commerce Department blocked the sale of advanced chips to China, temporarily hitting the Chinese artificial intelligence industry. New restrictions were applied last week targeting the supercomputing industry. Both the Democrat and the Republican converge in their desire to decouple the US economy from the Chinese one.
Some European countries take a more cautious stance, but are under pressure from the European Commission and Washington to decouple their economies from China. The European Union’s executive body last month announced the Critical Raw Materials Act, to deal with China’s growing dependence on the sector, as the US pressures the Dutch ASML to block the sale of semiconductor manufacturing equipment to China.
Despite the Chinese Foreign Ministry’s efforts to discourage economic hostilities from the West, there is a growing understanding that strategic sectors cannot be subject to foreign political instability. In this context, Xi’s speeches at the 20th National Congress of the CCP may represent a watershed, pointing out guidelines that foster the resilience of strategic sectors of the Chinese economy.
So far, ‘balance between development and security’ is a vague goal. It may involve, for example, designating new areas as relevant to national security.
In the case of semiconductors, a key sector for this objective, the cities of Shenzhen and Shanghai have started to encourage domestic companies and research institutions to use electronic design automation (EDA) tools, crucial for the production of AI chips, developed in-house.
Another significant area for national security is the medical equipment industry, currently dominated by foreign companies. In April this year, the governments of Hubei, Anhui and Shanxi Provinces and the Ningxia Autonomous Region issued notices to local hospitals demanding the exclusive use of domestically produced medical equipment and testing. In May 2021, Beijing sent hospitals a list of 315 items (including MRI, CT and X-ray equipment and endoscopes) to be sourced only from local producers.
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