An Inside Look at China’s Quantum Ecosystem

(NewsUSA) - Quantum technology is poised to permeate all corners of the global economy by dramatically changing the way the world computes, transmits, and measures information when compared to current conventional methods.  As the technology evolves, the United States must keep an eye on the quantum ecosystem in China, and how the government’s top-down approach is likely to impact quantum research and development, according to experts at the Special Competitive Studies Project (SCSP), a nonprofit and nonpartisan initiative with a goal of making recommendations to strengthen America's long-term competitiveness in AI and other critical technologies.

The concept of quantum technology is relatively unfamiliar to those outside of the field. Simply put, quantum technology involves the physics of subatomic particles. Quantum technology is not new, but the hardware and software currently available allows for more widespread use. Potential applications include:

-Security. Quantum navigation systems, for example, could reduce current weak spots in GPS such as outages, cyberattacks, and atmospheric disruptions.

-Communications. Quantum networks could support more secure transfer of information.

- Computing. Quantum computing could accelerate scientific research or optimize supply chains by quickly finding the best solution among thousands of possibilities.

Quantum technology demands the support of an entire ecosystem, with supply chains for semiconductors, nanotechnology, and photonics, among other areas, and involves collaboration among technology companies, academic institutions, government research agencies, and related startups. Currently, China has an expansive and state-backed quantum ecosystem, according to SCSP experts. Information from Datenna, an intelligence platform designed to analyze primary data from China at scale, shows multiple state-affiliated telecom giants, with China Telecom at the center, that fund a network of quantum startups. “Many of these firms trace their origins to state laboratories or university research groups, where Beijing retains influence through funding, ownership, procurement, or institutional ties,” according to Dr. Damien Bérubé, a researcher in Emerging Technology Policy and Quantum Science.

In a recent SCSP newsletter, Bérubé highlighted how Datenna data helps estimate China’s quantum technology activities. According to the data, China is creating demand for quantum technology before the market can sustain itself, which means that state-backed customers and government subsidies are helping Chinese companies build themselves up before competing on the world stage. For example, the Chinese quantum firm Origin Quantum was supported by funding from the Chinese Academy of Sciences (CAS) and is now preparing for an IPO with a valuation of approximately $1 billion, according to Datenna information.

The rise of Chinese quantum technology companies does not pose an immediate risk of replacing U.S. and allied firms in every high-end market, according to SCSP experts. Instead, Chinese suppliers that can survive on protected domestic demand will ultimately enter foreign markets at lower prices, they said.

“A network map of these contracts should therefore be read less as a list of isolated transactions and more as an industrial policy map: which buyers sustain certain suppliers, which sectors are receiving demand signals, and which firms are being positioned to scale,” the experts concluded.

Visit scsp.ai to learn more.