The Korea Institute of S&T Evaluation and Planning (KISTEP), led by President Tae-seog Oh, hosted the first China Innovation Strategy Forum at its headquarters in Chungbuk Innovation City on Tuesday, July 22. The forum aimed to offer fresh insights into China’s high-tech industries and to keep an ongoing conversation on innovation. Dr. Cheol Lee, an expert on China’s economy and strategic affairs, delivered a talk titled “China’s Technology Strategy and Industrial Vision through the Lens of ‘New Quality Productive Forces’.”

In his opening remarks, President Oh said, “We often benchmark advanced economies like the U.S., the EU and Japan, but we tend to copy isolated cases without understanding their institutions and context.” Urging a sober view of the pace of Chinese innovation under the Communist Party-led socialist system in which the state and the private sector move in lockstep, he stressed that “what we need is not simple benchmarking but a deeper understanding of China.” He expressed hope that the forum would help Korea gain a comprehensive understanding of China’s strategies and explore policy directions suited to Korea’s circumstances.

△ Tae-seog Oh, President of KISTEP, delivering opening remarks

In his presentation, Dr. Cheol Lee argued that China is pursuing technology development strategies in the energy and digital sectors—both central to its national strategy—by integrating efforts across the military, economic and social domains. He contended that electric vehicles, AI, semiconductors and energy self-sufficiency are central instruments for both pursuing what Beijing calls “reunification” with Taiwan and countering U.S. influence. According to Dr. Lee, Xi Jinping has declared a shift toward “New Quality Productive Forces” to move the economy into higher-value-added industries through technological innovation and to “leapfrog the U.S.” under the 15th Five-Year Plan (2026-2030). He urged Korea to craft a strategic response aligned with these developments.

△ Dr. Cheol Lee delivering his presentation

Forum Highlights

1. Origins of Party Ideology and “Chinese-Style” Reform

Understanding China’s technology strategy starts with the identity of the Communist Party and the evolution of its ideology. Unlike European Marxism, Chinese communism adapted to Asian realities, especially poverty and food scarcity. The ideology evolved from Mao Zedong’s “class struggle” to Deng Xiaoping’s “black cat, white cat” pragmatism and then to Jiang Zemin’s “Three Represents,” which expanded the Party’s legitimacy to include not just workers but also capitalists and intellectuals. Hu Jintao held office with limited real power and under Xi Jinping the current strategic line took shape.

2. Xi Jinping’s Leadership and China’s Centennial Goals

The Party set dual centennial goals: achieving a “moderately prosperous society” (xiaokang) by its 100th anniversary in 2021 and becoming a “modern socialist great power” by 2049. Dr. Lee argued that pursuing cross-Strait unification is central to achieving these goals; it is not merely a political issue but also a strategic objective directly tied to technology, defense and energy self-sufficiency. China sets quantitative targets—for air and water quality, income levels and more—and mobilizes the full range of state resources to meet them.

3. Technology Self-Reliance: De-Americanization and EV Promotion

To hedge against U.S. tech controls, China is pursuing a “Delete Plan” that instructs state-owned enterprises to phase out U.S. software and technologies by 2027 under a confidential directive known as “ No. 79.” Operating systems are to be replaced with Huawei’s HarmonyOS and chips with domestic alternatives. To reduce dependence on imported oil, Beijing has designated electric vehicles as a national strategic industry. Early quality was poor. Rapid progress followed through sustained investment, Tesla’s Gigafactory Shanghai, and fast-follower tactics such as benchmarking and reverse engineering. At Tesla’s Shanghai plant, about 95% of components are now locally sourced—a shift that attests to the success of the localization push.

4. Energy and Food Security Linked to S&T Strategy

For energy self-reliance, China is pursuing nuclear, solar and hydrogen energy alongside energy storage systems (ESS). It is rapidly electrifying transport, which uses roughly half of national oil demand, and its high-voltage direct current (HVDC) transmission is among the most advanced in the world. Hydrogen-based transport networks are under development. China is stepping up investment in agricultural science and technology (S&T) to boost food self-sufficiency. In 2023, research improving corn varieties won a national S&T award. Beijing has announced plans to reduce grain imports to one-tenth of current levels by 2030, aiming to lessen reliance on the U.S. and Brazil.

5. AI- and Data-Centric Strategy and Digital Transformation

Shocked by the emergence of ChatGPT, China has come to regard AI development as a “national strategic weapon.” It is pushing ahead with AI-chip development and data-nationalization policies. The government has established the National Data Administration, designating data as a strategic asset and bringing it under centralized state oversight. Regional data exchanges are being set up across China to collect and integrate privately held data, improving the efficiency of AI training. China has begun building an integrated system linking software-defined electric vehicles (built on a digital-layer architecture), smart roads, satellite communications (6G) and drones—with direct implications for defense readiness and military strategy.

6. Industrial Strategy: Transition to “New Quality Productive Forces” and Innovation Pressure

In the past, China drove GDP growth and employment through quantity-driven expansion, but it has run up against the limits of persistent overcapacity and a low-margin model. In response, Xi Jinping has declared a shift to “New Quality Productive Forces,” urging a transition toward higher-value-added industries through technological innovation. The Chinese Communist Party (CCP) treats technological innovation not as a mere slogan but as an imperative for national survival, tasking government S&T officials and researchers with explicit targets to overtake the U.S. In fact, the 15th Five-Year Plan (2026-2030) places surpassing the U.S. in technology at its core. China aims to realize this by mobilizing more than six million domestic STEM graduates.

7. Preparing for the Future: War-Risk Implications and Required Responses

U.S. assessments anticipate the possibility of a Chinese move to forcibly unify with Taiwan around 2030, and Washington is preparing accordingly. China is also aligning the target dates for achieving energy and food self-sufficiency with that horizon. Strategic investments in autonomous weapons, drones, smart roads and robotic production systems are being made with potential wartime applications in mind. The recently unveiled “Walker S2” industrial humanoid robot—symbolizing the move toward autonomous charging and round-the-clock production—is being deployed on actual assembly lines.

8. Conclusion: Korea’s Response Agenda

Dr. Lee emphasized that China’s S&T strategy is not merely an economic policy; it is intertwined with national strategy and a wartime-preparedness system. He argued that Korea needs policy coherence—aligning S&T policy across ministries and with industry—to enable immediate crisis response. He warned that current formalistic medium-term plans cannot support an effective response.