[🇨🇳] China----News & Views

[Saif]

China’s bold move to bypass Western tech dominance

Washington’s continued restrictions on exporting chip technology to Beijing may soon prove futile.

www.thedailystar.net

China’s bold move to bypass Western tech dominance

China's CNT gambit represents more than just a response to export controls—it reflects a maturing approach to innovation. PHOTO: REUTERS

Washington's continued restrictions on exporting chip technology to Beijing may soon prove futile because the silicon-based semiconductor industry faces a potent adversary taking shape in China. After decades of silicon dominance, carbon nanotubes are emerging as a promising alternative to transform computing power while dramatically reducing energy consumption. This technological shift may also fundamentally alter the global tech competition, with China charting its innovative path rather than following in Western footsteps.

Traditional silicon chips have improved steadily for decades, following Moore's Law by doubling transistor density roughly every two years. But we're approaching physical barriers that silicon cannot overcome. Modern chips leak electricity and generate excessive heat as transistors shrink to atomic scales, creating serious efficiency problems.

This limitation is particularly problematic for artificial intelligence applications. The New York Times reported that training a single advanced AI model can consume as much electricity as 100 American households use annually.

Carbon nanotubes (CNT)—microscopic cylinders of carbon atoms—offer a compelling alternative with remarkable advantages. First, they conduct electricity far better than silicon. Second, they manage heat more efficiently. Third, they can operate with up to 90 percent less energy. Fourth, they function at smaller scales than silicon can achieve.

According to a recent analysis by The Wall Street Journal, CNT represents not just an improvement in chip technology but potentially a fundamentally different approach to computing architecture.

The emergence of CNT coincides with escalating US-China technology tensions. As Foreign Policy magazine detailed, since 2018, Washington has implemented increasingly stricter controls on selling advanced semiconductors and related technologies to China. But rather than simply attempting to catch up in these areas, China appears to be charting an entirely different course—one focused on leapfrogging current technology. Researchers at Peking University demonstrated carbon nanotube transistors that rival advanced silicon chips while using significantly less power. Besides, the Chinese Academy of Sciences has achieved breakthroughs in solving critical manufacturing challenges.

This approach mirrors China's mobile technology strategy of the early 2000s. It leapfrogged to mobile networks rather than building extensive landline infrastructure as Western countries once did. This technological leap allowed China to bypass decades of development and emerge as a mobile technology leader.

Japan followed a similar path in the 1970s and 1980s. Instead of copying American manufacturing methods, its automakers pioneered lean production techniques that revolutionised the industry. The Harvard Business Review documented how this independent approach transformed Japan from a technological follower to a leader in just one generation. History shows that the most successful technological challengers didn't follow the established path—they found a new one. China's focus on CNT without replicating silicon manufacturing follows this historical pattern.

However, despite promising developments, bringing CNT chips to market presents formidable challenges. First, manufacturing consistency at the industrial scale remains difficult. Second, integration with existing computing architectures requires significant adaptation. Third, building an entirely new supply chain takes time and massive investment. Continued American investment in research and innovation also poses challenges. MIT Technology Review reports that IBM and Intel are pursuing CNT research, while venture capital firms fund several startups focusing on this area.

All these suggest that Washington's restrictions may have inadvertently accelerated Beijing's investment in alternative technologies that could eventually surpass the very technologies being withheld. Any technological divergence could reshape global computing architectures and standards. Devices and systems might develop along increasingly separate paths with different optimisation priorities and capabilities. This potential bifurcation raises important strategic questions about technology adoption, compatibility, and long-term planning for businesses and governments worldwide.

China's CNT gambit represents more than just a response to export controls—it reflects a maturing approach to innovation. Rather than following the established technological roadmap, China is increasingly willing to chart its course. One such example is the launch of DeepSeek, which shook American stock markets to the core.

As we've seen throughout industrial history, technological leapfrogging often succeeds precisely because legacy approaches don't constrain it. From Japan's manufacturing revolution to South Korea's semiconductor rise, countries that find alternative paths frequently move faster than established leaders expect. The most effective technological strategies rarely involve simply catching up—they must find a different way forward, including developing newer technologies and charting different trajectories. China's focus on post-silicon computing suggests it has internalised this lesson.

Whether CNT fulfils its promise or other alternatives emerge, one thing is clear: the future of computing will be shaped not by who can build the best chips under prevailing paradigms but who can pioneer entirely new ones. More DeepSeek moments could be just around the corner.

Dr Sayeed Ahmed is a consulting engineer and the CEO of Bayside Analytix, a technology-focused strategy and management consulting organisation.​

 

[Saif]

China’s automakers will lead a race to the bottom

Donald Trump’s global trade war is set to heat up competition outside the world’s two largest auto markets, China and the United States. Yet both the People’s Republic and Detroit will share in the pain. Washington had locked Chinese carmakers out of America before the US preside

thefinancialexpress.com.bd

China’s automakers will lead a race to the bottom
REUTERS
Published :
May 01, 2025 21:57
Updated :
May 01, 2025 21:57

A BYD Sealion 06 electric vehicle (EV) is displayed alongside a BYD Sealion 05 DM-i during a media day for the Auto Shanghai show in Shanghai, China Apr 23, 2025. Photo : REUTERS/Go Nakamura

Donald Trump’s global trade war is set to heat up competition outside the world’s two largest auto markets, China and the United States. Yet both the People’s Republic and Detroit will share in the pain.

Washington had locked Chinese carmakers out of America before the US president slapped 25 per cent tariffs on auto imports this month. Though Trump on Tuesday agreed to prevent auto tariffs from stacking on top of other duties and to offer local manufacturers some relief from charges on imported parts, his double-digit levies on vehicles will nonetheless force companies like GM, Toyota, and Hyundai, into a race to grab market share in other regions.

That spells trouble for China. Autos are a growth engine, accounting for 10 per cent of the country’s GDP and 6.5 per cent of exports last year, according to Tommy Wu, senior economist at Commerzbank. They also are a symbol of China Inc’s ability to keep factories humming at home and to achieve technological dominance overseas.

In China, domestic demand for cars was already weak. BYD, Geely, SAIC and compatriots sent nearly 6 million vehicles abroad last year, a 19 per cent year-on-year increase. Overall, automakers in the country have capacity to supply half market of about 90 million.

Now, Washington’s broader trade assault against China could leave carmakers with even fewer buyers in the Middle Kingdom. At the opening of the Shanghai auto show last week, Chinese automakers, suppliers, and software providers told Breakingviews that their focus this year will be on selling more elsewhere.

Chart shows that exports account for a growing per centage of China's sales of internal combustion engine passenger vehicles, whereas exports are less significant as a proportion of electric-car sales.

ROADBLOCKS

That strategy looks increasingly fraught. Russia, the biggest overseas market for Chinese marques, is turning hostile to outsiders too. In the wake of the Ukraine conflict, Made-in-China cars flooded into the eastern European country to fill the void left following hurried exits by Western rivals including Toyota, Volkswagen, and Stellantis.

By last year, Chinese peers including Geely and Great Wall, accounted for more than half, of the Russian market, and these sales alone made up around a fifth of China’s auto exports, per Rhodium, a New York-based research group. Beginning in 2025, however, Moscow introduced quasi-tariffs by hiking a recycling fee for each vehicle sold. Local brands can reimburse this fee. Foreign ones cannot.

China’s auto exports to Russia in the first two months of the year amounted to around 60,000 vehicles, suggesting the first quarter total will fall far short of the roughly 170,000 Chinese exports tallied over the same period last year, per International Trade Centre data. It’s a sour commercial outcome for China whose foreign minister, Wang Yi, during a trip to Moscow in April described the duo as “friends forever, never enemies”.

Of course, the US and Russia aren’t the only ones erecting barriers to China’s automaking might. Turkey, Brazil and the European Union are among those attempting to put up walls too. The bloc increased tariffs on Chinese-built electric vehicles to as much as 45.3 per cent last October.

Only a handful of countries that do not have sizeable auto brands or local manufacturing to safeguard are truly open to Chinese imports. These include Australia, Norway, and Saudi Arabia. The UK also remains an opportunity for now because it has not matched Brussels’s tariffs on electric vehicles. In total, the cluster of economies that welcome Chinese carmakers probably represents around 10 million in combined annual sales, per Rhodium.

CHERY ON TOP

Sending cars to these dozens of small, fragmented markets is hard work, but one Chinese company is making a success of it. Anhui-based Chery sold its first car abroad in 2001 and has expanded to sell vehicles in more than 100 countries, becoming China’s largest auto exporter, according to a prospectus, for its planned initial public offering in Hong Kong. In the first nine months of 2024, the state-owned company’s overseas sales rose by more than 35 per cent to 80 billion yuan and the group achieved a pre-tax margin of over 7 per cent, similar to General Motors.

However, it has never cracked the United States, and many of its individual markets are tiny. This strategy is like trying to strip meagre meat from chicken ribs, says Yu Zhang, founder of Shanghai-based consultancy AutoForesight. Chery’s total sales are dwarfed by the nearly $180 billion revenue GM reported for the full year 2024.

Chart shows that China's auto exports are well diversified, and major markets include Russia, Central and South America, Middle East, Africa and the European Union, among others.

As others try to emulate Chery, competition in these modest markets will intensify. And, here, the Detroit 3’s global footprint overlaps with Chinese exporters’ targets: only around 40 per cent of Stellantis’ sales are in North America; nearly a third of Ford’s, and about a fifth of GM’s are outside the US, per LSEG.

Europe is Ford and Stellantis’ largest market beyond the United States. South America is the next largest for Stellantis, and GM has sizeable operations there too. Places like Mexico, where internal combustion engines are still popular, will become key battlegrounds. Some 75 per cent of China’s exports last year were gas guzzlers.

The signs of saturation are emerging thick and fast. Analysts polled by Visible Alpha expect Ford’s South America revenue growth to slow to under 4 per cent this year, compared with 31per cent in 2024; GM and Stellantis’ South America unit sales are likewise expected to show low single-digit growth.

Meanwhile, China’s Passenger Car Association warns auto exports from the country may decline for the first time in five years. Japanese and American companies’ China sales fell by 18 per cent and 23 per cent last year, respectively, according to Automobility, a consultancy. Stellantis, Mitsubishi and Renault, have effectively left the market. GM took a $5 billion writedown in December, some of which related to plant closures in the People’s Republic. Nissan, has slashed capacity in the country too.

Shows many automakers in China are using less than half of their production capacity.

Chinese champions are due for a shakeup too. State-owned Dongfeng, which works with both Honda, used about half of its passenger vehicle capacity in 2024 and is discussing a merger with fellow state automaker Changan, one of Ford’s JV partners, for example.

The importance of the auto industry to China, though, means its carmakers are unlikely to cut capacity as quickly as global peers. State-owned enterprises are also typically less fussed about profits than their private rivals. Trump’s trade war will hurt carmakers around the world, not least the People’s Republic. But China Inc. might have a higher tolerance for pain.

[Katrina Hamlin is global production editor for Reuters, based in Hong Kong. She is also a columnist, writing on topics including autos and electric vehicles, as well as the gambling industry in Macau and Asia. Before joining Reuters in 2012, Katrina was deputy managing editor of Shanghai Business Review magazine.​