China’s Three-Pronged Approach to Achieving ‘Technological Independence’ Involves Securing Raw Materials, Manufacturing Chips, and Developing AI Systems

China has worked for years with a clear technological roadmap. Its priority hasn’t been competing on equal terms with the West but reducing its exposure to outside decisions.

This strategy didn’t begin with President Donald Trump’s sanctions or the vetoes against Huawei. It predates them, but the sanctions and vetoes gave it impetus. And it continues.

Why it matters. Whoever dominates materials sets the pace. Whoever manufactures chips gains industrial autonomy, and whoever trains AI models with billions of users can export technology. China already operates at all three levels.

In detail:

→ Raw materials. China is strengthening its position at the first level by gaining access to strategic resources. It controls about 90% of rare earth processing, which is essential for manufacturing all types of technology. The Ministry of Commerce has limited exports of gallium and germanium, affecting key sectors such as solar panels, electric vehicles, and radars.

In the short term, European and U.S. industries have struggled to find substitutes. In addition to maintaining a national reserve for domestic use, China regulates its exploitation using geopolitical criteria.

→ Semiconductors. After Western vetoes, the state allocated substantial resources to its domestic industry. Huawei, blocked by the U.S., unveiled a 7-nanometer chip manufactured by SMIC, which lacks access to extreme ultraviolet lithography. It’s not cutting-edge, but it’s sufficient for now. Chinese companies already hold patents for further miniaturization.

The state semiconductor fund, created a year ago, is approaching $50 billion. Although total self-sufficiency remains distant, the system already operates without outside access.

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→ AI. Chinese tech giants are developing their own foundational models.

• Baidu: Ernie Bot
• Alibaba: Tongyi Qianwen
• Huawei: Pangu

Each model targets a different sector but falls under the national regulatory framework, which requires registration and validation of algorithms. As a result, more Chinese startups are focusing on AI, with high-impact outcomes such as DeepSeek. Direct applications in utilities, industry and education are being prioritized.

What happened. The sanctions aimed to slow China’s development but instead accelerated it. China strengthened its R&D centers, reorganized its patent system, and directed state support to the most vulnerable technologies.

The Ministry of Science and Technology has prioritized specific sectors, setting targets for AI, supercomputing, and automation.

In perspective. As covered in numerous articles, China doesn’t aim to replicate the Western model but to design its own. It wants to be self-sufficient while also serving as a global supplier—where legislation allows. Huawei’s situation after being sanctioned is a clear example.

Major Chinese tech companies aren’t competing for market share in the U.S. or Europe but in Africa, Central Asia, and Latin America, where their systems (ZTE, Huawei, BeiDou, etc.) are already in use. Access to these solutions often comes with conditions, including bundled software and infrastructure.

Between the lines. The strategy follows a sequential logic:

1. Secure resources.
2. Guarantee industrial capacity.
3. Consolidate leadership in innovation.

Each phase builds on the previous one, with every advance backed by political support.

What’s next. The next step is to consolidate the model: AI with a national identity, Chinese standards, and gradual international expansion. The government will continue to support this process.

Image | Hanny Naibaho (Unsplash)

Related | China’s Absolute Dominance Over Rare Earth Elements Comes From a Strategy That No One Else Has—Not Even the U.S.