Xi Jinping Puts ‘Indigenous Innovation’ and ‘Core Technologies’ at the Center of Development Priorities

In a recent speech on cyberspace and information technologies, Chinese leader Xi Jinping updated his guidance and goals for industrial policy, cybersecurity, and sociopolitical aspects of the Internet—presenting his view that technology is an “important instrument of the state.” And in a follow-up visit to high-tech facilities, Xi stood defiant in the face of potential limits on tech industry ties with the United States and elsewhere, calling for “self-reliance” and cheering China’s Cold War achievements under conditions of industrial isolation.

Viewed in a trajectory of related authoritative statements, the speech signaled increased emphasis on indigenous development. The timing of the speech called out for comparison, taking place on April 20, two years and a day after a 2016 speech at a similar gathering that became known in Chinese shorthand as the “4.19 speech.” The text of the new “4.20 speech” has not been published, but DigiChina’s full translation of the most complete public accounting of the speech reveals notable rhetorical innovations and iterations.

Xi’s “4.20” speech took place in the context of an escalating, multilayered dispute between China and the United States over industrial, trade, and investment policy in which the digital world is a primary battleground. Viewed in that light, Xi gave no ground, repeating the goal of building China into a cyber superpower (网络强国), and connecting that strategy explicitly to developing indigenous innovation (自主创新). Xi focused on core technologies (核心技术), a thriving digital economy, and strong controls and political work by Chinese Communist Party (CCP)  and government authorities online.

Furthering his emphasis on indigenous innovation and core technologies, Xi sent a letter to a Digital China Summit in Fuzhou, Fujian, that featured private sector leaders including Alibaba’s Jack Ma and Tencent’s Pony Ma. “A real company is not determined by its market value or market share, but how much responsibility it takes and whether it has mastered core and key technologies,” Alibaba’s Ma reportedly said. Xi then took to the road, visiting Wuhan, Hubei, where he stopped at a high-tech development zone and visited businesses developing semiconductor and fiber-optic technology.

Amidst a top-level audience, Wang Huning’s role confirmed

In the conventions of CCP and Chinese state gatherings, the intended importance of a meeting is signaled in part by the attendees. All indications are that Xi’s 4.20 speech was designed for maximum impact. All seven members of the new Politburo Standing Committee were in attendance at the two-day event, which also included leaders of major state-owned enterprises.

Premier Li Keqiang and the Party’s chief ideologue, Wang Huning, both gave speeches—and the Xinhua report named Wang for the first time as a deputy director of the newly elevated Central Commission for Cybersecurity and Informatization. This confirms analysis, based on Wang’s speech at the December 2017 Wuzhen World Internet Conference (transcribed and translated by DigiChina) that Wang would be a major player in Xi’s new cyberspace governance lineup.

Xi’s lengthening legacy of cyberspace policy statements

Xi and the group of senior advisors who contribute to his speeches on cyberspace issues have come up with a growing set of catchphrases, new terms, and novel formulations to capture the leader’s vision of China’s digital destiny. Together, these “important speeches” are regularly cited and praised by other senior leaders, and they have become part of the bedrock of plans and rhetorical material that every policy move in the ICT sector, and sometimes beyond, is expected to support.

Here is a timeline of Xi’s most important speeches in this field:

February 2014 - Announcing the new Central Leading Group on Cybersecurity and Informatization

• “Without cybersecurity there is no national security; without informatization, there is no modernization” (没有网络安全就没有国家安全，没有信息化就没有现代化).

• “Cybersecurity and informatization are two wings of one body, and two wheels of one engine” (网络安全和信息化是一体之两翼、驱动之双轮).

• The strategy of “building China into a cyber superpower” (把我国建设成为网络强国).

December 2015 - Speech at the Second World Internet Conference in Wuzhen

• “Community of shared destiny in cyberspace” (网络空间命运共同体)

• “Five propositions” and “four principles” related to China’s views on international cyberspace and Internet governance (see appendix here).

April 2016 - ‘4.19’ Speech at the first Cybersecurity and Informatization Work Conference

• “Core technology” (核心技术) is raised frequently.

• “National responsibility of Internet companies” (互联网企业的国家责任).

April 2018 - ‘4.20’ Speech at a second Cybersecurity and Informatization Work Conference

• “Comprehensive network governance capabilities” (网络综合治理能力).  
  A new catch-all phrase for the hierarchy of roles and responsibilities in Xi’s whole-of-society effort to build a ‘cyber superpower,’ in which the party plays a leading role.

• “Core technologies” as “important instruments of the state” (核心技术是国之重器).

• “Strengthen civil-military integration in the cybersecurity and informatization domain” (加强网信领域军民融合).
  While not altogether a new formulation—”civil-military integration” as a concept has been around since Deng Xiaoping—this may be the first time Xi has mentioned civil-military integration in a major speech on ICT work, suggesting that PLA procurement and R&D needs are now a priority of the newly elevated Central Commission for Cybersecurity and Informatization.

• “Move forward the construction of China as a cyber superpower through indigenous innovation” (自主创新推进网络强国建设).

• “Without cybersecurity, there is no national security, the economy and society will not operate in a stable manner, and the broad popular masses’ interests will be difficult to guarantee.” (没有网络安全就没有国家安全，就没有经济社会稳定运行，广大人民群众利益也难以得到保障).

• “Correct cybersecurity view” (正确的网络安全观).

Increased emphasis on ‘core technologies’

In what appears to be a novel twist of phrase, Xi in last month’s 4.20 speech said “core technologies are important instruments of the state”  (国之重器). The term we translate as “important instruments” has the sense of both a tool and a weapon. In other words, integrated circuits and operating systems, rather than being merely commercial products churned out by profit-driven firms, actually constitute instruments of national power—whether employed for domestic stability, international security, or economic leadership.

The charge to develop core technologies in service of state priorities builds on a longstanding theme in Chinese thinking on cybersecurity and informatization: Domestically produced core technologies, based on homegrown intellectual property and free of foreign control or dependency, have been presented as crucial to constructing a cyber superpower since Xi’s 4.19 speech in 2016.

But what is a “core technology,” other than something to which the Xi government seeks to secure China’s autonomous access? In the 4.19 speech, Xi described core technologies as falling into three categories: “The first is basic technology, commonly used technology. The second is asymmetric technology, or ‘trump card’ technology. The third is advanced technology, or disruptive technology.”

Still, there is no definitive list of what Xi and industry leaders mean by core technology, but rather a shifting list based on situation and technological development. A partial list of ICT technologies almost surely considered “core” would include cryptography, certain types of advanced semiconductors (such as those the U.S. has announced will be denied to the Chinese firm ZTE), advanced memory circuits, server technology, and a growing list of software, including operating systems, enterprise-level database software, cybersecurity software, cloud systems, and lately both hardware and algorithms that power advanced artificial intelligence systems.

Priming a domestic audience and doubling down in the face of potential cut-off from U.S. technology

When Xi visited Hubei Province after the 4.20 speech, he made a symbolically important stop at a subsidiary to the integrated circuit (IC) company Yangtze Memory Technologies Co. (YMTC), which describes itself as a joint effort by the National IC Fund (see Sec. V here), Hubei IC funds, and Tsinghua Unigroup, which is led by Xi-connected executive Zhao Weiguo.

Xi also visited China’s “fiber-optic valley” in the Wuhan area, marking one of the industries in which China’s drive to become less dependent on foreign suppliers could be considered most successful. There, Xi asked businesses to “strengthen their Party-building work, and use Party building as a guide to promote enterprise innovation and development.”

During his tour, Xi projected a siege mentality toward current U.S. action against China, as he expounded on the central theme of his 4.20 speech. He reminded his audience that China had endured foreign blockades in the past, and had practiced “self-reliance” while the Chinese people had “tightened their belts” and “grit their teeth” in order to build “two bombs, one satellite” (两弹一星)—a reference to China’s atomic bomb and missile programs in the 1960s. In this case, the foreign blockade that China may face is not based in the Cold War, but in a deep potential fissure between Chinese and U.S. science and technology industrial bases. The next step, Xi said, would be to “cast aside illusions and rely on ourselves.”

What “illusions” does Xi believe China must abandon? The illusion that technology is not an instrument of national power? The illusion of a global and interoperable tech commons? Regardless, Xi’s speeches, both in Wuhan and at the 4.20 work conference, show that Xi is doubling down, not stepping back in the face of U.S. actions. The tone of the speeches gives Xi little leeway to substantially roll back industrial policies like Made in China 2025 and the National IC Fund that have borne the brunt of U.S. and other criticism generally and the U.S. Trade Representative’s Section 301 investigation report in particular. Xi has set expectations for the Chinese public that their government will not relent in efforts to reduce technological dependence, and international observers should take note.