Quantum technology is set to transform the global economy by revolutionizing computing, communications, and measurement. As this technology advances, the United States must closely monitor China's quantum ecosystem, which is heavily supported by the government's top-down approach, according to experts at the Special Competitive Studies Project (SCSP), a nonprofit and nonpartisan initiative focused on strengthening America's competitiveness in AI and other critical technologies.
Quantum technology involves the physics of subatomic particles and is not new, but recent hardware and software advancements allow for broader applications. Potential uses include quantum navigation systems that could reduce GPS vulnerabilities like outages and cyberattacks, quantum networks for secure information transfer, and quantum computing to accelerate scientific research or optimize supply chains.
Developing quantum technology requires a comprehensive ecosystem involving supply chains for semiconductors, nanotechnology, and photonics, as well as collaboration among tech companies, academia, government agencies, and startups. According to SCSP experts, China currently has an expansive, state-backed quantum ecosystem. Data from Datenna, an intelligence platform analyzing Chinese primary data, shows that state-affiliated telecom giants, particularly China Telecom, fund a network of quantum startups. Many of these firms originate from state laboratories or university research groups, where Beijing retains influence through funding, ownership, procurement, or institutional ties, noted Dr. Damien Bérubé, a researcher in Emerging Technology Policy and Quantum Science.
In a recent SCSP newsletter, Bérubé highlighted how Datenna data estimates China's quantum technology activities. The data indicates that China is creating demand for quantum technology before the market can sustain itself, using state-backed customers and government subsidies to help domestic companies build up before competing globally. For instance, the Chinese quantum firm Origin Quantum received support from the Chinese Academy of Sciences and is now preparing for an IPO with a valuation of approximately $1 billion, according to Datenna.
SCSP experts caution that while Chinese quantum companies do not pose an immediate risk of replacing U.S. and allied firms in every high-end market, Chinese suppliers that can survive on protected domestic demand will eventually enter foreign markets at lower prices. They concluded, "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."
For more information, visit scsp.ai.
