China pledged to pool together all of the nation’s resources to achieve self-reliance in technology, underscoring the government’s determination to secure key breakthroughs in areas such as semiconductors as tensions with the US escalate.

In his government work report released at the start of the annual National People’s Congress on Sunday, outgoing Premier Li Keqiang reiterated the call for a “whole nation strategy” to edge out Washington on basic scientific research and advanced technologies ranging from advanced intelligence to space. His remarks come days after the Biden administration blacklisted more Chinese companies in the chip and genome industries.

“The new system for mobilising resources nationwide should be improved,” Li said. “We should better leverage the role of the government in pooling resources to make key technological breakthroughs, and enterprises should be the principal actors in innovation.”

Li’s speech, along with recent calls from Chinese President Xi Jinping, signals the top leadership’s determination to break choke points for an upper hand in the tech war with the US. Choke points refers to key technologies to make things like chips or jet engines that China lacks and the US and other nations control.

China should encourage private capital to collaborate on major government initiatives and projects aimed at addressing areas of weakness, Li said. Having “effectively countered external attempts to suppress and contain China’s development” in the past five years, China should “pool quality resources and make concerted efforts” to achieve breakthroughs in key technology fields in the future, he said.

The Chinese government’s hefty investment in the chip industry has borne little fruit in recent years, with technology champions from Huawei Technologies to Semiconductor Manufacturing International struggling to advance their chip technologies following US blacklisting. Sanction-hit Yangtze Memory Technologies, the country’s best shot to make memory chips for smartphones and computers, is also having trouble expanding capacity despite receiving additional state capital.

Xi has ordered the ruling Communist Party to exercise more control over the country’s science and technology agenda, paving the way for the creation of an even more powerful overseer to steer strategically critical industries.  — Bloomberg