China’s Push for Technological Sovereignty

In 2025, China’s definition of national power extends far beyond its borders—and well beyond its military. It now encompasses code, chips, and supply chains. The new battleground is technological sovereignty: the ability to design, build, and control the technologies that underpin both economic and political influence.

Over the past year, Beijing has tightened its grip on everything from semiconductor production to the export of rare earths. In early October, the Ministry of Commerce announced new export controls on rare-earth elements, battery materials, and processing equipment, a move that sent tremors through global manufacturers. The message was clear: in a world that can weaponize supply chains, control equals security.

China’s push for chip independence is accelerating. This month, SiCarrier, a state-backed semiconductor firm, unveiled new domestic chip-design software, signaling progress toward reducing reliance on U.S. and Dutch technologies. While China still trails the cutting edge of extreme ultraviolet lithography, its firms—Huawei, SMIC, and YMTC—are rapidly closing the gap in mid-range chips that power everything from consumer electronics to AI systems.

Meanwhile, Washington’s export restrictions on advanced GPUs and lithography tools have spurred an unexpected consequence: domestic innovation at scale. Local governments are pouring subsidies into fabrication plants and AI infrastructure. The goal is no longer just technological parity—it’s insulation from Western leverage.

Beijing’s approach to AI underscores the political side of technological sovereignty. Giants like Baidu and Alibaba are rolling out domestic large language models built entirely within China’s data ecosystem. These models comply with the state’s censorship framework and data laws, ensuring that AI development aligns with political stability. It’s a reminder that China views technology not as a disruptor—but as a tool of governance and soft power.

Beyond chips and code, Beijing’s dominance in raw materials remains a geopolitical trump card. China processes over 70% of global rare earths, essential for EV batteries, wind turbines, and defense systems. With new export restrictions taking effect, Western companies are scrambling to secure alternative supplies. Goldman Sachs recently warned of “significant disruption risks” if Beijing extends these controls—a sign that economic statecraft is now being exercised through elements, not tariffs.

China’s march toward technological self-reliance is both strategic and precarious. It reduces vulnerability to sanctions but risks alienating global partners and deterring foreign capital. Still, for Beijing, dependence is the greater danger. As global supply chains fragment, China’s ambition is unmistakable: to build an economic fortress capable of thriving even in isolation.

In the 21st century, sovereignty is measured not in borders—but in bandwidth, chips, and code.