As China and the U.S. are de facto embroiled in a new cold war in the high-tech field, China has launched a new campaign for self-sufficiency and innovation. “The Chinese government needs to increase support to companies, whether state-owned or private, to improve their talent cultivation and R&D capability, so that they can handle the potential threats from the trade war,” the Global Times commented. China is redoubling its efforts to achieve major technological breakthroughs. China must prepare for difficult times as the international situation is increasingly complex, President Xi Jinping said during a three-day inspection in Jiangxi province. He urged people to learn the lessons of the hardships of the past as he toured the departure site of the legendary Long March.

Huawei is already working on its own mobile operating system – “HongMeng OS” – and app store – App Gallery – to replace the Android system and may launch it later this year. On the stock market, shares of Chinese companies focusing on operating systems such as Wondertek, Bird and Nsfocus were all rising. In the field of microchips, Huawei plans to accelerate the transition form using foreign chips, such as those supplied by Qualcomm, to those developed by its own semiconductor subsidiary HiSilicon. For now, China is still for a large part dependent on foreign suppliers. In 2018, the country imported USD312.1 billion in chipsets, up about 20.8% year-on-year, while recording exports of USD84.6 billion. Under the “Made in China 2025” industrial strategy, chip-making is one of the 10 key sectors in which Beijing hopes its domestic players will catch up with global leaders and become self-sufficient by 2025. China’s imports of semiconductor chips rose 30% over four years to USD260 billion in 2017.

Last week, China unveiled the testing prototype of a new magnetic levitation train (Maglev), developed with its own technology and capable of reaching speeds of 600 km/h. High-speed trains in China now run at a speed of up to 350 km per hour. CRRC Qingdao Sifang launched a key state-level research and development program with the participation of more than 30 companies, universities and research institutes in July 2016 to develop high-speed maglev trains with homegrown intellectual property. A high-speed maglev running at 600 km/h could narrow the gap between high-speed rail and air travel. A Japanese maglev train reached 603 km/h on an experimental track in Yamanashi prefecture in 2015, and Japan plans to put its 500 km/h maglev trains into operation by 2027.

Shanghai is currently the only Chinese city operating a commercial high-speed maglev line. The Shanghai Maglev Train using German technology was put in use in 2003 on a 30 km stretch between a subway stop in Pudong and the Pudong airport.

An earlier example of how China withstood foreign pressure is provided by the China Railway Construction Corp (CRCC). “In the past, we had to import tunnel boring machines (TBMs), and relied on foreign experts to fix the machines, and they didn’t allow us to have a look at all. So what? We started from scratch and eventually built our own TBMs. Now China-made TBMs have two-thirds of global market share and we have forced foreign competitors to lower the price of their products by 40%,” the company said. China Aerospace Science and Technology Corp added: “At the beginning, we didn’t even have a chance to look at other countries’ satellites. But now, we sent Chang’e-4 to land on the far side of the moon.”

China will also increase support and subsidies for tech firms. Vice Minister for Industry and Information Technology Wang Zhijun said Washington’s recent moves to stymie Chinese firms would help those companies to cut their reliance on foreign technologies. “Recently, the U.S. has taken a series of measures to crack down on Chinese companies for political purposes. But it is in fact a good thing for Chinese firms. China’s manufacturing upgrade requires a breakthrough in key and core technologies, and we need to speed up the process,” he said. A greater emphasis on “basic research” is seen as key to China reducing its dependence on foreign technology and achieving its ambition of becoming a global technology superpower.

Meanwhile, China’s biggest chipmaker, Semiconductor Manufacturing International Corp (SMIC), plans to withdraw from the New York Stock Exchange (NYSE) by removing its American depositary receipts (ADRs) from the bourse. As reasons for the delisting, SMIC cited the low trading volumes of its ADRs and the costs of maintaining the listing and complying with reporting requirements and related laws.