Bookshelf: China’s new tech titans
China’s leading tech companies are no longer the copycats of yesteryear. Contrary to many perceptions in the West, they are increasingly innovative and are challenging the West for drones, robotics, electric vehicles (EVs), advanced manufacturing, and now AI, writes Rebecca Fannin in her new book, Tech Titans of China.
China’s tech scene has evolved dramatically since Fannin’s precursor volume, in which Baidu, Alibaba and Tencent dominated the narrative. These companies have moved into emerging technology and have been joined by the next wave of Chinese tech leaders – such as ByteDance, Mituan and Xiaomi – that have leveraged China’s vast mobile Internet market to expand in China.
Fannin argues that the rise of China’s tech titans would not have happened without Silicon Valley. Silicon Valley provided the necessary talent and capital for Chinese stock market listings in the United States, mergers and acquisitions, and joint R&D. Another factor was ‘sea turtles’, Chinese students who return from overseas study to work in the tech sector.
This rich partnership came to grief as US–China competition intensified. The US has been trying to contain China’s rise as a tech powerhouse and curb its influence by cracking down on Silicon Valley’s investments in China and imposing manifold barriers to imports and exports. In particular, the US has been imposing restrictions on Chinese access to semiconductors and other high-tech components. But this seems to be backfiring, as it has only stimulated Chinese innovation, according to Fannin.
Most notably, the US has also virtually barred the entry of Chinese EVs into the American market, mainly due to concerns about data privacy. At the same time, Chinese EVs now dominate the world market. China’s EV success story has been driven by government ambition to dominate the world market, as it has done for solar panels, and is a successful example of Chinese industrial policy.
Fannin cites the case of Xiaomi, a market leader for smartphones, which is now establishing itself as a producer of EVs. She believes that the US might eventually open its market to Chinese EVs – they are already present in both the Canadian and Mexican markets – and Detroit must be prepared for it. It is indeed ironic that Tesla operates its largest global manufacturing and export hub in China but Chinese EVs are effectively excluded from the US market.
The US pushback against China has been partly driven by corporates that are concerned about the protection of intellectual property and Chinese regulations favouring Chinese firms. However Fannin argues that these factors have not always been decisive, despite prominent cases such as Facebook’s possible entry into the Chinese market being blocked. Some American companies have made important mistakes, especially by not adapting to local conditions. And even if the Chinese market were really open, it is questionable whether US companies would survive the ferocious Chinese competition.
Under Xi Jinping’s leadership, China has sought to decouple its economy from the US, especially to foster technological independence. However, China’s big tech companies did suffer from Xi’s crackdown between 2021 and 2023 that was designed to curtail these companies’ monopolistic behavior and their perceived threat to the power of the Chinese government. Xi subsequently backed down and the Chinese government now has the clear ambition for China to become the world’s tech leader.
Overall, there has been some decoupling of the US and Chinese tech sectors. But substantial decoupling is very difficult as China has become the focal point of manufacturing and tech supply chains. Despite the promise of India and Southeast Asia, there are few realistic alternatives to China.
Fannin reiterates that China and the US are the world’s only tech superpowers, especially when it comes to AI. She argues that the US has the lead for R&D in the AI sector, even if China is catching up with every passing day. Indeed, China rattled the US in 2025 when it launched DeepSeek-R1, a powerful AI model developed by a Chinese startup. And China has the lead for adoption and commercialisation of AI. In contrast to many US closed models, Chinese AI models are often open-weight, meaning they can be downloaded, modified and run independently. Fannin believes that this will foster quicker innovation.
China’s rise as a tech powerhouse, which is well documented by Fannin, has been extremely rapid. Her research is in line with ASPI’s own Critical Technology Tracker, according to which China has a clear lead in its global share of high-impact research output. China now leads in 66 of the 74 technologies tracked, with the US leading in the remaining eight.
The process will undoubtedly call for her to write a third volume in the coming years. For the moment, Fannin despairs at the present lack of cooperation between China and the US and hopes that the immense potential for cooperation can be realised.
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