Understanding the Call from Xu Shanda on China's Tech Gap Amid the US-China Tensions

The SSEC Research Institute has called upon China to thoroughly assess the ramifications of its technology gap with the United States amidst ongoing geopolitical tensions. Xu Shanda, the former deputy director of the State Administration of Taxation, urged Beijing to prioritize reforms that would enhance consumption and private sector confidence.

In a recent report, Xu pointed out that the United States currently holds a dominant position in technology, specifically in artificial intelligence, thus necessitating a comprehensive evaluation of these disparities in productivity and international relations. He mentioned that the gap is not merely between China and the US but rather within the context of a developed country system.

Strategic Choices Ahead

According to Xu, China faces crucial strategic decisions regarding whether to pursue an independent tech ecosystem or align more closely with developed nations. His insights reveal significant concerns about the broader implications of a tech war with the US, including the risk of decoupling from Western markets.

Biden Administration's Tech Restrictions

Xu Shanda's commentary also highlights the efforts of the Biden administration to restrict China’s access to advanced semiconductor technology. He pointed to industry leaders such as the Dutch company ASML, which plays a pivotal role in the semiconductor supply chain.

• Xu advocates for increased investments by China's state sector in advanced technology.
• He urges private firms to focus less on foreign investments due to US export restrictions.
• Reforming the pension system to bolster consumption among the elderly is essential, given the nation’s ageing population.

Conclusion

In sum, the SSEC Research Institute’s findings convey that urgent measures are required for China to address its technological shortcomings relative to the US and to ensure its economic growth moving forward.