Quantum technology is set to transform the global economy by revolutionizing computing, communication, and measurement. As this technology evolves, the United States must monitor China's quantum ecosystem, where a government-led, top-down approach is driving rapid development, according to experts at the Special Competitive Studies Project (SCSP), a nonprofit focused on strengthening U.S. competitiveness in critical technologies.
Quantum technology, which harnesses the physics of subatomic particles, is not new but is now more accessible due to advances in hardware and software. Potential applications include enhanced security through quantum navigation systems that could reduce GPS vulnerabilities, more secure communications via quantum networks, and accelerated scientific research and supply chain optimization through quantum computing.
China's quantum ecosystem is expansive and state-backed, according to SCSP experts. Data from Datenna, an intelligence platform that analyzes Chinese data, reveals that state-affiliated telecom giants, led by China Telecom, fund a network of quantum startups. Many of these firms originate from state laboratories or university research groups, where Beijing retains influence through funding, ownership, or institutional ties, said Dr. Damien Bérubé, a researcher at SCSP.
China is creating demand for quantum technology before the market can sustain itself, using state-backed customers and subsidies to help companies build up before competing globally. For instance, the quantum firm Origin Quantum, supported by the Chinese Academy of Sciences, is preparing for an IPO with a valuation of approximately $1 billion, according to Datenna.
While Chinese quantum companies do not pose an immediate threat to U.S. and allied firms in every high-end market, SCSP experts warn that suppliers surviving on protected domestic demand will eventually enter foreign markets at lower prices. “A network map of these contracts should be read less as a list of isolated transactions and more as an industrial policy map,” the experts concluded.
Understanding these dynamics is crucial for policymakers and businesses. Visit CSIS for more insights on technology competition.
