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]]>The post China’s DJI Makes Trump a Coward at the Inauguration first appeared on China Academy.
]]>On January 20, Trump delivered his inaugural speech indoors at the U.S. Capitol, breaking with the longstanding tradition of holding the ceremony outdoors.
It typically results in a 60% reduction in the live audience size, that’s why for the past 40 years, no U.S. president has made this choice. So why would Trump, known for his love of the spotlight, make such a move?
CNN attributed it to “cold weather,” but the real reason might be that Trump was spooked by DJI, the Chinese drone manufacturer.
Trump had already survived two assassination attempts, prompting the Secret Service to take extraordinary security precautions for the inauguration. According to NBC, Special Agent Matt McCool, tasked with overseeing the president’s safety on Inauguration Day, noted that they had prepared for potential drone threats. While there are many ways to counter drones, the Ukraine War has shown that the safest strategy is simply to avoid exposure to the sky. Clearly, Trump’s security team took this lesson.
But why wasn’t Biden worried about drone threats at his inauguration? The answer lies in DJI’s geofencing system.
Since 2015, when a DJI drone accidentally entered White House airspace, the company has implemented geofencing technology at the request of the U.S. government. This system uses GPS to automatically block drones from flying over restricted areas like the White House, airports, and military bases. Thanks to DJI’s geofence system, the U.S. has avoided drone-related terrorism incidents for years.
However, on January 13, DJI announced the geofencing in the U.S. has unlocked, replacing its no-fly zones with “Enhanced Warning Zones.” This change meant that if a DJI drone flew over the White House, the system would only alert the operator, leaving it up to them to decide whether to leave the restricted area.
The US Secret Service released this photo of the DJI-made Phantom FC40 drone, left, that was found on the White House grounds on January 26, 2015. Photos: Reuters, AP
Foreign Policy raised alarms about this development, pointing out that just a month earlier, unidentified drones over New Jersey had caused nationwide panic, and the FBI had yet to uncover what happened. For U.S. law enforcement, with its limited counter-drone capabilities, DJI’s move “could be politically disastrous.”
However, the U.S. government has no one to blame but itself. In the first place, keeping drones out of restricted airspace is the U.S. government’s job—not DJI’s.
The Federal Aviation Administration (FAA) admitted to Foreign Policy that the U.S. does not require drone manufacturers to include geofencing. In fact, other U.S. manufacturers, such as SkyDIO, sell drones without any built-in geofencing system, which means, for the past decade, DJI voluntarily maintained a massive geofencing system to protect U.S. national security—at its own expense.
However, instead of gratitude, the U.S. government added DJI to its list of “Chinese military companies” in October 2024, imposing sanctions under the guise of “national security threats.” Given this treatment, why should DJI continue sacrificing its profits to help the U.S. government? That’s why DJI has stopped providing geofencing services in the US.
According to Politico, the day after DJI removed its geofencing system on January 14, multiple U.S. intelligence and law enforcement agencies issued a joint warning that Trump’s inauguration was a “potential target” for threats because there are over 700,000 users on the Telegram threatening to assassinate Trump the day after the election, in response to a video posted by a media entity aligned with the Islamic Revolutionary Guard Corps.
Perhaps if Trump hadn’t used a drone to assassinate Iranian General Qasem Soleimani in 2020, regardless of whether DJI had unlocked its geofencing system, he might not have been forced to move his inauguration indoors, staging a “tough guy” act under the Capitol’s iron dome.
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]]>The China Academy: After Trump’s reelection, despite his threats of imposing taxes on China, the Chinese capital market seemed relatively calm. Trade data shows that by the end of October 24, China’s export dependency on the United States decreased to 14.6%. Can we say that the US has failed in its trade war with China? What changes have occurred in China’s foreign trade pattern in recent years?
Keyu Jin: I think that the objectives of the US trade war, whether it was to reduce Chinese exports to the US and thereby reduce the bilateral deficit or to mitigate China’s global position in manufacturing, in that sense, have totally failed. And I think most economists would agree that trade wars really accomplish very little, except to hurt the countries involved. But I think going beyond that, there are also unexpected consequences, which is that it’s really been a long march since the first trade war, where Chinese companies have already been braced for this new uncertainty.
It has set off a globalization frenzy among Chinese companies. If you look at the data, in many major sectors, the majority of these Chinese companies have either already considered or are already implementing “going global” plans that would not have taken place as rapidly had there not been, for the first time, a trade or tariff war.
Moreover, if you look at the data, Chinese exports really seamlessly flowed away from the US to other countries. That is why currently Chinese exports are back at pre-tariff war levels. Chinese exports as a share of global exports have actually even climbed up. Meanwhile, the US share is declining, which means that China is even more integrated into the global economy.
In the past, I think for all of these tactics or strategies or restrictions, there are always unintended consequences to consider. China is not a place where they would voluntarily just submit to these aggressions but would actually react to it. And whether in the end the overall impact was beneficial for the US or not, I think it’s really the contrary.
The China Academy: What are your practical predictions for the economic actions of both China and the US in Trump’s potential second term?
Keyu Jin: It is not clear what President Trump would do with regard to imposing tariffs on China when he becomes president again. I think all of that is still very much in flux. But what I’m certain of is that China is not interested in a trade war.
China is not interested in engaging in more economic or financial confrontations with the United States for one reason, which is that it’s not going to be good for China. It’s not going to be good for the US either. Also, inflation is at a much higher level than it was in 2018. The Chinese economy is also in a weaker position than it was in 2018. The majority of China’s economic challenges remain within the country. It’s internal, not external.
The focus of China is not on the US, contrary to the other way around. There is no dangerous obsession with the United States in China, unlike the dangerous obsession with China in Washington, D.C. To fix China’s economy, they have to direct more of their resources internally.
Moreover, we’ve heard multiple times in the last couple of months the premier saying emphatically that China is going to be the world’s opportunity, meaning China is going to open up widely, deeply, broadly, and even unilaterally if needed. China is going to impose zero tariffs on the least developed countries.
That is a symbolic gesture of a big country trying to be part of a global story, trying to really lift up other countries in the network as well.
The China Academy: And the technological competition between China and the US is a crucial topic in their relationship. Quoting a former Google CEO, Eric Schmidt: “In our lifetimes, a battle between the US and China for knowledge supremacy is going to be the big fight.”
You have also mentioned that for the first time in history, China, as a developing country, is creating cutting-edge technology despite the US technology blockade. Why Has the U.S. Technology Blockade Against China Been Ineffective?
Keyu Jin: Again, there are unintended consequences and reactions to every action put forth. I’m not sure if, historically, sanctions, restrictions, export controls, or any kind of barriers to another country’s progress have ever worked. In fact, most of the time they backfire. Look at the Spanish blockade of Portugal in the 16th century.
Portugal ended up building an entire navy force—thanks to the blockade. There are so many other historical episodes where cutting off resources turned a goal into a national program. These efforts tend to accelerate progress.
We’re seeing some of that in China. For sure, there has been a massive reaction to the technological restrictions. Take semiconductors, for example. China used to comfortably import them, as much in value as it did oil. Now, all of that demand is being redirected to domestic companies, which are seeing more profitability, greater capability, and more scope to invest in research and development. This is really pushing them—forcing them—to accomplish something they didn’t need to achieve before.
There are so many other examples that follow a similar pattern. Unlike trade and investment, where there is often scope for back-and-forth, tit-for-tat negotiations and normalization to a certain extent, technological developments are happening in parallel ways.
But if you look at China, it’s not just the US that it can work with. It has a huge market in developing countries, and it is actively selling to Europe.
Especially with Trump’s potential presidency and the possibility of weakening US ties with its allies in Europe, there is an opportunity for China to strengthen, reinforce, and create new relationships. That’s one thing the US-China trade war has accomplished: a new trading system and a new globalization network. And this network is not static—it’s dynamic. When one channel, like US-China trade, is shut off, other pieces are reshuffled and realigned.
We’re seeing many countries around the world, against the backdrop of US-China competition, signing new trade agreements, building new trade partnerships, and reinforcing regional trade ties.
China is doing the same. There’s a reshuffling and dynamic optimization, if you will, of trading, financial, and technological networks. Because in the end, it is no longer just the US and China in this world—it’s truly a global economy.
But most importantly, the internal drive in China has never been higher. You have an entire nation pushing for cutting-edge technology. This effort comes from the top-down, with central government initiatives, but also from the bottom-up, with local governments working alongside private sectors and entrepreneurs. The private entrepreneurs, who are the driving force of innovation, are being given more opportunities and are being forced to achieve more.
Now, do I think that overall this is a good thing for the US in the long run? Absolutely not. The world is much better when technology can, to some extent, be shared for the advancement of the entire global economy.
But in this context, you can’t simply stop a rapidly developing, large nation with a vast number of engineers, hardworking people, and significant market access. It’s not possible to stall it. In fact, such actions may spur them to achieve even more.
The China Academy: Things have changed—the tables have turned. In the past, China used its market to exchange for foreign technology transfers. But now, we could say that in Europe, when we do EV investments, European countries are asking for our technology transfer.
Keyu Jin: There’s a great deal of irony here. When I was writing my book, the discussion was still about technology transfers that Chinese companies demanded from international companies.
Now, as you’ve said, the tables have completely turned. What’s China’s response? First of all, the Chinese government’s response is to let the companies decide. If it’s a mutually beneficial arrangement, they will go ahead with it. That’s up to them—it shouldn’t be imposed top-down by the government. This is economics, this is capitalism: trading one thing for another, like trading technology for market access.
Chinese companies understand that very well. They’re not the first to say no to such arrangements. For example, in the EV sector or batteries, some Chinese companies are heavily investing in Europe. They’re setting up factories, forming joint ventures, and shifting some production and research centers to Europe—not the US, by the way, but Europe. And that’s good for both Chinese companies and Europe.
I think that with these technological advancements, it’s important to maintain a certain edge—a kind of monopoly power—for a limited time. This induces entrepreneurs to innovate, to invest their time and resources into creating something whose profits or benefits they can reap for a certain period. But that advantage isn’t forever, right? That’s just how it typically works.
The China Academy: You mentioned in your speech that the Chinese economy has not experienced a recession in the past 40 years. You suggested that some decline may be beneficial to clear out obsolete enterprises. What are your expectations for China’s economic development in the next decade?
Keyu Jin: What I was referring to is that natural booms and busts, or business cycles, are normal features of market economies—but they’ve largely been absent in China.
One could argue that there was a recession after 2015, but to some extent, it was stalled by the Chinese government.
Natural cycles, like recessions, aren’t necessarily bad. They help weed out unproductive firms and create space and resources for new companies. This is the “creative destruction” aspect of market economies that should be embraced. It’s also a learning process for an economy, much like the stock market. Overprotecting retail investors, for example, may shield them in the short term, but it prevents them from learning how to make informed decisions and manage risks.
Small cycles are less costly than major crises after long periods of stagnation. So my argument is that these natural cycles should be allowed to occur.
Looking at China’s economy, I would caution against terms like “peak China” or “game over” simply because of a slowdown or recession. The US has had 12 recessions in the past 100 years—this is perfectly normal. However, if cyclical problems aren’t addressed with the right tools and commitment, they can become long-term structural issues.
China’s current challenges started with aggregate demand deficits and other cyclical problems. If these aren’t dealt with properly, they could evolve into more persistent economic challenges.
The China Academy: Why did the US engage in aggressive money printing and liquidity measures after the pandemic, while China’s fiscal and monetary policies remained relatively conservative? Why is there such a stark difference between the financial policies of the two major economies?
Keyu Jin: The Chinese government faces a major dilemma that US policymakers don’t: how to stimulate growth without exacerbating debt problems.
After 2015, China’s primary objective was to cool down an overheated economy, which led to monetary tightening. Today, the challenge is reversed: how to heat up an economy that remains sluggish. But this must be done carefully to avoid piling on more debt, particularly at the local government level.
Another reason for China’s caution is uncertainty about what policies will work most efficiently. There are many potential tools: fiscal and monetary coordination, support for real estate developers, direct consumer stimulus, or service-sector incentives. The challenge is ensuring that these measures translate into real economic activity, rather than just being absorbed into the financial system or used to reduce local government debt.
Conceptually, there’s also a key difference: the Chinese government believes that sustainable wage increases are essential for long-term consumption growth. Temporary stimulus measures, like the “hand-to-mouth” checks in the US or short-term “revenge spending,” are seen as insufficient to drive lasting changes in consumer behavior in China.
While I believe some Keynesian-style effects could work, the Chinese government—and many others outside the US and UK—are hesitant to pursue large-scale Keynesian stimulus. This reflects a fundamental difference in mindset.
The China Academy: China is actively participating in and shaping a new global economic order, including initiatives like BRICS cooperation, the Shanghai Cooperation Organization (SCO), and the Belt and Road Initiative (BRI). How do you view China’s efforts in building this new order?
Keyu Jin: The world is becoming increasingly multipolar. Some see it as bipolar, dominated by the US and China, while others see a multipolar world where India, Russia, Europe, and emerging markets play significant roles.
China’s approach has been to make as many friends as possible, particularly in response to competition with the US. While the US, especially under President Trump, pursued anti-globalist and anti-multilateral strategies, China has embraced multilateralism. It has sought to build alliances, forge new trade partnerships, and create collaborative economic opportunities worldwide.
China is also trying to create new paradigms for cooperation among developing countries. Historically, institutions like the IMF, World Bank, and other multilateral organizations have been dominated by advanced economies and have not fully addressed the needs of developing nations. The global rules have largely been written by a small group of wealthy countries, even though much of today’s population, GDP growth, and economic dynamism comes from what was once considered the “periphery.”
China is more sensitive to the needs of developing countries and recognizes the injustices in the current international system. It aims to play a more relevant role in addressing these issues.
Of course, China’s efforts are not perfect, and there is a learning curve in pursuing strategies that genuinely result in mutual benefits. But I believe that China’s approach still leans toward creating win-win solutions rather than embracing a zero-sum mindset.
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]]>The post Why China Leads the U.S. by 10 Years in 6th Gen Fighters? first appeared on China Academy.
]]>On December 26, two types of new Chinese stealth fighters were publicly demonstrated in flight. The Economic Times, Fox News, and The Warzone all referred to them as 6th generation or Next-Generation stealth fighters.
Notably, photos taken in Sichuan Province indicate that China’s new aircraft are already marked with serial numbers. According to Chinese military regulations, only equipment that has been formally delivered to combat units is allowed to have serial numbers. This could suggest that China’s 6th generation fighter has already entered mass production and may even be combat-ready.
The New York Post, on the other hand, pointed out that the U.S. military has yet to deploy a 6th generation fighter. This implies that the U.S. Air Force is lagging behind China by as much as a decade. The US Next Generation Air Dominance (NGAD) program, which aims to develop a 6th generation fighter, was proposed back in 2014. However, as of now, there isn’t even a prototype capable of public flight demonstrations.
This has left many Chinese netizens puzzled, given that China’s military budget for 2023 was around $210 billion, while the U.S. military budget is a staggering $916 billion—four times that of China. Why is U.S. military technology falling behind China?
Chinese strategist Professor Wang Xiangsui offers the explanation: the key to developing a new generation of fighter jets lies in having the necessary next-generation research facilities—specifically hypersonic wind tunnels. In this field, the U.S. is at least eight years behind China.
Wind tunnels are research facilities that simulate real-world flight conditions on the ground, with hypersonic wind tunnels reaching speeds of at least Mach 5. Beijing’s JF-22 wind tunnel can simulate speeds up to Mach 30, flight altitudes of 100 kilometres, and continuous operation for more than 100 milliseconds, making it the world’s most advanced wind tunnel. In contrast, the VOA reported in 2023 that the most advanced U.S. wind tunnel, LENS II, can only simulate speeds of Mach 7 and operate for just 30 milliseconds.
JF-22 Supersonic Wind Tunnel (Image source: Xinhua News Agency)
To understand the difference, imagine developing aircraft as training athletes. Having a super-fast treadmill allows engineers to closely observe the athlete’s form and offer precise feedback without having to transport test models to 100 kilometres in altitude. This not only reduces the risk of espionage during development but fundamentally improves the maturity of technology verification machines, ensuring fewer losses and greater safety for test pilots.
While the U.S. Sandia National Laboratory’s Z Machine can accelerate airflow to Mach 30, its primary purpose is to study shock waves for nuclear fusion, and it can only operate for a very brief period. Unlike Beijing’s JF-22, which is designed for continuous operation, the Z Machine cannot simulate sustained high-speed flight conditions needed for aircraft and missiles. It’s like trying to train a sprinter with a treadmill that can only simulate one step. Even if Usain Bolt’s first step is faster than anyone else’s, he won’t win the gold medal if he doesn’t complete the remaining 99 meters.
The U.S. scientific community has been well aware of this 8 years ago. JF-22’s creator, Mr. 姜宗林(Jiang Zonglin), has received the American Institute of Aeronautics and Astronautics Ground Testing Award in 2016 for developing the world’s largest shock wind tunnel, the JF-12. This signals that U.S. academics have clearly recognized the need for U.S. to increase investment in wind tunnel research.
Dr. Jiang Zonglin, Director of the Key Laboratory of High Temperature Gas Dynamics, Chinese Academy of Sciences.
However, as of November 2024, the U.S. remains behind. The most recently delivered wind tunnel at the University of Notre Dame can only reach Mach 10, just one-third of the capability of China’s JF-22.
Notably, the U.S. still boasts formidable scientific potential. In the 2025 QS World University Rankings, 4 of the Top 10 universities are in the U.S., which attracted 280,000 Chinese students went to the U.S. to study. If the U.S. can retain these talented individuals and foster their creativity at NASA, there is still hope for the U.S. to catch up with China in the race for 6th generation aircraft development.
However, the “China Initiative,” launched by Trump in 2018, classified many Chinese scientists working at U.S. universities and research institutions as “economic spies” and “technology thieves.” The Biden administration has not reversed this discriminatory policy. On July 10, 2024, Chinese neuroscientist Professor Jane Ying Wu, accused of having “close ties to Beijing,” lost her lab at Northwestern University, which led to her tragic suicide. As Trump will return to the White House in just 20 days, the fate of Chinese students and researchers in the U.S. remains uncertain.
Prof. Jane Ying Wu
What is clear is this: after World War II, the U.S. demonstrated remarkable inclusivity by welcoming German missile scientists and Japanese bioweapons experts from Unit 731. However, for scientists of Chinese descent, even those students who self-funded their education in the U.S., it seems that America is no longer the platform where they can fully realise their creative potential. According to LinkedIn, in 2023, 80% of Chinese students studying abroad chose to return to China for work.
For a country like the U.S., which relies on high-value-added industries for foreign exchange, losing its inclusivity and judgment on the direction of technological development could not only result in the loss of the 6th generation fighter, but potentially jeopardize its future.
Wernher Magnus Maximilian Freiherr von Braun. Before he served in NASA as the chief architect of the Saturn V super heavy-lift launch vehicle that propelled the Apollo spacecraft to the Moon, he was a member of the Nazi Party and Allgemeine SS, design and co-developed the V-2 rocket during World War II
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]]>The Chinese Ministry of Foreign Affairs’ latest decision taking countermeasures against the U.S. arms sales to Taiwan
In this latest countermeasure list, BRINC Drones stands out prominently. Not only is the company ranked second on the list, but its founder and CEO, Blake Resnick, is also named. Such “recognition” is entirely due to BRINC’s “expertise” in meddling in various conflict zones.
On one hand, BRINC Drones has been aggressively pursuing the military drone market, actively vying for the U.S. Department of Defense’s “Replicator Initiative” contract. This program aims to deploy thousands of low-cost drones to create a so-called “hellscape” in the Taiwan Strait. Earlier, at the onset of the Russia-Ukraine conflict, the company moved swiftly—not only donating large numbers of drones but also dispatching a team to a “secret location” in Poland to train Ukrainian drone operators.
On the other hand, BRINC Drones plays a key role in demonizing Chinese drone technology and manufacturers by funding lobbying groups such as AUVSI. The company eagerly feeds alarming narratives about China’s drone industry to U.S. policymakers and the public. David Benowitz, BRINC’s Vice President of Strategy and Marketing Communications, once claimed: “It’s extremely difficult to consistently assess DJI’s product releases. There could be backdoor chips installed separately from standard production. We’ve seen this before—during conflicts, rogue states do embed backdoor chips in consumer products for espionage.”
As the founder of this company, Blake Resnick is a figure wrapped in accolades: a genius hardware geek, a garage-built nuclear fusion reactor creator, a protégé of Peter Thiel, a Thiel Foundation fellow, a Forbes “30 Under 30” honoree, and a recipient of his company’s first funding from OpenAI’s Sam Altman. With such credentials, Resnick epitomizes the archetype of a Gen Z “deep tech” or “hard tech” entrepreneur—Silicon Valley’s embodiment of the right-wing ideal of American capitalist innovation.
Blake Resnick, CEO of BRINC Drones
However, beneath this shiny stack of labels lies the true image of Blake Resnick: a high school dropout who once built DIY physics kits, briefly attended a low-tier state university before dropping out again, and worked as an apprentice at McLaren and Tesla. While he shows a modest knack for marketing and self-branding, his credentials are far less dazzling. As for the Forbes “30 Under 30” endorsement, curious readers can check the going rates from resellers on popular second-hand platforms.
Resnick’s ability to tap into Peter Thiel and Sam Altman’s resource networks, riding the wave of their influence, can largely be attributed to one key factor: His stint as a former DJI drone intern.
It was during his brief internship at DJI that Resnick seemingly experienced a “eureka moment,” leading to the creation of BRINC Drones. He soon unveiled his meticulously crafted concept of a “drone border wall,” envisioning hundreds of fully autonomous drone stations along the U.S.-Mexico border. These quadcopters would patrol continuously between stations and, upon detecting illegal immigrants, fire non-lethal bullets to apprehend them.
This dystopian vision of a mechanized army driving out illegal immigrants clearly struck a chord with Silicon Valley’s right-wing elites.
A drone patrolling along the US-Mexico border wall
By the way, David Benowitz mentioned before, who made the ridiculous claims mentioned earlier, is also a former DJI employee who spent years working in Shenzhen.
After being featured on China’s countermeasure list, Resnick’s BRINC is bound to lose access to Shenzhen’s drone supply network—a blow that may very well put the company on a countdown to survival.
Regardless of the future fate of this flashy, vain, and opportunistic BRINC, or rather Resnick’s personal story, it serves as a striking symbol of our times.
The small multi-rotor drone has undoubtedly become one of the most geopolitically significant symbols among the emerging electronics of the 21st century. As the industry continues to grow and technological capabilities improve, the form of multi-rotor drone products is undergoing a profound evolution. A typical example is EHang, once a player in the quadcopter market and now a global eVTOL unicorn, demonstrating how new paradigms and systems are increasingly impacting the traditional aviation industry.
Today, mainland China is undeniably the global hub of the drone industry. Even a shrewd entrepreneur like Resnick has to admit, “The entire global electronics industry, or more specifically, the global drone industry, is based in one city: Shenzhen.”
However, when Resnick was born in 2000, the landscape of the multi-rotor drone industry was entirely different.
After Japan’s Kenko introduced the GyroSaucer in the late 1980s, the small quadcopter configuration quickly captured the attention of both the global academic community and RC model enthusiasts. In Minnesota, USA, an engineer and remote-controlled helicopter enthusiast named Mike Dammar began experimenting with building quadcopters.
The Kenko GyroSaucer (Left); Dammar’s Prototype No. 3 from 1991 (Right)
Starting with the successful flight of “Prototype No. 3” in 1991, Dammar’s design underwent several iterations, continually incorporating research advancements from American universities, such as HoverBot and Mesicopter, in quadcopter configurations. By the late 1990s, a series of new technologies from academia and industry—covering low Reynolds number aerodynamics, micro DC motors, lightweight structures and materials, flight control algorithms, and navigation and communication systems—came together in Dammar’s work, culminating in the historically significant “Roswell Flyer” in 1999.
One of the prototypes from Stanford University’s Mesicopter project in the 1990s (Left); The Roswell Flyer from 1999 (Right)
Focused solely on invention and indifferent to wealth, Dammar quickly sold his design to the independent RC brand Draganfly. He then turned his attention back to developing his ideal “boomerang drone.” Draganfly, on the other hand, rebranded the Roswell Flyer as the Draganflyer, and from 1999 to 2005, approximately 8,000 units were sold. It not only became the “standard” kit for research on multi-rotor technology in global academic institutions but also defined the practical form of quadcopters.
It’s worth mentioning that during the period when Draganfly dominated the global market, its founder became increasingly reliant on the Chinese supply chain: “At the time, remote-controlled helicopters were all the rage, and I bought tens of thousands of replacement blades and rotors from China, which people then bought from us.” At the same time, these small Chinese workshops, often overlooked by big brands, quickly absorbed and applied new knowledge and technology, setting off a “chain reaction” within the ecosystem.
In 2004, Hong Kong’s well-established toy manufacturer Silverlit launched its quadcopter remote-controlled drone, the X-UFO, which became the world’s first product targeting the mass market rather than the professional market. The release of this drone caused a sensation in the industry.
The X-UFO was launched by Silverlit as a kind of toy.
Of course, looking back, the most significant mark left on the history of China’s drone industry in 2004 was likely the meeting between Hong Kong University of Science and Technology(HKUST) student Wang Tao and Professor Li Zexiang. During a coaching session for the ROBOCON robotics competition, Wang Tao’s innate technical talent and “obsession” left a deep impression on Li Zexiang, much like Mike Dammar’s passion for technology.
Wang Tao, the founder of DJI, Chinese Drone Giant
After graduating in 2006, Wang Tao founded his own brand, DJI Innovations, in Shenzhen, focusing on remote-controlled helicopter flight control systems. Like many other RC hobbyist workshops, it relied on word-of-mouth from enthusiasts, and the satisfaction of being recognized by peers was far more important to him than growing the business.
During this period, DJI was more like an external experimental lab for Li Zexiang’s research team. Wang Tao, who was pursuing his master’s degree, traveled across the country with Li Zexiang, from the 2008 Wenchuan earthquake and 2009 Everest expedition to the 2010 unmanned helicopter crossing the Yarlung Tsangpo Grand Canyon. This “dream team” from the HKUST constantly pushed the boundaries of remote-controlled helicopter applications, accumulating numerous innovations in flight control systems. Li Zexiang and his partner Zhu Xiaorui were also deeply involved in DJI’s financing and operations, sending graduate students to intern at DJI, many of whom later became core employees of the company.
Professor Li Zexiang (far right) guides Wang Tao (second from right) and Song Jianyu (third from right) in completing the unmanned helicopter flight experiment over the Yarlung Zangbo Grand Canyon.
In 2011, Wang Tao officially completed his master’s thesis and fully embraced the role of an entrepreneur. It was also in this year that, sensing the emerging market for multirotor drones, DJI launched the “Fenghuolun” (Firewheel), a multirotor flight platform aimed at the professional market. This marked the company’s transition from being a subsystem supplier to a more commercially-driven player in the end-user market.
From the “Fenghuolun” kit and the six-axis “Jindouyun” to the groundbreaking “Phantom” quadcopter, DJI quickly achieved a “triple jump” across the professional, commercial, and consumer markets, building on its deep expertise in key subsystems. This rapid growth helped the company create the “iPhone moment” for consumer drones.
As the “Phantom” dominated the market like a bulldozer, DJI’s U.S. division erupted in a dispute over how to divide the spoils. Colin Guinn, the head of the U.S. market, claimed to be the key contributor to the phenomenal success and demanded more equity from the Chinese founding team.
The dispute quickly ended with Colin Guinn and his North American team leaving DJI to join American competitor 3D Robotics.
At the time, 3D Robotics seemed to have all the conditions to easily “end” DJI:
one of its co-founders was a typical American “garage geek,” while the other was the editor-in-chief of Wired magazine, a well-known thought leader in the digital era; the marketing head, Colin Guinn, claimed to have key insights into DJI’s “Phantom” supply chain and was determined for “revenge”; it had backing from giants like Qualcomm; and it strongly emphasized its open-source software approach, positioning 3DR as the “Android” of the drone market.
Colin Guinn, 3D Robotics’ marketing head
This may have been a clever and profound market positioning, but unfortunately, 3DR had all the elements needed for American-style innovation, except for control over large-scale production.
In the end, the showdown between 3DR and DJI was decided with a dramatic speed, determining their respective fates.
In 2015, 3DR bet the company’s future on its all-in-one aerial camera, the Solo. Positioning it as the flagship competitor to the “Android” of drones, DJI responded quietly by pricing its latest model, the Phantom 3, much lower, akin to an “iPhone” priced at a fraction of the cost. The outcome was inevitable: when you can buy the latest iPhone for $2,000, how many would be willing to pay a higher price for the “Android”?
This reliance on large-scale manufacturing capabilities and the straightforward, yet monotonous, business warfare of economies of scale ultimately broke Chris Anderson, the founder of 3DR and a new-generation lean startup mentor: “I have never seen such price slashing in any market.” At the CES exhibition in January the following year, dozens of Chinese drone brands with even more aggressive pricing than DJI made their debut, leading the 3DR team to cancel their future hardware plans and switch to the company’s liquidation plan, PLAN B.
The demise of 3DR and the prolonged funeral of GoPro’s Karma forced many Americans to confront an uncomfortable, cold reality: creating desirable, cutting-edge high-tech products is no longer the exclusive domain of the United States or Western civilization as a whole.
Faced with DJI’s overwhelming competitiveness, Americans, after being defeated in direct competition, almost instinctively resorted to their last resort.
In 2018, after GoPro officially announced its exit from the drone market, the U.S. Department of Defense swiftly issued a ban on DJI purchases, marking the military-industrial complex’s call to demonize DJI, with a series of performance arts unfolding one after another.
From a global industry leader to relying on “dirty tricks” to barely resist, the dramatic shift in the U.S. drone industry over just a decade or so is not an isolated phenomenon:
Segway, which pioneered the electric scooter category, is now part of Ninebot; iRobot, once a leader in the robotic vacuum space, is struggling in the face of competition from Roborock; Boston Dynamics, which led the innovation in quadruped and biped robots, is now being overshadowed by YuTree Technology; GoPro, once a tech icon on par with the iPhone, is now under pressure from Insta360…
The world of hardware innovation is no longer what Americans are familiar with.
In the “original” timeline, millennial and Gen Z American entrepreneurs were supposed to replicate the legendary business templates of their predecessors: garage startups fueled by genius sparks, efficient funding systems, and the empowerment of seasoned professional managers. They were meant to become category leaders, enjoy a decade or more of market dominance and windfall profits, build robust brand and technological barriers, and eventually step into the mentor’s role, handpicking the next generation of business prodigies.
However, the cost structure and innovation speed reshaped by Chinese manufacturing have almost permanently dismantled the ecological cycle that had thrived since the birth of the HP and Silicon Valley startup mythos. The relentless “involution” of large-scale production is one thing; even in the realm of “garage innovation” from 0 to 1, young Chinese geeks like Wang Tao are emerging in droves. As Wang himself once remarked about a group of aspiring students: “You could load these people into three cars, put them somewhere, and in a few years, you’d probably see ten excellent companies emerge.”
Once ridiculed for counterfeits and poor-quality goods, even earning the derogatory label “KIFR” (Keepin’ It Real Fake), Chinese manufacturing has undergone breathtaking evolution under intense competition. Not only has it mastered the art of winning the race from 1 to 100 with consistent quality, ultra-low costs, and unmatched supply chain capabilities, but companies like DJI and other rising stars have also seized the global frontier in original innovation, excelling in the journey from 0 to 1.
Today, beyond the hysteria and emotional outbursts, mid-generation American political and tech elites with growing resources have begun to reassess and reflect on large-scale manufacturing. From Bill Gates to Peter Thiel, Silicon Valley’s billionaires have launched numerous generous seed funding initiatives, aiming to break free from the MBA-style corporate management mold and nurture disruptive ideas and talent from the grassroots.
However, it is far easier said than done for the elites filtered through the American capitalist machine to fundamentally reform it. The meteoric rise of Blake Resnick and his company BRINC exemplifies the barren state of grassroots innovation in American tech. So much so that the tens of thousands of digital nomads in the Bay Area, dreaming of overnight wealth, have merely swapped the suit-and-tie MBA archetype for the plaid-shirt, wild-haired geek template of opportunism. What sloshes inside this seemingly fresh bottle is nothing more than the old wine of Silicon Valley’s “success gospel.”
The small multi-rotor drones of China has already flown past the good old days of American ‘hard-tech’ innovation.
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]]>The post China is the Last Hope to Stop NVIDIA’s Monopoly first appeared on China Academy.
]]>On December 9, China launched an antitrust investigation into the US chipmaker Nvidia. The company could face fines of up to $1.03 billion, according to the South China Morning Post.
Global Times reported that the investigation primarily concerns an acquisition. In 2019, Nvidia announced its $6.9 billion acquisition of Mellanox Technologies, the largest acquisition deal of that year. The concern was that Nvidia’s purchase of Mellanox would enable it to complete a near-monopoly in the AI industry, a market the US International Trade Administration estimated that will to add $15 trillion to global economy by 2030, which also drew scrutiny from antitrust authorities in the European Union and the United States. However, it seems China is the only country to stop Nvidia’s monopoly.
To understand why, we need to first grasp how Nvidia’s monopoly operates:
To train a competitive AI, three core components are essential: hardware, software, and communication technology. Nvidia has established a global monopoly over the first two.
In terms of hardware, Nvidia’s H100 is currently the best-selling AI training chip worldwide. According to Nasdaq, Nvidia sold an estimated $38 billion worth of H100 GPUs in 2023, as companies raced to acquire the chips for training large language models. This surge in demand propelled Nvidia to the forefront of the AI chip market, securing a market share of over 90%.
Mizuho Securities estimates that Nvidia controls between 70% and 95% of the AI chip market, specifically for training and deploying models like OpenAI’s GPT. The H100, when purchased directly from Nvidia, is priced at approximately $25,000. Nvidia’s pricing power is reflected in a remarkable 78% gross margin—This vividly demonstrates how much Nvidia exploits technology companies after gaining a monopoly position.
In terms of software, Nvidia’s most formidable competitive advantage is the Compute Unified Device Architecture (CUDA).
The competition for AI models initially stemmed from the rivalry between Google and Meta. Engineers discovered that while CPUs excel at general computing and meet the requirements for inference tasks in AI, they were insufficient for handling the large-scale parallel computing tasks required for deep learning, especially for training large models. GPUs, with their powerful parallel processing capabilities, were better suited for this purpose. However, their programming models and memory access patterns differed significantly from those of CPUs, creating considerable development challenges.
To solve this, Nvidia introduced CUDA in 2007, enabling developers to use C/C++ to tap into the parallel processing power of GPUs for non-graphical workloads. This innovation laid the foundation for deep learning, prompting major frameworks like TensorFlow and PyTorch to integrate native support for CUDA early on.
CUDA quickly became the most efficient path to harness the computational power of GPUs. According to the Netflix Technology Blog, using a custom CUDA kernel, the training time for a neural network on a cg1 instance was reduced from over 20 hours to just 47 minutes when processing 4 million samples.
In the academic world, most papers demonstrating innovations in neural networks defaulted to using CUDA acceleration when conducting GPU-based experiments, further cementing its dominance in the emerging deep learning community.
Meanwhile, Qualcomm, Intel, and Google have reportedly teamed up to offer oneAPI as an alternative to Nvidia’s CUDA, but these efforts have largely faltered. The reason for this is simple: once developers invest in the CUDA ecosystem, switching to other GPU frameworks becomes a daunting challenge. It requires rewriting code, learning new tools, and often re-optimizing the entire computing process. These high switching costs make it more practical for many companies and developers to continue relying on Nvidia’s products, rather than risk exploring alternative solutions.
Even tech giants like Google, with the resources to invest heavily in custom ASICs, have struggled to replace CUDA. In 2018, Nvidia GPUs accounted for over 90% of Google’s TPUv2 infrastructure, despite the company’s substantial investments in custom hardware.
In terms of communication technology, Nvidia’s acquisition of Mellanox has raised concerns in China, the US, and the EU.
As AI models continue to grow in size, large language models now require hundreds of gigabytes, if not terabytes, of memory just for their model weights. For example, production recommendation systems deployed by Meta require dozens of terabytes of memory for their massive embedding tables. A significant portion of the time spent on training or inference for these large models isn’t dedicated to matrix multiplications, but rather to waiting for data to reach the compute resources.
To address this challenge, InfiniBand—a computer networking standard used in high-performance computing that boasts extremely high throughput and low latency—has been introduced into the AI training industry. According to The Institute of Electrical and Electronics Engineers (IEEE), InfiniBand now dominates AI networking, accounting for roughly 90% of deployments.
Mellanox has been the leading supplier of InfiniBand technology. As of 2019, Mellanox connected 59% of the TOP500 supercomputers, with a year-over-year growth of 12%, showcasing its dominance and continued advancement in InfiniBand technology.
Jensen Huang met with Mellanox CEO Eyal Waldman
By acquiring Mellanox, Nvidia secures the “holy trinity” of the AI industry—domination in GPU chips, development tools, and communication technologies for distributed computing. This acquisition further strengthens Nvidia’s monopoly in AI, creating a snowball effect that makes it increasingly difficult for competitors to break through.
When China’s Administration for Market Regulation approved Nvidia’s acquisition of Mellanox in April 2020, it imposed additional restrictive conditions. These included prohibiting Nvidia from bundling GPUs and networking devices, and from discriminating against customers who purchase these products separately in terms of price, function, and after-sales service. However, in June 2022, Nvidia explicitly stated in the user agreement for CUDA 11.6 that it bans the use of CUDA-based software on third-party GPUs. This effectively forces developers using AMD and Intel chips to switch to Nvidia’s GPUs, prompting China to launch an investigation into Nvidia last week for potential violations of antitrust law.
By now, many of you may understand why China is investigating Nvidia. However, the question remains: why is China only starting this review now, two years after Nvidia allegedly broke the law? This delay can be attributed to three key factors.
Firstly, China’s chipmakers have finally developed the technology to challenge Nvidia.
The Nvidia H100 GPU is manufactured using TSMC’s N4 process, which is categorized as a “5 nm” process by the IEEE International Roadmap for Devices and Systems. While, ASML is only allowed to sell DUV machines to China, primarily used for producing 7 nm chips.
According to Bloomberg, SiCarrier—a Chinese chipmaking equipment developer collaborating with Huawei—secured a patent in late 2023 involving Self-Aligned Quadruple Patterning (SAQP). This breakthrough allows for certain technical achievements akin to those seen in 5 nm chip production. Business Korea argued in May that chips made using such techniques would cost four times as much as those produced with EUV lithography, Huawei’s actions appear to bust this claim. On November 26, Huawei launched its Mate 70 Pro, with the 1TB version priced at 7,999 CNY—the same price as the Mate 60 Pro with similar specifications released the previous year.
On December 9, Huawei’s executive director, Yu Chengdong, publicly announced that the chips in the Mate 70 series are 100% made in China. Technode reported that the Huawei Mate 70 Pro’s CPU, the Kirin 9020, outperforms Qualcomm’s Snapdragon 8+ Gen 1, which was released in 2022 and manufactured using TSMC’s N4 process. According to insiders, while the Kirin 9020 chip may still uses a 7nm transistor process, its advanced packaging technology has greatly enhanced computing efficiency.
The successful launch of the Huawei Mate 70 Pro demonstrates that Chinese chipmakers can now produce chips competitive with TSMC’s 5nm technology in large quantities and at competitive prices. This achievement also positions them to extend their expertise to GPUs, provided they adapt their designs to meet the specific requirements of each processor type. This advancement suggests that Chinese chipmakers are nearing the capability to produce GPUs with hardware performance comparable to Nvidia’s H100.
Moreover, The Financial Times reports that China’s biggest chipmaker SMIC has put together new semiconductor production lines in Shanghai, aiming to produce 5nm chips. Although 5nm chips remain a generation behind the current cutting-edge 3nm ones, the move would show China’s semiconductor industry is still making gradual progress, despite US export controls.
Secondly, Chinese AI companies are increasingly positioned to reduce their dependence on CUDA.
American companies like Google and Meta remain heavily reliant on CUDA because it offers the best acceleration performance for Nvidia’s H100 chip, which dominates the AI hardware market. However, the CHIPS and Science Act, signed by President Biden, prohibited Nvidia from exporting H100 chips to Chinese companies after 2022. This restriction has forced Chinese technology giants such as Baidu and Tencent to explore alternatives, including AMD GPUs and domestically developed GPU chips, effectively reducing their reliance on Nvidia’s CUDA ecosystem.
In addition, Moore Threads, a Chinese GPU design company, launched its Moore Threads Unified System Architecture, MUSA, on November 5. The MUSA architecture, a serious challenger to CUDA, provides a high-performance, flexible, and highly compatible computing platform that supports various parallel computing tasks, including AI computation, graphics rendering, multimedia applications, and physical simulation. The company also provides a wealth of development tools and libraries, such as MUSA SDK, AI acceleration libraries, communication libraries, etc., to help developers better develop and optimize applications. Moreover, MUSA is compatible with CUDA’s software stack interface, significantly easing the process of porting applications and lowering the cost for enterprises to move away from Nvidia products.
Moore Threads’ MTT S4000 AI GPU is already available in December 2023
Thirdly, InfiniBand technology is becoming outdated compared to Chinese Ethernet advancements.
While InfiniBand currently dominates AI networking with approximately 90% of deployments, IEEE reports that Ethernet is emerging as a strong contender for AI clusters. For instance, InfiniBand often lags behind Ethernet in terms of maximum speeds. Nvidia’s latest Quantum InfiniBand switch reaches 51.2 Tb/s with 400 Gb/s ports, whereas Ethernet achieved 51.2 Tb/s nearly two years ago and now supports port speeds of up to 800 Gb/s.
One challenge for Ethernet adoption has been its inability to handle the massive workloads of AI training and other high-performance computing (HPC) applications. The high traffic levels in data centers can lead to bottlenecks, causing latency issues that make it unsuitable for these tasks.
However, on September 27, during the 2024 China Computational Power Conference, state-owned China Mobile and 50 other partners introduced Global Scheduling Ethernet (GSE)—a new networking protocol designed to handle large data volumes and provide high-speed transfers tailored to AI and other HPC workloads.
Since Nvidia’s acquisition of Mellanox in 2019, there are no longer independent suppliers of InfiniBand products. In contrast, Ethernet has a diverse range of suppliers worldwide. If China Mobile successfully promotes Ethernet technology as a replacement for InfiniBand in AI applications, it could provide AI companies globally with access to local suppliers, potentially reducing costs and fostering competition.
China is not the only country challenging Nvidia’s monopoly. However, it is the most determined and resourceful one. Due to U.S. sanctions, China’s own technological advancements and a vast domestic market, China has emerged as one of the few countries with significant independence and competitiveness in hardware, software, and communication technology. More importantly, these technology companies are not just owned by the state—they are driven by the ingenuity and efforts of the Chinese people.
As of October 2024, China boasts 1.1 billion internet users, accounting for 20% of the world’s total online population. When President Biden banned Chinese companies from purchasing the most advanced American chips and algorithms, it was the demand from these 1.1 billion users—who engage in activities such as watching short videos, gaming, and shopping online—that empowered Chinese tech companies to pursue self-reliance. According to official Chinese statistics, in 2023, the market size of China’s digital economy reached 53.9 trillion yuan.
Europe and the Global South undoubtedly have minds as brilliant as China’s. However, with Google and Meta leaving little room for competitors to emerge in these regions, they can never rely on the support of European and Global South users to get rid of Nvidia’s dominance. The free market is great, but if you only support it when it suits your needs, it might not work as it should.
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]]>The post China to Outrun U.S. Militarily Before Economically first appeared on China Academy.
]]>First, as many commentators have noted, the scale and sophistication of the weapons on display at this year’s airshow are truly astonishing. This highlights the combined power of China’s engineering talent pool and its manufacturing industry clusters, signaling the emergence of a formidable defense industry. Nearly 40% of the world’s science and engineering graduates are in China, and the state-owned military-industrial system, coupled with a vast domestic manufacturing base, provides opportunities for practical application and research. Many young engineers are making their mark, creating a flourishing environment for both military and dual-use technologies. The world’s largest and most efficient industrial clusters are showcasing their economies of scale, driving down the costs of production and R&D for various components to the extreme.
In several speeches over the past two years, I’ve posited that among the various dimensions of national power comparisons between China and the United States, military strength might be the first area where China surpasses the U.S., even before economic scale. After seeing this year’s airshow, I believe more people will agree with this prediction.
Although China has been pursuing civil-military integration for over a decade and has made some progress, the actual results still fall short of expectations. The relative insularity of the military-industrial system has created a sense of detachment between private enterprises and the Chinese military’s procurement system. The military procurement process imposes many qualification and procedural barriers, which, in practice, hinder the participation of numerous private companies. Moreover, under the threat of sanctions from the U.S. and Western countries, capable private enterprises are often reluctant to engage in military-related business.
An incident during our Greater Bay Area research visit left a lasting impression on me. Our delegation included both retired local officials and some active-duty Air Force officers. One well-known company, which derives a significant portion of its revenue and an even larger share of its profits from Western markets, has faced U.S. federal sanctions in recent years, leading to a noticeable contraction in its market space. During preliminary communications, the company candidly informed us that while they could host the retired local officials, they could not receive active-duty military personnel. The reason was that the company was in the midst of a lawsuit against relevant U.S. government agencies, seeking to lift military-related allegations and associated sanctions. At this critical juncture, it was highly likely that U.S. agents had already infiltrated the company to gather evidence and fabricate charges.
This incident serves as a wake-up call: under certain circumstances, some Chinese companies may cooperate with Western sanctions against the Chinese government, the Communist Party, and the military in order to protect their market interests in the West. Why? Because companies are market- and profit-driven; without profits, they cannot survive. When a company’s primary profits come from Western markets, even a purely Chinese-owned enterprise may find itself “in the enemy camp.” To address this potential risk, I believe a dual approach is necessary:
Soft measures: Fully open up the military procurement market to key private enterprises, actively lower entry barriers, and make efforts to attract them.
Hard measures: Establish corresponding laws and regulations to appropriately warn and penalize companies that exhibit particularly passive behavior in critical areas with serious consequences.
We cannot simply blame companies for lacking patriotism. Encouraging patriotic actions requires a combination of regulations and incentive mechanisms. Civil-military integration is a critical strategic issue tied to the nation’s destiny. We must find ways to integrate leading private enterprises into the military-industrial system as soon as possible. Only in this way can we secure greater opportunities for survival and development in an increasingly competitive global environment.
The further development of China’s military exports requires a shift in the longstanding ideas and traditions at the level of foreign strategy. I consulted relevant experts, and they highlighted that, to date, China has maintained strict controls on military exports for two main reasons:
1) To prevent advanced weapons from falling into the hands of potential adversaries or enemies.
2) To avoid damaging China’s diplomatic relations and international image.
However, I believe these considerations are insufficient to justify limiting Chinese enterprises, especially private companies, from exporting military products. Does not selling weapons mean others cannot figure out the capabilities of your equipment? Does reducing arms exports improve our international image? The world’s largest and most advanced military-industrial system, if controlled by a peace-loving and non-extremist country like China, would be a blessing for humanity.
From a logical perspective, previous export control policies were designed during an era when peace and development were the dominant themes, aligning with the need for a low-profile diplomatic strategy. These policies were also established when China’s military-industrial capabilities were far behind those of the U.S., Russia, Europe, and Japan. Today, however, the times have changed. The 20th Party Congress report described this era as one of “turbulence and transformation” and “unprecedented changes in a century.” Given the overall industrial landscape—where we are strong and our adversaries are weak, and where private enterprises outperform state-owned ones in manufacturing scale—our policies on military and dual-use technology exports must evolve accordingly.
We need to aggressively compete in the global arms market, treating military and dual-use technology as strategic industries. This requires not only R&D subsidies but also export tax rebates and seller financing, along with diplomatic support to pave the way. Economic common sense tells us that for an industry to thrive, demand-side pull is far more powerful than supply-side push. For an industry to grow and technology to advance, it cannot rely solely on government support and subsidies. Ultimately, it must capture the largest possible and continuously growing market, ensuring reasonable returns on initial investments. Furthermore, multiple rounds of feedback from consumers and users are essential for continuous improvement.
For politicians, military products are akin to drugs for addicts or cosmetic surgery for middle-aged women—they can be addictive and create dependency. The procurement of advanced military equipment often triggers anxiety and arms races among neighboring countries, especially adversaries, leading to an escalating cycle of competition that is difficult to stop. The U.S., Europe, and the former Soviet Union all used their military-industrial advantages to control numerous smaller nations. Decisions on whether to sell advanced weaponry, how much to sell, and when to sell became key diplomatic bargaining tools.
In my view, the strategic significance of vigorously developing military-industrial exports lies in at least three aspects:
1) Boosting domestic military strength and dual-use technology development: Greater sales revenue directly supports the continuous improvement of national military capabilities and the advancement of dual-use technologies.
2) Capturing as much of the international market as possible: This helps slow the growth of the military and technological capabilities of adversaries and potential rivals by limiting their access to markets and resources.
3) Creating dependency among military and political elites in middle-ground countries: By fostering reliance on our advanced military systems, we can secure as much global market share as possible for our high-end civilian products in an increasingly fragmented global economic system.
Imagine this: if Europe’s national security were primarily dependent on advanced military systems provided by us, would they still use “national security” as an excuse to exclude Huawei from their markets?
To capture external markets, we should proactively invite military-industrial powers like the U.S., Russia, and Europe to participate in a global “arms competition.” Some argue that for Chinese military exports to truly take off, they need a real-world conflict to prove their capabilities. However, given China’s diplomatic principles, we obviously cannot start a war just to sell products. Since we cannot engage in “armed competition,” why not organize “peaceful competition”? Let’s see who’s better: Are the performance metrics reliable? Are the advertised specifications truthful? Global military-industrial players can showcase their products in a live, competitive environment rather than static displays. Aside from political factors, the outbreak of war is also related to differences in the perception of each side’s relative strength and willingness to engage in war. Arms races and public demonstrations of military capabilities can help reduce misjudgments, thereby lowering the risk of war.
For a declining hegemon like the U.S., its military exports still benefit from the halo and prestige accumulated during its imperial peak. Participating in such open competitions would likely pose greater risks than rewards for them, so the U.S. military and its arms manufacturers would probably refuse. However, this would not prevent us from repeatedly inviting and publicly challenging them, nor would it stop us from inviting third-party countries that have purchased U.S. weapons to bring their American-made equipment to the competition. Such “buyer showcases” are often the nightmare of sellers of substandard products.
Historically, arms races have been viewed negatively, often associated with strategic imbalances and escalating conflicts. However, in today’s context, we should rethink this concept pragmatically. Confucian idealism, such as “cultivating virtue to win over distant peoples,” is a noble aspiration, but in the anarchic international order, Han Feizi’s realism—“train for three years and dance with weapons to compel submission”—may be more practical.
China’s military-industrial development has gone through three distinct phases in the history of the People’s Republic.
1) The first 30 years were characterized by imitation of Soviet military technology. In the early 1950s, the Soviet Union provided extensive assistance to China, primarily in military and heavy industry projects. The Type 56 semi-automatic rifle, for example, was based on the Soviet AK-47. These weapons proved highly effective, such as during the 1962 Sino-Indian border conflict.
2) The second 30 years began with the reform and opening-up period, during which China studied and emulated American military equipment, while also drawing lessons from European and Israeli designs. The Soviet approach emphasized system-level efficiency, while American designs often prioritized achieving overwhelming superiority in specific metrics, such as range or stealth. China’s military industry excelled at reverse engineering, creating simplified versions to ensure that “we have what others have.”
3) In the post-financial crisis era, as China’s industrial capacity and overall technological level have significantly advanced, the development of China’s military-industrial complex has entered its third phase. This phase is characterized by continuous independent innovation, building upon the foundations of prior learning and integration, and achieving breakthroughs that surpass the original “teachers.” I’ve heard multiple anecdotes from friends illustrating this phenomenon: U.S. arms manufacturers publicly advertise that their products achieve a certain key performance metric, let’s call it “Level A.” Chinese military experts take these claims at face value, using “Level A” as a benchmark and working tirelessly to exceed it, eventually reaching “Level B.” However, when the two sides finally compare their work, it turns out that the U.S. manufacturers’ “Level A” was a marketing exaggeration—an idealized claim presented as reality, which they had yet to fully achieve. Meanwhile, Chinese military technology had already surpassed it. According to media reports, such cases have occurred in areas like electromagnetic catapults, hypersonic missiles, railguns, radars, and drones.
While I don’t specialize in military technology or consider myself a military enthusiast, I do know of a classic example involving the father of a long-time friend of mine. During the first 30 years after the founding of the People’s Republic of China, in support of global revolutions and the liberation of the Third World, China provided military aid to other nations. A senior general once vividly recounted to me how he navigated a single ship across thousands of miles to deliver military supplies to Africa, competing with the Soviets for the revolutionary friendship of newly independent African nations.
During the second 30-year phase, under Deng Xiaoping’s leadership, China maintained its role as an arms supplier. Deng famously remarked that “we still need to be arms dealers.” However, during this period, China’s arms exports were relatively limited in scale. The growth potential for arms exports was far smaller than that of civilian goods, with arms deals being not only unstable in volume but also constrained by diplomatic considerations. Consequently, many Chinese military-industrial enterprises had to pivot to producing civilian goods to survive, manufacturing items such as televisions and surveillance cameras.
Now, in the new 30-year phase, systemic changes are taking place in China’s relationship with the world. It seems we may have no choice but to strive to become the world’s largest arms exporter. This is not primarily for profit but to squeeze strategic rivals’ military-industrial enterprises out of the global market.
The ancient Europeans said, “If you want peace, prepare for war.” Today, we might say, “If you want lasting and dignified peace, ensure the sustained superiority of your military-industrial system.” May the world become more peaceful.
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]]>The post Chinese Drone Giant DJI Sues Pentagon in Rebellion Against US Blacklisting first appeared on China Academy.
]]>The post Chinese Drone Giant DJI Sues Pentagon in Rebellion Against US Blacklisting first appeared on China Academy.
]]>The post China Calls Intel a Global Security Risk first appeared on China Academy.
]]>On the October 16, the Cyber Security Association of China officially issued an article exposing Intel’s practice of embedding hardware backdoors in its CPUs, purportedly to enable U.S. intelligence agencies to remotely monitor consumers.
The association has called for Intel to undergo a security review, which could significantly impact its operations in China—an essential market that accounts for a quarter of Intel’s global sales. This scrutiny could make Intel lose $12.5 billion annually.
To understand the implications of a security review for Intel, it’s crucial to grasp two key pieces of background information:
First, who is the Cyber Security Association of China?
This organization is a national industry body under the Cyberspace Administration of China, functioning similarly to the Federal Communications Commission (FCC) in the United States. The association includes more than 600 major Internet-related and cybersecurity companies in the country, along with hundreds of experts in the security field. Consequently, a request for a security review by this organization is likely to be initiated.
Second, what are the consequences of being “revied” for cybersecurity in China?
The most recent company to face scrutiny was Micron Technology, which failed a security review and subsequently vanished from the procurement lists of all Chinese government agencies, state-owned enterprises, and public universities.
Micron was once a leading player in the memory chip market, holding a global market share of 24% in DRAM and 11% in NAND flash as of 2023. While its dominance in storage chips is significant. However, in the face of China’s memory chip industry, which is just beginning to develop, it has not chosen to believe in the quality of its own products. Instead, it lobbied the U.S. government to leverage its long-arm jurisdiction for sanctions.
In 2017, as Fujian Jinhua’s first wafer fab was under construction, Micron urged the U.S. Department of Commerce to place Fujian Jinhua on the entity list, a trade restriction list published by the US government.
In 2020, after Hefei Changxin and Yangtze Memory achieved technological breakthroughs in flash memory, Micron once again lobbied the U.S. government, leading to sanctions against these two companies.
Since 2018, Micron has submitted 170 lobbying requests to the U.S. government, with approximately 67% related to China. To put it bluntly, this is like Bolt having to run to an elementary school and cripple all the kids in order to maintain his Olympic gold medal.
In response, China conducted a review of Micron’s products in 2023 and announced in late May that the company had failed to pass. Consequently, China ceased purchasing Micron products for all its network infrastructure and office equipment. Although Micron attempted to use financial strategies to stabilize its stock in the week following the sanctions, its stock price plummeted throughout June 2023, falling from $73.99 to $60.73 per share—a decline of approximately 18%—resulting in a market value loss of about $14 billion.
It now seems almost inevitable that Intel will follow in Micron’s footsteps, as China has flagged a risk associated with Intel CPUs for all consumers.
Since 2008, Intel has embedded a subsystem called Management Engine in almost all of its own chipsets, equivalent to the CPU that comes with a simple operating system, allowing it to operate independently of the installed operating system as long as the motherboard is powered. When connected to a network, it can send and receive data packets.
According to Intel’s official document, the Management Engine is an embedded microcontroller running a lightweight microkernel operating system that provides a variety of features and services for Intel processor-based computer systems. At system initialization, the Intel Management Engine loads its code from system flash memory. This allows the Management Engine to be up before the main operating system is started.
Since its release, Intel’s Management Engine has faced significant skepticism. Many question the necessity of a CPU performing tasks typically reserved for an operating system. Additionally, the Management Engine is a closed-source black box, leaving users in the dark about its potential capabilities. Only Intel knows its limits, and the company’s assurances of the subsystem’s security rely solely on its unilateral commitment. This raises concerns about accountability, as Intel acts both as the athlete and the referee in this scenario. Who can guarantee impartiality?
Secondly, there is no official shutdown switch for the Management Engine; as long as it is powered, it will remain operational. Intel has not provided a clear description of the technology or functions within the Management Engine, and its roles and risks are being gradually uncovered by researchers worldwide.
Within the Management Engine lies a feature known as Active Management Technology (AMT), designed for device administrators to remotely access computers for various “system fixes.” According to a 2008 official Intel document, AMT can identify computer assets on a network and access them even when the computer is turned off. That means as long as your computer is plugged in, they’ll have access.
Although this document asserts that the AMT system cannot be shut down, a Russian cybersecurity firm called Positive Technology discovered in 2017 that the firmware of the Management Engine contains a switch capable of disabling it. Notably, the comments associated with this switch clearly state “High Assurance Platform.”
High Assurance Platform is a program of the U.S. National Security Agency, aims to provide the U.S. government and military departments with a highly secure computing and communications environment. This implies that while Intel possesses the capability to ensure the security of all users, its protections are only directed toward U.S. government and military customers.
By now, many of you may already understand why China is initiating a security review of Intel. However, the question remains: why is China only starting this review now, after 16 years of known security risks? This situation can be attributed to three key factors.
First, Chinese officials and the military have long relied on domestically produced CPUs, particularly from a manufacturer called Shenwei, which has safeguarded China’s most sensitive information. However, due to limitations in production capacity and the need for secrecy, Shenwei’s products have not been widely promoted in the market.
Second, on September 2, China’s KrF and ArF lithography machines have both achieved technological breakthroughs and are ready for market promotion. Among them, the more advanced ArF lithography can achieve less than 65nm resolution, reaching a less than 8nm nesting accuracy.
Third, on October 15, China’s Longxin Zhongke Technology officially announced that its desktop CPU 3B6600. It will be released for sale in the second half of next year. It utilizes a domestically designed instruction set, eliminating the need to rely on any foreign licensed technologies. Its overall performance is comparable to Intel’s 10th-generation Core processors launched in 2020. In other words, if you are just using it for office work, it can fully meet your needs.
In the past, sanctions against Intel’s CPUs might not have severely impacted government and military operations, but they could have left the general public in a difficult position. However, since October 2024, China now has the confidence to say no to Intel.
The Cyberspace Security Association of China noted that Intel has been the biggest beneficiary of Biden’s Chip and Science Act, received $8.5 billion in direct subsidies and $11 billion in low-interest loans.
To curry favour with the U.S. government, Intel has taken a stance against China on the Xinjiang issue, pressuring its suppliers to refrain from using any labour from that region and halting the procurement of products or services connected to it. At the same time, nearly a quarter of Intel’s global annual revenue, which exceeds $50 billion, comes from the Chinese market. While it’s clear that Intel has “Bite the hand that feeds it”.
In a few months, Intel’s good days will likely be coming to an end.
The post China Calls Intel a Global Security Risk first appeared on China Academy.
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