Inside China’s Technology Drive: Security, Survival and Strategic Leverage

In January 2026, China announced plans that appeared futuristic but are increasingly grounded in near-term feasibility. Its state-run space agency revealed proposals to build solar-powered data centres in space to support advanced artificial intelligence systems, alongside continued investments in space tourism and deep-space exploration. The announcement signalled intent rather than novelty: China aims to shape the next phase of technological development rather than merely narrowing existing gaps.

These initiatives align with China’s long-term objective of becoming a “world-leading space power” by 2045. They also reflect the broader elevation of aerospace and frontier technologies within Beijing’s pursuit of technological self-reliance. Such announcements are no longer isolated. Instead, they point to a sustained pattern of China setting ambitious targets across emerging sectors and aligning state capacity to meet them.

China’s technological acceleration should therefore be understood as strategic rather than incidental. Slowing economic growth, rising exposure to external pressure, and persistent concerns over dependence on foreign technologies have collectively pushed innovation to the centre of national policy. For India—pursuing atmanirbharta alongside manufacturing expansion and innovation-led growth—understanding the scale and coherence of China’s approach has become increasingly important.

Drivers for Chinese Innovation and Implications for India

At its foundation, China’s emphasis on indigenous innovation is driven by economic considerations. Avoiding the middle-income trap has become a central policy concern, reinforced by the belief that long-term growth cannot rely indefinitely on access to Western technologies or export markets. In response, China has prioritised movement up the value chain, focusing on advanced manufacturing, artificial intelligence, clean energy, and high-end industrial systems.

Demographic trends reinforce this shift. As China’s working-age population declines, productivity gains driven by technological upgrading have become essential for sustaining growth. Innovation, in this context, is less a market outcome and more a deliberate response to structural domestic constraints.

This repositioning has important external implications. While India continues to expand its manufacturing base, China is moving towards more advanced technological segments, widening differences in productivity and technological depth. At the same time, China’s entry into frontier industries increasingly overlaps with India’s own ambitions for technological self-reliance, intensifying competition in sectors such as semiconductors, electric-vehicle batteries, and renewable energy technologies.

Economic motivations alone do not fully explain the intensity of China’s technology push. Geopolitical considerations play a critical role. Heightened US-China strategic rivalry has underscored the national security risks associated with technological dependence, particularly in critical supply chains. Export controls on advanced semiconductors and policy initiatives such as the US CHIPS and Science Act have reinforced Beijing’s perception of vulnerability.

Within this environment, innovation functions as strategic insurance. By indigenising key technologies and embedding them within domestic ecosystems, China seeks to reduce exposure to external pressure and enhance resilience against potential disruption. Technological self-reliance is thus framed as both an economic and strategic necessity.

For India, these developments create a complex policy landscape. An era of technology decoupling and politicised interdependence between China and the United States demands careful navigation. Access to platforms, standards, and components is no longer governed solely by market dynamics, and overreliance on any single technological ecosystem carries long-term risks. Preserving strategic autonomy will therefore require more than diversification; it will depend on building credible domestic technological capabilities.

China’s technology strategy increasingly seeks to shape the structure of competition. Rather than competing only within existing markets, it aims to influence how these markets evolve. By consolidating control over upstream capabilities—ranging from battery chemistry and power electronics to industrial machinery, data ecosystems, and software-hardware integration—China raises entry barriers for others. Manufacturing may be geographically dispersed, but control over critical technologies remains concentrated.

For India, the challenge is less about immediate dependence and more about the risk of long-term lock-in. Access to low-cost Chinese technologies can deliver short-term efficiencies but may also create vulnerabilities through standards dependence, supply-chain concentration, and reduced strategic flexibility. In this context, caution reflects pragmatic risk assessment rather than ideology.

China’s innovation strategy also extends into the security domain. As its innovation ecosystem deepens, Beijing has expanded the integration of civilian technological advances with defence applications. Developments in artificial intelligence, unmanned systems, communications, and data analytics serve commercial markets while simultaneously enhancing military capabilities. Institutional coordination enables rapid diffusion of dual-use technologies.

India's Path Ahead

China’s trajectory sharpens the focus on India’s own innovation choices. India possesses significant strengths: a large STEM workforce, globally recognised digital public infrastructure, a dynamic start-up ecosystem, and a competitive IT services sector. Platforms such as UPI demonstrate India’s capacity to build population-scale digital systems combining inclusion, trust, and efficiency. Achievements in space and defence further illustrate the value of mission-oriented governance.

At the same time, constraints remain structural. Persistent underinvestment in research and development—around 0.6 per cent of GDP as against 2 percent plus in case of China—continues to limit the conversion of ideas into scalable technologies. Weak academia-industry linkages and policy uncertainty further discourage long-term risk-taking.

Despite producing 117 unicorns, India’s innovation depth remains uneven. A recent Outlook Business report notes that only 229 patents had been filed by start-ups by April 2025, with two-thirds originating from just two firms. Scale without ownership of intellectual property may support growth but does not ensure strategic resilience.

Bridging the gap with China will require deliberate institutional design. Innovation must be treated as a strategic capability rather than a by-product of entrepreneurship. Addressing R&D underinvestment must be accompanied by procurement frameworks that create assured demand for domestic technologies in areas such as energy systems, electronics, defence-linked manufacturing, and digital infrastructure. Scaling such outcomes will require strengthening university-industry linkages, encouraging patient capital, and prioritising selectively rather than competing across all domains simultaneously.

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About the Author: G. Venkat Raman is Professor at Indian Institute of Management Indore and a Fulbright Fellow, specializing in China studies and geopolitics. His research focuses on global governance, technology–strategy linkages, and state–society relations in China.

This article was originally published in The Tribune as part of an arrangement with the Centre of Excellence for Himalayan Studies