China is Recalibrating Its Tech Policy: Elevating Private Enterprise to Counter US Export Controls and Drive Innovation
On June 10, 2025, a critical moment unfolded in the ongoing tension between the United States and China as trade negotiators convened in London. Simultaneously, a powerful narrative emerged on the front page of The People’s Daily, featuring an extensive interview with Huawei’s founder, Ren Zhengfei. This editorial prominence, typically reserved for high-ranking Communist Party officials, signaled a significant political shift orchestrated by China’s top leader, Xi Jinping. With the headline, “The More Open a Country Is, the More It Drives Us to Progress,” this interview marked a decisive pivot in China’s approach to technology and private enterprise amid rising tensions with the United States.
Historical Context: The Struggle and Scrutiny of China’s Private Tech Sector
For much of the last decade, China’s private tech sector has faced intense scrutiny. A sweeping regulatory crackdown beginning in 2021 targeted industry giants like Alibaba, Tencent, and Didi, sending shockwaves through the business climate. Entrepreneurs such as Jack Ma, once hailed as icons of innovation, vanished from the public eye, prompting a chilling atmosphere where risk-taking declined and venture capital dwindled. The message from Beijing was unmistakable: private enterprises could operate, but only under strict Party oversight.
Changing Global Dynamics: The Impact of COVID-19 and US Export Controls
The global landscape has shifted dramatically since those turbulent days. The COVID-19 pandemic illuminated vulnerabilities within international supply chains and spurred a re-evaluation of technological priorities. Compounding these challenges, the United States began tightening export controls, blacklisting several Chinese companies and restricting access to advanced semiconductor technology. In response, China’s recalibration towards technology and innovation has become imperative, with Ren Zhengfei’s interview reflecting this emerging strategy. It suggests a shift where the state recognizes the necessity of a robust private sector, so long as it aligns with national interests.
Ren Zhengfei: The Symbol of Resilience and Progress
Ren Zhengfei’s role within The People’s Daily was strategic; his position as the resilient leader of Huawei illustrates the new narrative Beijing aims to project. In the interview, he embodies determination, acknowledging the challenges his company faces—such as Huawei’s lagging chip technology—but underscoring the importance of resilience and perseverance. The message he conveys is that progress arises not from lamenting obstacles but from diligent, incremental efforts.
The Importance of People: Investing in Human Capital
Ren focuses significantly on human capital, highlighting the contributions of scientists and innovators like Nobel laureate Tu Youyou. He stresses the necessity of investing in basic research, arguing that without a solid foundation in science, advancements will falter. Huawei exemplifies this principle by dedicating a substantial portion—one-third—of its annual R&D budget (approximately $25 billion) to basic research, reflecting a commitment to long-term investment over immediate results.
The Symbiotic Relationship Between Huawei and the State
Despite its label as a private company, Huawei’s success is intertwined with substantial state support. Analysts contend that Huawei’s ascent would have been unthinkable without government backing through preferential policies, access to funding, and a culture deeply embedded in national priorities. As one policy expert noted, Ren Zhengfei’s role today parallels that of Rong Yiren in the reform-era, embodying the dynamic of a state-supported entrepreneur.
Shifting Focus: AI and the National AI Team
The spotlight is now shifting towards artificial intelligence (AI), particularly generative AI, within China’s tech strategy. Initially, Beijing approached AI development with caution due to concerns about disruption. However, the emergence of DeepSeek, a domestic large language model (LLM) boasting capabilities approaching those of GPT-4, has spurred renewed enthusiasm. This highlights an evolving strategy that capitalizes on both state guidance and private-sector innovation.
China’s national AI team represents a unique model that integrates public and private efforts with a focus on collaborative research and data sharing. This contrasts sharply with the proprietary approaches favored by many US tech giants, aiming for rapid scaling of AI breakthroughs in a supportive ecosystem.
Historical Parallels: Science and National Identity
Ren’s reflections draw parallels to pivotal moments in China’s history, particularly Deng Xiaoping’s emphasis on science and technology as tools for modernization following the Cultural Revolution. Just as Deng used science to cement his reforms, Xi Jinping is tapping into high-tech nationalism as a means of consolidating authority and fostering unity amidst economic challenges and international pressures.
Messaging for Domestic and International Audiences
The overarching theme of Ren’s interview is steeped in messaging directed at both domestic and international audiences. As US policies tighten around Chinese access to advanced technology, Beijing positions itself as an advocate for openness—a sentiment that starkly contrasts with its own restrictive domestic tech policies. This complex messaging reflects the dual drive to inspire innovation while maintaining stringent controls.
Rebuilding Trust: A Call to the Private Sector
Ren’s remarks resonate deeply at home, urging a revival of trust between the government and the private sector amid economic challenges, including youth unemployment and declining investment. His narrative aims to galvanize a new generation of scientists, engineers, and entrepreneurs, urging them to embrace resilience in the face of adversity. However, many analysts caution that mere patriotic sentiment cannot substitute for essential structural reforms needed in intellectual property protection and regulatory clarity.
Contradictions in Policy: Rebuttal of US Export Controls
Ren’s interview also directly addresses the ramifications of US export controls on Huawei, which have been in place since 2018. While these restrictions have hampered certain areas of progress, they have also catalyzed significant domestic investment and innovation. Recent advancements in Huawei’s 5G technology and AI chips demonstrate a growing resilience and ability to adapt amidst external pressures.
The Path Forward: Confidence and Pragmatism
China’s recalibrated tech strategy illustrates a blend of confidence and pragmatism. By elevating the role of private enterprise, prioritizing foundational research, and promoting state-guided collaboration, Beijing is adapting to rapidly evolving global circumstances. This dynamic is crucial as both China and the United States navigate the competitive landscape of technology and innovation.
Ren Zhengfei’s interview stands not only as a testament to China’s ambitions but also as a reminder of the high stakes involved in this intricate dance between nations.
