Chinese Government Pushes AI Independence to Solve Semiconductor Restrictions

Chinese leadership has placed strong emphasis on achieving independence in artificial intelligence and semiconductor technology as the country faces growing restrictions in accessing advanced chips. The policy direction highlights the urgency of building domestic capabilities in order to reduce reliance on foreign technology suppliers.

During the closing ceremony of China’s major political meetings, commonly known as the Two Sessions, President Xi Jinping walked toward the podium while senior party officials welcomed him with applause at the Great Hall of the People in Beijing. The event marked a significant moment where national priorities on technology and economic restructuring were clearly outlined.

President Xi stated that shortages in strategic supplies, especially semiconductors and other key components, must be resolved as quickly as possible. According to his remarks, the country cannot remain in a position where essential technology cannot be obtained regardless of financial resources or diplomatic efforts. This statement reflected concerns over external restrictions that have created major obstacles for China’s artificial intelligence development.

The comments were delivered during a meeting of the Chinese People’s Political Consultative Conference, which took place alongside the National People’s Congress as part of the annual Two Sessions gathering. These meetings serve as the platform where China sets its economic and technological direction for the coming years. With strict export controls on semiconductor technology from the United States, Chinese leadership described the situation as a serious bottleneck that must be overcome through self-reliance and domestic innovation.

At the conclusion of the meetings, the government approved the 15th Five-Year Economic Plan covering the period from 2026 to 2030. The plan outlines a transition away from a traditional manufacturing-driven model toward an economy focused on high-value technologies, with artificial intelligence at the center of future growth. The leadership set an annual growth target between 4.5 percent and 5 percent, which is the lowest in decades, signaling that quality and sustainability of development are now considered more important than rapid expansion.

The new strategy places strong emphasis on intelligent economic growth, meaning that innovation, digital technology, and advanced research will guide development rather than mass production alone. Officials indicated that achieving technological independence may slow short-term growth, but it is necessary to ensure long-term stability. Analysts believe the policy also shows that China will no longer rely on indirect access to foreign technology through domestic companies, which could deepen the technological gap between China and the United States.

In the draft of the new five-year plan presented by Premier Li Qiang to the National People’s Congress, artificial intelligence was mentioned dozens of times, far more frequently than in the previous plan. The document also repeated the importance of innovation and science, clearly identifying scientific and technological self-sufficiency as the highest priority for economic development.

One of the major goals in the plan is to reach widespread AI adoption across industries by the year 2030. The government intends to rely mainly on domestic companies instead of foreign providers. This approach involves a coordinated system where government institutions and private companies work together under a unified national strategy. The plan includes steady increases in research funding, construction of large data centers, and the training of a large number of AI specialists, including professionals returning from overseas.

Government spending on science and technology will continue to grow, with the national budget for research rising significantly compared to the previous year. This funding will support projects designed to strengthen local chip production, software development, and artificial intelligence platforms.

A major obstacle for China remains advanced semiconductor manufacturing. The country cannot obtain extreme ultraviolet lithography machines, which are required for the most advanced chips. Because of this limitation, Chinese companies are behind leading manufacturers in Taiwan and South Korea in producing high-performance processors. This gap directly affects the ability to build competitive AI hardware.

To address the problem, the government is focusing on advanced chip packaging and chiplet technology. Instead of relying only on cutting-edge manufacturing processes, engineers can combine several smaller chips into one package to achieve higher performance. Officials consider this approach a way to bypass technological barriers and continue progress even without access to the most advanced equipment. Plans include building new packaging centers in major industrial cities and increasing investment through the national semiconductor fund.

The effort to localize artificial intelligence technology is already influencing the industry. A Chinese AI startup was expected to introduce a new multimodal model capable of handling images, audio, and video during the Two Sessions, but the announcement was postponed until after the meetings ended. The model was expected to be much cheaper than similar systems developed overseas, which could have created strong Chinese government prioritizes AI self-reliance to overcome semiconductor challenges

Reports previously suggested that the system had been trained using high-performance chips produced by an American manufacturer, which are restricted from export to China. Because of these restrictions, the company may need to switch to locally produced semiconductors. Industry observers believe the delay could be related to adjustments required to comply with the government’s policy of technological independence.

Overall, the latest policy direction shows that China is preparing for long-term competition in artificial intelligence and semiconductor technology by strengthening domestic production, increasing research investment, and reducing dependence on foreign suppliers.