How control met competition in China’s technology rise
A decade after Beijing announced Made in China 2025, the country has done what many in Washington and Europe thought improbable, transform from the world’s assembly line into an engine of frontier technology while the Communist Party keeps a tight grip on politics. The change is visible in solar megafactories, in battery plants that feed a global shift to electric mobility, in consumer drones that have become standard gear for videographers and first responders, and in export data that shows China now ships more cars than any other nation.
China reached this point by building a system many scholars call smart authoritarianism. The approach blends digital era instruments of control with enough space for markets, universities, and private inventors to thrive. Instead of blanket repression, authorities emphasize information control, constant monitoring, the outsourcing of heavy coercion, and performance incentives that channel capital and talent toward strategic industries. It borrows lessons from East Asia’s earlier developmental states and from Singapore, now upgraded with sensors, cloud computing, and real time data flows.
Investment in research and development has risen for years. China now produces more science and engineering doctorates than any other country, and many engineers at leading artificial intelligence firms trained inside the domestic system. Homegrown companies dominate solar manufacturing, electric vehicles, and commercial drones. China has become the world’s largest exporter of automobiles and its position in batteries gives it leverage over cost and performance in the EV era. Patent filings, high quality scientific output, and a rapid shift toward higher value manufacturing have pushed China into the top tier of the Global Innovation Index, with some assessments placing it around tenth worldwide.
What smart authoritarianism looks like
Smart authoritarianism rests on three pillars. First, the party seeks granular knowledge of society through pervasive surveillance. Second, it keeps tight control over flows of information. Third, it opens selected parts of the economy and academia to intense competition, foreign collaboration, and venture investment. The result is a system that aims to capture the gains of modernization and innovation while managing political risk.
Tools of control and information management
Police and local cadres now tap into massive databases that combine location pings from phones, travel histories, camera feeds, social media posts, and financial transactions. In Xinjiang, the same architecture has been used to monitor and control millions of Turkic Muslims. Around the country, so called safe city platforms fuse data from streets, trains, schools, and enterprise systems to predict trouble and deter dissent. A central bank digital currency trial adds a new layer of visibility into payments, and officials require apps that nudge citizens and bureaucrats to study party doctrine. These tools scale because Chinese firms work closely with state agencies and because the systems are affordable for developing countries.
Human Rights Watch, a non governmental organization that investigates abuses, has warned that this technology centric model blends social control with efficiency and is now spreading beyond China’s borders. The group captured the core logic in a stark line.
The Chinese government hopes that technology will help it cement its chillingly innovative form of government.
Inside China, the same data pipelines also power public services. Health code systems and city dashboards helped officials manage the pandemic, from tracking exposures to routing supplies. The combination of convenience and control makes the architecture attractive to governments that want better service delivery while retaining the upper hand.
Space for markets and universities
At the same time, Beijing has carved out room for private enterprise, competition between regions, and targeted openness in higher education. Universities grew rapidly, joint labs with foreign partners trained a generation of scientists, and venture capital poured into startups. The state directed support to strategic sectors, but private firms drove many of the breakthroughs and took on the risk of commercialization. Periodic crackdowns on powerful platforms and tutoring giants showed where political red lines sit, then regulators eased off in some areas to restore confidence and investment. That calibration, tight one year and looser the next, is a hallmark of the model.
What the results look like on the ground
The payoff is visible in specific markets. In solar, Chinese companies control most stages of the supply chain, from polysilicon to modules, which pushed down global prices and accelerated renewable adoption. In batteries, Chinese cell makers now set industry benchmarks on cost, energy density, and manufacturing scale. In autos, brands that were once dismissed now export at record volumes and sell competitive electric models in Europe, the Middle East, and Latin America. In drones, a few firms command the civilian market worldwide with hardware, software, and cloud tools engineered to work together. Beyond these headline sectors, China is making inroads in biomanufacturing, industrial robotics, and satellites.
Human capital and research
With decades of investment in human capital, the pipeline of talent is now large. China turns out the most science and engineering PhDs on the planet and has raised the quality of its universities, especially in engineering and applied sciences. Research output has surged and the number of highly cited papers has climbed. Crucially, the country has moved from assembly to design in many industries. Venture funding cycles produce engineers who rotate between startups and big firms, carrying tacit knowledge into each new effort.
During the pandemic, the state and private sector mounted rapid experiments that showed how this system can mobilize at speed. Health code apps gatekept public spaces to slow contagion, e commerce and logistics groups built non contact delivery at scale, schools turned to distance learning, and companies adopted cloud offices to keep operations moving. Government agencies acted as controllers or endorsers depending on the service, and firms pursued both pro social and pro economic goals. The combined effect strengthened the habit of using data and software to solve concrete problems.
Exporting the model through the Digital Silk Road
Beijing is also wiring much of the developing world. Under the Digital Silk Road banner, Chinese vendors build core pieces of digital infrastructure, from 4G and 5G networks to smart city platforms, cloud data centers, and subsea cables. The BeiDou satellite navigation system is now embedded in a wide array of devices. Chinese cloud providers and payments platforms are expanding along trade routes. Financing from state banks and aggressive pricing help win deals in markets where budgets are tight and security risks feel abstract.
These exports create long term dependencies. Equipment vendors that control software updates can gather data or shape networks. Smart city kits arrive with surveillance defaults, and contractual terms often shift data storage into partner clouds. Some projects come wrapped in opaque debt. Policy experts argue that affordable alternatives matter as much as security warnings, and they point to open radio access networks as one way to reduce reliance on a single supplier. Without choices that match on price and performance, many governments will keep buying from whoever shows up with a complete, cheap stack.
Can control and innovation stay in balance
The long running question is whether centralization under Xi Jinping will dull the creative edge that fueled much of this rise. The party has tightened its grip over civil society and media, punished outspoken entrepreneurs, and leaned on a toolbox that prizes stability above freewheeling experimentation. Critics warn that loyalty based appointments narrow the flow of accurate information to the top and that the continued weight of state owned enterprises distorts capital allocation. Supporters counter that Beijing has learned to reverse course when policies overshoot and that targeted flexibility still exists inside labs, factories, and municipal pilot zones.
Jennifer Lind, an associate professor of government at Dartmouth College who studies East Asia and smart authoritarianism, argues that the technology of control has reached a new stage and that this has shaped how the system calibrates pressure.
Technologies of repression have really advanced. We are also seeing a movement toward the use of biometrics, which is really scary.
Democratic responses and the race for standards
Democratic governments are responding with a mix of controls and capacity building. The United States has tightened export controls on advanced chips and manufacturing tools, screened inbound and outbound investment, banned insecure telecom equipment from public networks, and enforced restrictions on imports tied to forced labor. Agency rules give the executive branch new powers to review technology transactions. Procurement bans keep certain vendors out of government systems. Allies are aligning on parts of this agenda and funding their own alternatives, from secure cloud to satellites. The common goal is to reduce strategic dependencies without severing all trade.
Quantum, digital currencies and the next wave
The next set of technologies could tilt the environment further toward data centric governance. Chinese research groups are pushing to build quantum computers capable of threatening today’s encryption, which raises the risk that data stolen now could be decrypted later. China operates the Mozi satellite for quantum key distribution and is building a national quantum network, while planning cross border links with partners in BRICS. At home, a central bank digital currency gives authorities direct visibility into transactions, and projects like mBridge test cross border uses that might soften the bite of sanctions. Security researchers urge fast adoption of post quantum cryptography, transparency in AI surveillance, and active engagement in standards bodies.
Companies and civil society
The private sector and civic groups will shape what happens next. Major American technology companies have at times complied with censorship and security demands inside China, shared know how with entities linked to the state, or sourced from suppliers accused of using forced labor. These choices built a web of dependencies that now complicates policy. At the same time, civil society organizations are working to counter digital authoritarianism by building tools to bypass censorship, audit algorithmic systems, and make public data usable for accountability. Their work underlines a simple point, technology governance is not only about statecraft, it is also about the values coded into everyday platforms and services.
Key Points
- Beijing paired selective openness with tight control to build a smart authoritarian system that can still generate innovation.
- China invested heavily in research and development and now produces the most science and engineering PhDs.
- Domestic firms lead in solar, batteries, electric vehicles, and drones, and China has become the top car exporter.
- Surveillance and data platforms, including safe cities, health codes, and a digital yuan trial, give authorities granular visibility.
- Through the Digital Silk Road, Chinese tech and financing are wiring developing countries and creating digital dependencies.
- Human rights groups warn that this model blends efficiency with repression and is spreading to other states.
- Centralization under Xi Jinping risks dampening innovation, though policy reversals show ongoing calibration.
- Democracies are deploying export controls, investment screening, and secure alternatives to reduce strategic reliance.
- Quantum research and central bank digital currencies raise new security concerns, pressing a shift to post quantum cryptography and stronger standards.
- Corporate choices and civil society efforts will shape whether emerging tech supports open or closed systems.
