Xi-Trump meeting: How US-China AI rivalry is pushing China’s tech industry forward

Chinese President Xi Jinping is set to meet with US President Donald Trump in Washington on Thursday, with AI expected to be a key topic of discussion. The two nations have also agreed to an AI hotline to warn each other about potentially dangerous or uncontrollable AI systems. Historically, the US viewed China primarily as a fast follower in technology, but recent developments suggest China is now pursuing advancements in areas such as artificial intelligence, chips, robotics, and advanced manufacturing.

US pressure on China has prompted Beijing to invest more in domestic technology development, including support for semiconductors, robotics, and advanced manufacturing. China's 15th Five-Year Plan, targeting 2026 to 2030, emphasizes technological self-reliance to reduce dependence on foreign technology and bolster domestic capabilities.

President Xi has personally advocated for increased investment in basic science and hard technology, urging early support for smaller projects and long-term continuation. At the National Science Conference in Beijing, he called for greater AI cooperation while warning against creating "new historical injustices." Meanwhile, the US is attempting to impede China's access to advanced technology through expanded sanctions and the Pax Silica initiative, which aims to strengthen AI, semiconductor, and critical-mineral supply chains among trusted partners.

Washington is also encouraging other nations to choose between competing technology systems, warning some countries that they may be excluded from a US-led AI coalition if they join a competing Chinese framework. China's historical response to foreign technology restrictions, such as after the Soviet Union withdrew technical experts in the 1960s, has led to self-reliance in nuclear and ballistic capabilities, as well as the development of its own navigation system, BeiDou.

This approach was also seen during the 1996 Taiwan Strait crisis, which prompted China to develop its own satellite navigation system, BeiDou. Additionally, China's move away from its older property- and consumer-led growth model has seen it allocate more resources towards semiconductors, advanced manufacturing, and humanoid robots as crucial national industries.

Three major tools support China's technology push: capital, talent, and international academic cooperation. China's growing IPO market and the rise of scientist-entrepreneurs have transformed how money reaches technology companies, with financial markets increasingly backing hard-tech businesses. In 2025, China spent over 3.9 trillion yuan ($568 billion) on research, with basic research spending reaching nearly 280 billion yuan (7% of total research spending).

The national venture capital guidance fund aims to support early-stage technology companies, mobilizing approximately 1 trillion yuan ($145 billion) in total capital. China has also attracted world-class researchers and academics, such as Nobel Prize-winning chemist Omar Yaghi, Nobel chemistry laureate Hartmut Michel, Nobel economics laureate Philip H. Dybvig, Nobel physics laureates Ferenc Krausz and Andre Geim, Nobel laureate in physics Ferenc Krausz, Fields Medalist Ngô Bảo Châu, and Nobel Prize laureate Ngô Bảo Châu, joining Chinese or Hong Kong institutions.