Making Waves Quietly: China’s Quantum Technology Policy Momentum

Quantum technology is increasingly an area of intense technological competition and strategic policymaking for both China and the United States. China, once a relative latecomer, now spearheads the development of certain areas of quantum technology, an umbrella term that includes quantum computing, quantum sensing, and quantum communications. The fast development has been enabled by significant public funding and high-level political attention for more than a decade.

Chinese researchers achieved scientific breakthroughs such as the world’s second quantum supremacy experiment or the first exchange of entangled photons with a satellite. These advances were made possible by state-led efforts; some estimate that China accounts for roughly 50 percent of public investment toward quantum since 1985, at more than $15 billion. Venture funding pales in comparison: It’s estimated at around $250 million since 2021 and is distributed to over 30+ companies.

The total number of Chinese firms involved in quantum technology was estimated at over 130 companies in April 2023, including state-owned enterprises. However, different published reports provide different numbers, likely due to rapidly changing situations and lack of transparency on the public funding side. The line between public and private is also dynamic. Just recently, both Baidu and Alibaba gave up their quantum computing efforts, donating all their equipment to public laboratories after billions of dollars in investments.

Notably, besides Beijing and Shanghai, a modest tier-two city called Hefei in Anhui Province has become a quantum hub in China. Today, it features not just China’s national quantum laboratory and the University of Science and Technology of China, but also a vibrant start-up ecosystem. Hefei’s so-called quantum avenue is home to some of China’s earliest quantum start-ups, such as Anhui Qasky Quantum, QuantumCTEK, CIQTEK, and Origin Quantum, as well as research arms of big corporations such as the China Telecom Quantum Information Technology Group.

To put things into perspective, the United States is still the world’s leader, with 10 times the number of quantum start-ups and six times more investors compared to China. Nonetheless, quantum technology in China, heavily relying on public funding, is without doubt making rapid advances beyond the already impressive scientific publications. While the U.S. private sector’s quantum technology is unparalleled and its leadership in quantum computing unquestioned, so is China’s roll-out of quantum cryptography, a technology for highly secure transmission of information based on quantum mechanical principles.

The quantum sector in China, just like other sectors, is heavily shaped by the state-level policy direction. Starting from the Science and Technology Development Plan in 2006 and moving through the three Five-Year Plans in 2011, 2016, and 2021, quantum technology has been featured more prominently and with greater application details in Chinese state planning.

The 2006 National Medium- and Long-term Science and Technology Development Plan Outline was the first to highlight quantum research as part of a major scientific research plan. Quantum communication also received a mention as a key area where China should make initial strides in the 12th Five-Year Plan for Science and Technology Development, issued in 2011.

The “Made in China 2025” policy from 2015 mentioned quantum computing as a targeted area of development in the section of information technologies, memories, and storage. The following year, the 13th Five-Year Plan for Economic and Social Development highlighted quantum information again in connection with cybersecurity. Also in 2016, the National Innovation-Driven Development Strategy mentioned quantum information as a key area where China should seek to catch up with and surpass advanced economies.

In 2018, the government issued “Several Opinions of the State Council on Comprehensively Strengthening Basic Scientific Research.” The opinions discussed the whole quantum industry in greater detail, including talent development and the role of regional governments. Indeed, China’s complex quantum ecosystem involves both national- and province-level policy infrastructure and talent development – a topic that is little discussed in foreign analyses of China’s quantum tech industry.

The most indicative pronouncement from the state was the 2020 Politburo study, a dedicated strategic planning session for the most powerful decision-making body in China. After that turning point, China’s state policy toward quantum became more detailed.

2021’s 14th Five-Year National Informatization Plan included a comprehensive report on the multiple applications of quantum technology. The plan discussed related regulations, including strengthening IP, and its implementation guideline highlighted achievements in quantum computing and information in the context of other technologies. The 20th Party Congress Report, issued in 2022, underlined quantum information and supercomputing as key areas of achievement and development focus.

Just as China’s state pronouncements have grown more detailed, private analysts have focused more attention on quantum tech. In the 2020s, more market intelligence and think tanks based in China started to shed light on the commercial and public development of quantum technologies. Numerous public reports sought to contextualize China’s development on the international stage.

Based on this overview of China’s quantum policy approach, some clear trends emerge. There was very early support for quantum cryptography/quantum communications in China, which intensified from 2013, potentially as a reaction to the Snowden leaks. The policy focus on quantum technology in China has evolved through three phases: Until 2015, the emphasis was on supporting research and the development of core technologies. From 2016 to 2020, the focus shifted toward promoting the exploration of applications and encouraging industrialization. Since 2021, the strategy has expanded to further industrialize quantum technology and introduce relevant standards and regulations.

This field has garnered high-level political attention, evidenced by Xi Jinping's personal visits to China’s leading quantum researchers in 2013 and the dedicated session on quantum technology held by the Politburo in 2020.

In contrast, the United States has historically assigned less importance to quantum cryptography. Quantum technology more broadly has received U.S. policy support since the early 2000s, when quantum science was still nascent in China.

While policies in both countries have historically focussed on the domestic support of science and technological application, technological competition increasingly brings quantum into the spotlight of international policies as well. Understanding the evolution of China's quantum technology policies is therefore more important than ever.