Xi Jinping’s New Approach : Extracting Strategic Technology from the West and Russia

One of the More Revealing Descriptions of This Approach comes from the PLA Daily : “Picking Flowers in Foreign Lands to Make Honey in China.” 

David Lekaj 

 

 

Beijing is no longer relying on a single route to technological dominance. It is using markets, investment, foreign companies, talent, research networks and strategic partnerships to close the gaps that still separate China from the technological frontier. 

 

 

One of the more revealing descriptions of this approach comes from the PLA Daily: “picking flowers in foreign lands to make honey in China.”

The metaphor captures something fundamental about Xi Jinping’s approach to technological competition. China does not need to invent everything itself. When critical capabilities are missing at home, Beijing can look abroad — to foreign companies, universities, engineers, investors and strategic partners — and find ways to bring those capabilities within reach.

That may mean investment or acquisition. It may mean a joint venture, a technology partnership or the recruitment of a specialist with knowledge China needs. The method matters less than the outcome: reducing the time and cost required to catch up.

This is the logic behind what is often described as China’s “whole-of-nation” approach to technological development. And it extends well beyond the West. Xi’s model combines state direction with market incentives and international engagement. Beijing identifies the technologies it considers critical to national power and security, then mobilises as much of the country’s economic and scientific capacity as possible around those priorities.

That means more than state-owned enterprises and government institutions. Private companies, universities, investors, researchers and the Chinese diaspora are all part of the picture. The result is a system in which the boundary between state policy and private enterprise is often difficult to define.

Marina Zhang, Mark Dodgson and David Gann have described China’s innovation system as a complex, interdependent ecosystem in which innovation emerges from the bottom up, involving hundreds of millions of participants rather than being designed and controlled entirely from Beijing.

Xi has sought to harness that ecosystem for strategic purposes. The state sets priorities and creates incentives. Companies pursue commercial opportunities. Researchers develop new capabilities. Investors provide capital. Overseas networks open doors to expertise and technology. These actors do not necessarily share the same motives. They do not have to. What matters is that their activities can converge around the same national objective. This is one reason why the conventional Western distinction between “state policy” and “private business” can be misleading when applied to China.

The same logic extends to countries that are usually viewed primarily through a geopolitical lens. Russia is a good example. Beijing and Moscow describe their relationship as a strategic partnership and have repeatedly emphasised its political depth. But the relationship is not symmetrical. China still has technological gaps, including in fields where Russia retains capabilities built over decades of military, aerospace and defence research. For Beijing, that makes Russian technology worth pursuing regardless of the broader political narrative. If Russia has a capability China needs, there is a reason to gain access to it.

An anecdote from a meeting between former U.S. National Security Adviser John Bolton and Vladimir Putin illustrates Moscow’s attitude. Putin reportedly acknowledged that Chinese companies had copied Russian technology, while essentially arguing that it was better to sell the technology to China and make money from it than simply watch the advantage disappear.

That is the other side of the equation. China wants access. Russia wants markets and revenue. Their strategic interests overlap, but the relationship remains transactional. For Beijing, ideology is ultimately less important than capability.

Foreign acquisitions and access to expertise form another important part of the strategy. China has spent decades identifying technological gaps and finding ways to close them. State banks, investment funds and government-backed financing can give Chinese companies the resources to target foreign technology firms, particularly when those firms are under financial pressure.

But acquisition does not always mean buying a company outright. Technology can enter through distressed assets, strategic partnerships, joint ventures, greenfield investment or the recruitment of foreign engineers and specialists. Greenfield investment can be especially useful. It allows foreign expertise and production know-how to enter China without requiring the acquisition of the parent company. Over time, Chinese companies can learn from the people, processes and technologies around them while building their own capabilities.

The underlying calculation is simple: why spend twenty years developing something if you can acquire the knowledge that gets you most of the way there? Technological development is cumulative. A company does not need to reproduce decades of research if it can acquire an existing business, recruit the engineers behind it, obtain critical know-how or gain access to an established supply chain. China is therefore not simply trying to build every capability from scratch. It is trying to compress the time required to acquire them.

For years, this strategy benefited from a powerful bargain between China and the West. Western companies saw China as both a huge market and an increasingly attractive manufacturing base. China offered scale, consumers, industrial infrastructure and sophisticated supply chains. Foreign companies brought capital, technology and expertise.

Tesla is one of the clearest examples. Its expansion in China helped accelerate the development of the country’s electric-vehicle ecosystem, while the wider presence of foreign manufacturers and their suppliers contributed to the transfer of industrial knowledge. Beijing also learned how to use its regulatory leverage to encourage technology cooperation, including in its dealings with companies such as Qualcomm.

That environment is now changing. Western governments have become increasingly concerned about technology leakage, supply-chain dependence and the security implications of economic interdependence. Companies, in turn, are beginning to build more resilient and geographically diversified supply chains.

 

 

 The shift is already visible. Tesla has looked beyond China for additional manufacturing capacity. Dell has worked to reduce its reliance on Chinese-made components. Apple has expanded MacBook production in Vietnam. HP has shifted significant laptop production towards Thailand and Mexico. None of this means that Western companies are abandoning China. They are not. But the underlying assumption has changed. The era in which economic integration was expected to deepen almost automatically is over. For Beijing, that matters. Some of the easiest channels through which foreign technology once entered China are closing.

This is where the tension within Xi’s strategy becomes more apparent. China still benefits enormously from access to the global technology system. Foreign technology can accelerate domestic development by years. At the same time, Xi’s broader agenda places increasing emphasis on technological self-reliance, national security and tighter economic control.

Those objectives do not always sit comfortably together. The more Beijing prioritises security and political control over openness, the harder it becomes to preserve the international environment that helped China acquire foreign technology in the first place.

Semiconductors illustrate the problem better than almost any other sector. China has made remarkable progress in electric vehicles, telecommunications and advanced manufacturing. But leading-edge semiconductor technology is much harder to reproduce than many other industrial capabilities. That is why U.S. and allied export controls matter. They are not simply restrictions on individual products. They are aimed at technological bottlenecks that China cannot easily replace.

It is tempting to describe China’s approach simply as an effort to “steal Western technology.” That misses the larger picture. Intellectual-property theft has certainly been a persistent feature of China’s interaction with Western economies, particularly during the post-Mao period. But theft is only one mechanism within a much broader strategy.

The objective is technological power. Beijing is pragmatic about how it gets there. If a capability can be developed domestically, it develops it. If it can be bought, it buys it. If investment provides access, it invests. If foreign expertise is available, it recruits it. If a strategic partner possesses capabilities China lacks, Beijing builds the relationship. And when one channel closes, it looks for another. That is the real significance of Xi Jinping’s “whole-of-nation” approach. China is not merely trying to become more innovative. It is treating access to technology, wherever that technology exists, as a strategic question.

The challenge for the West is therefore larger than simply keeping track of China’s technological progress. It is about recognising the system it is competing against — one that treats technology acquisition itself as an instrument of national power. The window in which China could rely heavily on Western technology, capital and expertise to accelerate its rise is narrowing. Beijing understands this. The question is whether the West does.