OPINION: How data, engineers and state power drive China's tech rise Views of China tend to split neatly into two camps. One dismisses it as a country of imitators. The other fears it as an unstoppable technological juggernaut powered by a vast market and a disciplined state. Both views miss the same point. China’s defining advantage is scale. In a country of 1.4 billion people, even meaningful technological progress can appear underwhelming when measured per capita. But scale has a way of turning incremental gains into structural power. What looks modest in isolation becomes formidable when multiplied across an economy large enough to test, refine and deploy technology at speed. That is the context in which China’s scientific and technological rise should be understood. Its domestic market functions as a giant test bed, allowing ideas to move from lab to factory floor to mass adoption faster than in most advanced economies. China’s strength ultimately comes down to people. It is often described as a nation of engineers, and not without reason. President Xi Jinping, like several of China’s past leaders, was trained in science and engineering — a detail that reflects a broader technocratic tradition at the top of the system. Through gifted education tracks and an engineering-centered university pipeline, China produces millions of science and engineering graduates every year. While South Korea and the United States wrestle with a steady drift of elite students toward medical schools, China has continued to train talent in artificial intelligence, semiconductors and aerospace at a national scale. The strong presence of Chinese universities in global AI rankings is no accident. Many Chinese students who once went abroad have returned home to start companies, while manufacturing expertise accumulated over three decades as the world’s factory is now feeding domestic innovation. The skills honed in producing goods for Apple, Nike and Louis Vuitton are being repurposed to build Chinese brands — and increasingly, Chinese technologies. Unlike Western democracies, where science and technology policy can swing sharply with electoral cycles, China’s one-party system enables long-term planning. Beijing directs national resources toward a set of “emerging” and “future” industries designed to strengthen what it calls “new quality productive forces.” Local governments from Hefei to Shenzhen compete fiercely to build advanced industrial clusters, experimenting with policy models that are later replicated nationwide. Massive state investment, often tolerant of failure, allows firms to take R&D risks that would be politically or financially difficult elsewhere. At a time when South Korea is trimming or reallocating research budgets, China is still writing large checks to close strategic technology gaps. Critics often argue that socialist systems struggle to sustain creativity under heavy ideological control. In technology, China again complicates the stereotype. In practice, its tech sector can be brutally market-driven: if something makes money, capital and talent rush in. China’s much-maligned “shanzhai” culture — a phase of copying and imitation — was less a dead end than a training ground. The supply chains, tooling expertise and manufacturing discipline built during that period now underpin innovation in electric vehicles, batteries and consumer electronics. Few countries illustrate more clearly how markets, not ideology, ultimately shape technological outcomes. The same dynamic is visible in China’s digital transformation. During and after the pandemic, the country accelerated toward what officials describe as a “five-no” society: no cash, no cards, no wallets, no face-to-face transactions and no waiting in lines. The result has been an explosion of real-world data. Under its “AI+” strategy, Beijing is pushing artificial intelligence into manufacturing, healthcare, education and finance. The goal is not simply efficiency gains, but the redesign of social and industrial systems around digital tools. Smart factories, AI-assisted medical services and personalized education platforms are no longer pilots — they are being deployed at population scale. In the AI era, data is often likened to oil. Here, China holds a clear advantage. Unlike Western countries constrained by strict personal-data protections, Chinese companies and authorities operate in an environment where population-scale data can be used with relatively few barriers. Combined with aggressive investment and a deep bench of engineers, this gives China a powerful edge in applied AI. Within years, industrial AI trained on data from factories, hospitals and transport systems could challenge — or surpass — Western capabilities in areas that matter economically, not just academically. U.S. restrictions on advanced semiconductor exports have slowed China’s access to cutting-edge equipment. Beijing’s response has been pragmatic rather than dramatic: squeezing more performance from legacy processes, investing heavily in advanced packaging, and using its vast domestic market to scale homegrown solutions. At the frontier, technologies tend to converge. China is betting that patience, capital and labor will eventually deliver self-sufficiency. For South Korea, the danger lies in complacency. Treating China as merely a “knockoff country” is no longer skepticism — it is self-deception. China has become a system-level competitor, pressing directly into South Korea’s core strengths in semiconductors, batteries and advanced manufacturing. The response should begin with governance. South Korea needs a stronger national science and technology control tower capable of setting and executing long-term strategy beyond a single five-year administration. It also needs to restore its test-bed capacity through bolder deregulation, expanding regulatory sandboxes so emerging industries can prove themselves without being smothered by incumbent interests. Focus matters, too. South Korea cannot compete with China on volume. Its advantage lies in bottleneck technologies that are hard to copy, such as high-bandwidth memory and processing-in-memory chips. Concentrating national capabilities on these areas is not optional — it is existential. Finally, there is a social challenge. A country that wants to stay technologically relevant must reward engineers. Unless South Korea finds ways to reverse the rush into medical schools and offer top-tier compensation and status to scientists and technologists, no strategy will hold. China’s scale is not something to fear abstractly. It is something to understand, adapt to — and compete against with discipline. In technology, survival belongs not to those who shout the loudest, but to those who execute the longest. Jeon Byeong-seo is head of the China Economy and Finance Research Institute. He holds a master’s degree from Tsinghua University and a Ph.D. from Fudan University, and has served as a semiconductor and IT analyst and adjunct professor at Sungkyunkwan University. * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2026-01-23 08:54:32

South Korea's Strategic Edge in AI Amid Potential Bubble Nvidia announced record earnings on Nov. 19, with third-quarter revenue reaching $57 billion, a 62% increase from the previous year. Despite a net profit margin of 53% and net income of $31.9 billion, its stock fell 6.8% the next day. Wall Street attributes this to extended collection periods for big tech companies like Google, Meta, Microsoft, and Amazon, indicating uncertain returns on AI investments. OpenAI faces more severe challenges. Microsoft, its parent company, has invested $13 billion since 2023, with $11.6 billion already spent. OpenAI's quarterly losses are estimated at $11.5 billion, based on Microsoft's third-quarter report. Nvidia's $100 billion investment in OpenAI involves building data centers and purchasing GPUs, creating a cycle that inflates revenue. Wall Street labels this an 'AI Ponzi Scheme.' Experts warn of a potential collapse if OpenAI fails to monetize. The bubble is expected to burst between 2026 and 2027. Companies that survive will be those integrating AI into manufacturing, healthcare, energy, and defense, not those boasting about large language model parameters. High Bandwidth Memory (HBM) is crucial for AI infrastructure. Jensen Huang, Nvidia's CEO, stated in October 2025, "Without HBM, there is no AI." A single Blackwell B200 GPU requires 192GB of HBM3e, costing $20,000. Over 50% of Nvidia's data center revenue costs are HBM-related, proving its importance. South Korea's SK Hynix and Samsung Electronics control 80% of the global HBM market. SK Hynix's stable yield of HBM3e and exclusive supply to Nvidia drive this dominance. Micron lags in technology, and China is still developing. Yole Group predicts the HBM market will grow from $34 billion in 2025 to $100 billion by 2030. If South Korea maintains its 80% market share for five years, annual exports could reach $80 billion by 2030, doubling the country's 2024 semiconductor exports. A drop to 40% market share would cut exports to $40 billion, with a $200 billion cumulative profit difference. HBM is not just an economic asset but a strategic resource in the AI era, enhancing South Korea's geopolitical standing. The U.S. is investing $52.7 billion through the CHIPS Act, with Intel receiving $8.5 billion, TSMC $6.6 billion, Samsung $4.7 billion, and Micron $6.2 billion. China is investing $48.4 billion in semiconductors. South Korea's control of 80% of the HBM market is akin to the Middle East's hold on oil during the manufacturing era. However, this lead is not permanent. Samsung's HBM3e approval from Nvidia was delayed by eight months, affecting its market share. China's CXMT aims to mass-produce HBM3 by 2026 and HBM3e by 2027, with state funding. Micron plans to catch up with HBM4 by 2026. A single misstep could be costly, as seen with Japan's reliance on rare earths from China. TrendForce warns of potential HBM oversupply and price drops post-2026, advising South Korea to maintain market dominance through production expansion. The solution is simple: elevate HBM to a national strategic asset and legislate an 'HBM Sovereignty Act' to secure South Korea's lead. This support should be viewed as 'defense spending' in the AI race, not corporate welfare. Five steps are needed: establish six HBM4 and HBM5 plants in the Yongin Semiconductor Cluster under a separate entity, with 49% state ownership and 51% Samsung and SK technology. Half the profits would be distributed as national dividends. This approach mirrors U.S. and Chinese strategies, doubling factory output through government and societal participation. Second, invest 50 trillion won in 'HBM defense spending' from 2026 to 2030, offering 60% investment tax credits and 100% R&D tax credits. Yole's forecast suggests this could yield a 400 trillion won profit over five years. Third, designate HBM as a controlled export item, similar to the U.S.'s control over ASML's EUV technology. This would allow South Korea to adjust supply as needed, positioning HBM as an 'AI weapon' and maintaining a neutral advantage in U.S.-China tech conflicts. Fourth, achieve 100% domestic production of key materials and equipment within five years, reducing reliance on Japanese materials and American equipment through focused investment in materials and components. Fifth, address the talent shortage, the greatest risk to maintaining a lead. Secure 10,000 domestic and international Ph.D. holders, offer immediate permanent residency to foreign talent, expand semiconductor department enrollment at universities like KAIST fivefold, and provide government-funded tuition support. During the California Gold Rush, it was the jeans sellers who profited, regardless of who found gold. Similarly, HBM guarantees stable demand, regardless of who strikes gold in AI. To avoid future regret, South Korea must pass bold semiconductor support laws and an 'HBM Sovereignty Act.' This is a once-in-a-century opportunity, and the decision lies with political leaders. South Korea's choice will determine whether it becomes a 'memory empire' in the AI era or remains a parts supplier. About the author ​ Master's from Tsinghua University, Ph.D. from Fudan University, Senior Researcher at Daewoo Economic Research Institute, Semiconductor IT Analyst, Adjunct Professor at Sungkyunkwan University's Graduate School of China, Director of the China Economic and Finance Research Institute * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-11-24 07:16:55

OPINION: China's rapid AI rise signals new phase in global race SEOUL, October 24 (AJP) - The race to dominate artificial intelligence is accelerating — and China is catching up fast. Once seen as lagging far behind Silicon Valley, China’s AI industry has surged forward, led by DeepSeek, a startup founded in 2023 that has quickly emerged as a formidable rival to OpenAI. Within two years, the company introduced its R1 model, which it claims outperforms OpenAI’s o1 system — and did so at a fraction of the cost, roughly $5.6 million compared with the American firm’s multimillion-dollar budgets. DeepSeek’s rapid ascent, showcased in January 2025 when it directly challenged OpenAI’s dominance, underscores Beijing’s growing technological prowess. China now ranks second only to the United States in AI capabilities, buoyed by innovation born of constraint. U.S. export controls on advanced AI semiconductors have hampered China’s access to high-end chips, but Chinese researchers have found workarounds. DeepSeek’s engineers, many of whom were trained entirely within China, have refined algorithms to compensate for hardware limitations — a testament to the country’s ability to stretch software performance to its limits. Domestic chipmakers like Huawei have also made strides, producing processors that perform at 70 to 80 percent of the level of Nvidia’s H100. By creatively linking multiple domestic chips in parallel, they have managed to maintain competitiveness despite U.S. sanctions. Beijing’s commitment to AI as a national priority has further accelerated progress. The government offers generous subsidies, tax breaks, and preferential treatment for domestic firms, part of a broader push to establish technological self-sufficiency. At the same time, China’s massive population — 1.4 billion people generating vast amounts of digital data — provides a unique advantage. Unlike Western countries with strict data privacy laws, China’s relatively permissive environment allows for large-scale data collection and analysis, fueling AI training at an unparalleled scale. Major technology companies such as Baidu, Alibaba, and Tencent, along with a swarm of smaller startups, are investing heavily in AI infrastructure. The country’s focus on STEM education has also created a deep pool of engineers and scientists, supplying the workforce needed to sustain its ambitions. Gross Data Production In the emerging AI-driven economy, some analysts argue that the real measure of power is no longer gross domestic product but “gross data production.” By that measure, China leads the world. The data generated by its vast consumer base and industrial systems has become an irreplaceable strategic asset — the raw material of the AI era. China’s “AI+ manufacturing” strategy aims to fuse artificial intelligence with factory automation to offset U.S. tariffs and reduce labor costs. So-called “dark factories” — fully automated, human-free production facilities — are already operating in some sectors. Xiaomi’s electric vehicle plant, which produces a car every 76 seconds, is often cited as a glimpse of that future. For South Korea, China’s rapid AI-driven manufacturing expansion poses a growing challenge. Korean industries, competing directly with Chinese manufacturers, must find ways to combine their own production data with advanced AI systems — including collaboration with U.S. partners — to stay competitive. The country holds a rare advantage in the global AI race: it produces both high-bandwidth memory (HBM) semiconductors and advanced GPUs, essential components for training large AI models. Analysts argue that Seoul should treat HBM as a strategic resource, using it to secure partnerships with global chipmakers such as Nvidia and strengthen its technological footing. As the AI power struggle deepens between Washington and Beijing, South Korea stands at a critical intersection. By leveraging its semiconductor strength and deep industrial base, it may yet turn the rivalry between the world’s two largest economies into an opportunity. About the author -Master’s Degree, Tsinghua University -Ph.D., Fudan University -Senior Researcher, Daewoo Economic Research Institute -Semiconductor and IT Analyst -Adjunct Professor, China Graduate School, Sungkyunkwan University -Director, China Economic and Financial Research Institute * This article, published by Aju Business Daily, was translated by AI and edited by AJP. 2025-10-24 08:24:08