Quantum Race: US Must Watch China's Ecosystem, Experts Say

The race for quantum supremacy is heating up, and according to experts at the Special Competitive Studies Project (SCSP), the United States must closely monitor China's state-backed quantum ecosystem to maintain competitiveness in this transformative technology. Quantum technology, which leverages the physics of subatomic particles, promises to revolutionize security, communications, and computing. For instance, quantum navigation could address GPS vulnerabilities like outages and cyberattacks, while quantum networks could enable ultra-secure information transfer. Quantum computing, meanwhile, could accelerate scientific discoveries and optimize supply chains by rapidly identifying optimal solutions among countless options.

China's approach to quantum development is notably top-down, with state-affiliated telecom giants like China Telecom funding a network of quantum startups. According to Dr. Damien Bérubé, a researcher at SCSP, many of these firms originate from state laboratories or university research groups, maintaining Beijing's influence through funding, ownership, or institutional ties. Datenna, an intelligence platform analyzing Chinese data, reveals that China is creating demand for quantum technology before the market can sustain itself, using state-backed customers and subsidies to build up domestic companies. For example, Origin Quantum, supported by the Chinese Academy of Sciences, is preparing for an IPO with a valuation of approximately $1 billion.

While Chinese quantum companies do not pose an immediate threat to replace U.S. and allied firms in high-end markets, SCSP experts warn that suppliers sustained by protected domestic demand could eventually enter foreign markets with lower prices. The network of contracts should be viewed as an industrial policy map, indicating which buyers sustain certain suppliers and which sectors are receiving demand signals. To learn more about these dynamics, visit scsp.ai.