By Hasan Muhammad

Editor's Note: The writer is a freelance columnist on international affairs based in Karachi, Pakistan. The article reflects the author's opinions and not necessarily the views of China Economic Net.

China has released a new two-year action plan for its electronic information manufacturing industry, signaling its intent to strengthen its technological capabilities and reduce reliance on foreign suppliers. Announced on September 5, 2025, by the Ministry of Industry and Information Technology and the State Administration for Market Regulation, the plan outlines goals through 2026, including a 7 percent annual increase in industrial output and a 5 percent rise in revenue for key sectors such as lithium batteries, photovoltaics, and electronic components.

The plan's scope is broad, covering targets like driving server sales above 400 billion yuan, increasing domestic market share for large-screen televisions to over 40 percent, and achieving breakthroughs in advanced personal computers and smartphones. It places emphasis on research and development in semiconductors, 5G and 6G components, and intelligent computing. There is also a clear push into emerging areas such as wearable technology, connected vehicles, and digital healthcare, underscoring China's ambition to lead innovation rather than simply compete with other nations.

The United States has been a driving force behind this shift, intensifying its efforts to slow China's technological development. Washington's recent revocation of "validated end-user" status for major chipmakers such as TSMC, Samsung, SK Hynix, and Intel has introduced new export licensing requirements, complicating the global semiconductor supply chain. These measures have added costs and delays for companies around the world, including U.S. firms. China's action plan aims to mitigate these vulnerabilities by accelerating domestic innovation and supporting national champions in sectors ranging from industrial control systems to the BeiDou Navigation Satellite System.

By now, the United States has introduced measures that effectively impose what industry analysts call a 15 percent "toll" on companies like Nvidia and AMD for conducting business with China. These policies are part of a broader campaign to slow China's rise, but they risk unintended consequences. By undermining supply chain stability, Washington's approach threatens to hurt its own semiconductor sector, which relies on complex global networks and manufacturing capacity concentrated in Asia. China's plan can be seen as both a defensive response to this environment and a long-term effort to achieve resilience.

The strategy blends strong state direction with a role for private enterprise. Rather than pursuing outright protectionism, Beijing is investing heavily in research and development while encouraging competition and innovation within its domestic market. This contrasts with the U.S. reliance on regulatory pressure and export restrictions. By strengthening its internal market while cautiously managing external risks, China is attempting to safeguard its industries without turning inward completely. The plan's language on "prudently addressing international trade barriers" signals a willingness to remain engaged in global commerce, but the emphasis on domestic production shows that China is prepared to stand alone if necessary.

Washington's gamble on chip restrictions reflects an assumption that China cannot quickly close the technology gap. Yet China's action plan demonstrates that it is actively preparing for precisely this scenario. It represents a clear assessment of vulnerabilities and a roadmap for addressing them. The combination of large-scale domestic demand, rapid industrial growth, and targeted government support could allow China to weather trade disputes while positioning itself as a leader in several critical technologies.

Much will depend on execution. Expanding domestic semiconductor capabilities and reducing reliance on foreign suppliers will require time and sustained investment. Building advanced fabrication capacity, designing competitive chips, and scaling production are all challenging tasks. However, China has a track record of setting ambitious industrial goals and mobilizing resources effectively, particularly when national security and economic resilience are at stake.

The action plan signals that China sees technological leadership as central to its long-term stability and global standing. By aligning industrial growth with domestic consumption and pushing for innovation in strategic sectors, Beijing is preparing for a future in which global supply chains may remain fragmented and trade tensions persistent. It is a calculated response to the geopolitical realities of 2025, reflecting both determination and caution.