Quantum technology is poised to transform global computing, communications, and measurement, and the United States must monitor China's top-down approach to quantum research and development, according to experts at the Special Competitive Studies Project (SCSP), a nonprofit and nonpartisan initiative focused on strengthening America's competitiveness in critical technologies.
Quantum technology, which involves the physics of subatomic particles, is not new but is now more accessible due to advances in hardware and software. Potential applications include quantum navigation systems that could reduce GPS vulnerabilities, quantum networks for secure information transfer, and quantum computing to accelerate scientific research or optimize supply chains.
China has built an expansive, state-backed quantum ecosystem, according to SCSP experts. Data from Datenna, an intelligence platform analyzing Chinese primary data, reveals that state-affiliated telecom giants, led by China Telecom, fund a network of quantum startups. Dr. Damien Bérubé, an SCSP researcher in Emerging Technology Policy and Quantum Science, noted that many of these firms originate from state laboratories or university research groups, where Beijing retains influence through funding, ownership, and institutional ties.
In a recent SCSP newsletter, Bérubé highlighted how Datenna data estimates China's quantum activities. The data shows that China is creating demand for quantum technology before the market can sustain itself, with state-backed customers and government subsidies helping Chinese companies build capacity before competing internationally. For instance, the Chinese quantum firm Origin Quantum, supported by funding from the Chinese Academy of Sciences (CAS), is preparing for an IPO with a valuation of approximately $1 billion, according to Datenna.
SCSP experts caution that while Chinese quantum companies do not pose an immediate risk of replacing U.S. and allied firms in high-end markets, Chinese suppliers that survive on protected domestic demand will eventually enter foreign markets at lower prices. They advise interpreting contract network maps as industrial policy maps that show which buyers sustain suppliers, which sectors receive demand signals, and which firms are being positioned to scale.
For more insights, visit scsp.ai.
