Quantum technology is set to transform the global economy by revolutionizing computation, communication, and measurement. As this technology advances, the United States must closely monitor China’s quantum ecosystem, where a top-down government approach is shaping research and development, according to experts at the Special Competitive Studies Project (SCSP), a nonprofit and nonpartisan initiative focused on strengthening America’s long-term competitiveness in AI and critical technologies.
Quantum technology, which exploits the physics of subatomic particles, is not new, but current hardware and software enable broader applications. These include quantum navigation systems that could reduce GPS vulnerabilities such as outages and cyberattacks; quantum networks for more secure information transfer; and quantum computing capable of accelerating scientific research or optimizing supply chains by rapidly identifying optimal solutions among numerous possibilities.
Building a quantum ecosystem requires support across supply chains for semiconductors, nanotechnology, and photonics, along with collaboration among technology companies, academic institutions, government research agencies, and startups. China currently boasts an expansive, state-backed quantum ecosystem, according to SCSP experts. Data from Datenna, an intelligence platform analyzing Chinese primary data at scale, reveals multiple state-affiliated telecom giants—with China Telecom at the center—funding a network of quantum startups. “Many of these firms trace their origins to state laboratories or university research groups, where Beijing retains influence through funding, ownership, procurement, or institutional ties,” said Dr. Damien Bérubé, a researcher in Emerging Technology Policy and Quantum Science.
In a recent SCSP newsletter, Bérubé highlighted how Datenna data helps estimate China’s quantum activities. The data indicates that China is creating demand for quantum technology before the market can sustain itself, with state-backed customers and government subsidies enabling Chinese companies to build up before competing globally. For instance, the Chinese quantum firm Origin Quantum received support from the Chinese Academy of Sciences (CAS) and is now preparing for an IPO with a valuation of approximately $1 billion, according to Datenna.
The rise of Chinese quantum technology companies does not pose an immediate risk of replacing U.S. and allied firms in every high-end market, SCSP experts noted. Instead, Chinese suppliers that can survive on protected domestic demand will eventually enter foreign markets at lower prices. “A network map of these contracts should therefore be read less as a list of isolated transactions and more as an industrial policy map: which buyers sustain certain suppliers, which sectors are receiving demand signals, and which firms are being positioned to scale,” the experts concluded.
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