Quantum technology is poised to transform the global economy by revolutionizing computing, communications, and security. As the technology matures, the United States must closely monitor China’s quantum ecosystem, according to experts at the Special Competitive Studies Project (SCSP), a nonprofit initiative focused on strengthening U.S. competitiveness in critical technologies like AI.
China’s top-down approach, with heavy government backing and state-affiliated telecom giants like China Telecom at the center, funds a network of quantum startups, according to data from Datenna, an intelligence platform. “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 at SCSP.
SCSP’s newsletter highlights how China is creating demand for quantum technology before the market can sustain itself. State-backed customers and government subsidies are helping Chinese companies build scale before competing globally. For instance, the Chinese quantum firm Origin Quantum, supported by funding from the Chinese Academy of Sciences (CAS), is now preparing for an IPO with a valuation of approximately $1 billion, according to Datenna.
Potential applications of quantum technology include security enhancements such as quantum navigation systems that could reduce GPS vulnerabilities like outages and cyberattacks. Quantum networks could enable more secure information transfer, while quantum computing could accelerate scientific research or optimize supply chains by quickly finding optimal solutions among thousands of possibilities.
While the rise of Chinese quantum companies does not pose an immediate risk of replacing U.S. and allied firms in every high-end market, SCSP experts caution that Chinese suppliers able to survive on protected domestic demand will eventually enter foreign markets at lower prices. “A network map of these contracts should... 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.
The quantum ecosystem requires collaboration among technology companies, academic institutions, government research agencies, and startups, with supply chains spanning semiconductors, nanotechnology, and photonics. China’s state-backed approach gives it a unique advantage in coordinating these elements, potentially allowing it to dominate key segments of the quantum technology market.
For U.S. leaders in business and technology, the implications are clear: continued investment in quantum research and development is essential to maintain competitiveness. As quantum technology permeates the global economy, understanding China’s strategy will be critical for making informed decisions about partnerships, supply chains, and innovation priorities. More information is available at SCSP’s website.
