China recently unveiled a land-based prototype nuclear reactor for a large surface warship. While the addition of this capacity takes it closer towards nuclear powered aircraft carriers, which could help cement its ambition for a world-class, blue-water navy, what is astonishing is China’s underlying science and technology (S&T) ecosystem – from quantum computing to AI, biotechnology to renewable energy – which demonstrates an efficiency and strategic alignment that few countries have been able to replicate.
It shows the importance of what Jeffrey Ding in his book, “Technology and the Rise of Great Powers: How Diffusion Shapes Economic Competition”, calls diffusion of General Purpose Technologies (GPTs). Let’s look at what this is and what India can learn from this.
Whole-System Approach – Technology Diffusion
We all probably know about the difference in research and development (R&D) investment between India and China – 0.7% vs 2.4% of GDP respectively. There are other such statistics which we are well aware of, so let’s not dwell on the data, but let’s look at what makes technological prowess translate to economic productivity.
China’s government, through strategic initiatives like Made in China 2025 and Military-Civil Fusion (MCF), channels this R&D spending into high-impact sectors, including aerospace, nuclear energy, semiconductors, quantum computing, and artificial intelligence.
Massive investment, a deliberate alignment of, and removal of barriers between military and civilian research, and a clear commitment to becoming the global leader in critical technologies are vital characteristics of China’s S&T ecosystem.
It is a whole-system approach, which also focuses on building the requisite skill infrastructure, and recognises the capacity of GPTs to increase economic productivity, and thereby, military prowess, by the process of diffusion into pervasive use in a wide range of activities and sectors.
Take for instance, quantum computing and artificial intelligence (AI). India’s quantum research is largely exploratory. The amount of funds earmarked are a fraction of China’s investment, where quantum research is integral to military applications, secure communications, and economic competitiveness.
Similarly, although India’s National Strategy for AI was launched in 2018, we don’t see here the same centralized drive that can be seen in China’s approach, where the government not only funds AI projects but also mandates the integration of AI across sectors, from healthcare to defence.
Undergirding all of this in China is a vast science, technology, engineering, and mathematics (STEM) talent pipeline. China produces more engineers and scientists than any other country, which is then directed into priority sectors through government programs like the Thousand Talents Plan, which attracts foreign experts to work in China’s universities and R&D centres.
India, by contrast, faces a significant talent drain. The recent GIAN (Global Initiative of Academic Networks) and VAJRA (Visiting Advanced Joint Research Faculty) schemes are good in their intent, but unfortunately, are insufficient compared to China, in bringing global expertise into India’s research ecosystem.
One might be tempted to assume that such intense focus on high-tech R&D would overlook traditional energy sectors, but China’s advancements in nuclear energy tell a different story. With the recent prototype reactor, China not only aims to power aircraft carriers but also to expand its already burgeoning nuclear energy infrastructure.
India, by contrast, sees a sluggish pace of development due to various reasons, limited domestic capability in advanced nuclear technology being one of them. We can see similar disparities between India and China in other sectors like biotechnology, renewable energy, semiconductor technology, etc.
S&T Ecosystem
A critical factor behind China’s Science and Technology (S&T) ecosystem’s efficiency is its organizational structure. It is designed to be highly centralized, goal-oriented, and adaptive to strategic priorities. The Chinese Communist Party’s (CCP) direct involvement in setting and steering S&T goals ensures that national priorities are executed with minimal friction and maximum coordination. It is a top-down, focussed approach, led by key state and military bodies.
In contrast, India faces multiple challenges in achieving comparable speed and coherence due to the need to balance multiple stakeholders and navigate a more layered, confusing bureaucracy.
China’s S&T ecosystem is anchored by the Ministry of Science and Technology (MOST). It is responsible for developing national science and technology policies, setting R&D priorities, and overseeing the implementation of key initiatives. MOST operates in close collaboration with the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT), both of which align China’s S&T advancements with broader economic and industrial strategies.
The NDRC, for instance, integrates S&T objectives into China’s Five-Year Plans, closely tying innovation goals to national development objectives and centralizing policy-making and operational direction.
The Central Military Commission (CMC) plays a significant role in driving R&D in defence and dual-use technologies, particularly through the MCF strategy. MCF breaks down barriers between military and civilian research sectors, enabling a seamless exchange of technological advancements between the two. The MCF’s centralized, coordinated approach has effectively fast-tracked the deployment of cutting-edge technologies to the People’s Liberation Army (PLA) and placed China on the frontlines of strategic military advancements. India lacks such a coherent strategy.
China’s Academy of Military Sciences (the highest-level research institute of the PLA) and Chinese Academy of Sciences also contribute to the efficiency of its S&T ecosystem. The Chinese Academy of Sciences (CAS), which employs more than 60,000 scientists and researchers, is the world’s largest research institution and serves as the backbone of China’s basic and applied science initiatives.
Directly funded and managed by the government, it includes various strategic laboratories and research institutes across China. This helps streamline knowledge production and accelerates the commercialization of scientific breakthroughs.
The Academy of Military Science, meanwhile, is tasked with integrating advanced technologies into China’s defence capabilities.
Another vital component of China’s S&T organizational structure is its extensive network of national laboratories and high-tech zones, focusing on advanced fields such as semiconductors, biotechnology, and renewable energy, and often located near urban centres and research institutions.
They benefit from special policies, tax incentives, direct funding, and collaborations between academia, industry, and the government. This contrasts with India, where innovation clusters are more fragmented, and collaborations between academia and industry are less structured.
The centralized funding model of China’s S&T ecosystem also contributes to its efficiency. China’s government acts as both a financier and a strategic planner, allocating funds directly to priority projects through MOST, NDRC, and CAS. The government’s direct funding creates stability for long-term projects in areas like nuclear energy, AI, and space exploration.
Furthermore, China has established national funds to encourage private investment in strategic sectors. For example, the China Integrated Circuit Investment Industry Fund, commonly known as the “Big Fund,” raised over $50 billion to support the semiconductor industry.
India, in contrast, has a more fragmented funding model with limited direct government investment in strategic R&D, often leaving research institutions and companies to compete for scarce funding.
Ripple Effect of Technology Diffusion
All of this further reinforces the GPT diffusion theory, which says that one of the reasons that technological prowess translates into military and economic strength is the ability of a nation to increase the breadth of use, or pervasiveness, of GPTs across different sectors, and to sustain it over a relatively longer timeframe.
It then doesn’t matter whether a nation has a jumpstart or first mover advantage in emerging technology sectors. China demonstrates this through its centralized organizational structure and the MCF strategy.
India’s efforts remain relatively siloed and lack the pervasive integration seen in China’s approach. This inhibits the kind of broad technological diffusion that Ding’s theory identifies as crucial for economic and military power. Imagine technological innovation as a stone dropped in water: China has perfected the art of creating waves that ripple through every corner of its economy.
China ensures that breakthroughs in quantum computing, AI, or nuclear technology don’t just sit in research labs but cascade through military applications, industrial processes, and civilian uses with remarkable efficiency. When China develops a nuclear reactor for its warships, it’s not just about naval power – it’s about creating a technological ecosystem where innovations cross-pollinate across sectors with precision and purpose.
India needs to focus more on building an ecosystem that facilitates widespread adoption of GPTs across sectors. Technological innovations need to become pervasive force multipliers across the economy. This means dismantling the walls between research institutions, industry, and defence establishments, creating a unified flow of innovation similar to China’s model.
Additionally, India should address its talent retention issues and create stronger incentives for private sector participation in R&D, similar to China’s “Big Fund” for semiconductors.
Technological supremacy isn’t about who invents something first, but who can spread it fastest and most effectively throughout their economy.
Arindam Goswami is a Research Analyst in the High-Tech Geopolitics Programme at the Takshashila Institution
