China’s Dual-Use High-Tech Dependencies: A Weak Signal Poised to Reshape Global Strategic and Economic Landscapes

Emerging from the intersection of geopolitical tensions, technological innovation, and economic realignments is a subtle but significant signal: the deepening dual dependency between China’s high-tech exports and Western security commitments. This complex interdependence could evolve into a critical disruptive trend over the next decade, redefining supply chains, market dynamics, and geopolitical stability. Though not fully appreciated in mainstream strategic conversations, the risk and opportunity embedded in this dual dependency demands closer scrutiny across industries, governments, and research communities.

What’s Changing?

China’s rapid advancements in high-technology sectors—particularly artificial intelligence (AI), quantum computing, aerospace, and autonomous systems—have positioned it as a formidable global player. According to a detailed analysis of China’s trajectory through 2026, state-led initiatives such as the New Generation AI Development Plan coupled with the Made in China 2025 policy outline a clear ambition: to achieve global leadership in AI and other high-tech domains by 2030 (GInC, 2023).

The country is backing these ambitions with deep investments and innovation cycles, evident in milestones like the development of reusable space vehicles by China Aerospace Science and Technology Corporation (CASC) aiming for operational launches by 2025-2026 (The Diplomat, 2025). Parallel efforts in quantum research emphasize both the quantity and quality of output, positioning China on the frontier of computing breakthroughs (Riverlane, 2025).

However, this technological momentum unfolds against a backdrop of escalating geopolitical tension—particularly between China and the United States—as well as increased European recalibration of engagements with both blocks (Wellington, 2026; MERICS, 2026).

A critical weak signal emerging from these dynamics is the intertwining dependencies that both the West and China share. Many Western countries depend heavily on high-tech imports from China, including components essential for AI hardware, telecommunications, and electric vehicles. Conversely, China increasingly relies on security commitments and strategic technology inputs from the US and allied partners (Manila Times, 2026).

This embedded dual dependency thus forms a fragile equilibrium. Notably, protectionist policies, such as proposed or implemented tariffs (e.g., the effective 5% tax slowing China’s domestic growth), can rapidly alter this balance, turning previously strategic assets into liabilities for companies like Nio, whose autonomous driving research requires uninterrupted access to global supply chains and technology ecosystems (Chronicle Journal, 2026).

Recent trends signal a fragmentation of the once-integrated global technology supply chain. Rising national security prioritization, driven by fears of technology transfer, espionage, and potential weaponization of dependencies, could prompt states to rethink sourcing, R&D collaboration, and even market access frameworks. The increasing politicization of technology supply doubles as a catalyst for diversification strategies, emphasizing regional investment in sovereign technologies and supply insourcing.

Why Is This Important?

This weak signal should resonate beyond traditional geopolitics into economic, industrial, and scientific domains. For business leaders, the risks pertain to supply chain continuity, cost volatility, and innovation cycles. Tech companies dependent on Chinese inputs might face unexpected disruptions if geopolitical frictions escalate or if governments impose additional export controls or tariffs. Conversely, companies based in China could encounter shrinking access to Western markets and technologies critical to product development.

Government policymakers face strategic challenges. Prioritizing national security may justify more stringent controls, but the costs include increased market friction, innovation slowdowns, and potential stagnation in critical sectors if collaboration breaks down. Southeast Asia’s dilemma—caught between US security commitments and China’s economic gravitation—illustrates the geo-economic complexity and regional vulnerability to decoupling pressures (Manila Times, 2026).

At a scientific level, the trend might influence global leadership in emerging fields such as quantum computing and AI. Increased fragmentation could produce rival innovation ecosystems, potentially duplicating research but lowering overall efficiency and delaying joint breakthroughs. Quantum research already faces pressures to diversify away from China-centered supply chains and talent pools (Riverlane, 2025).

In sum, the coexistence of high interdependence alongside political competition is destabilizing. This contradiction could disrupt innovation, commerce, and diplomacy simultaneously—and possibly do so abruptly.

Implications

The unfolding dynamics suggest several strategic implications across sectors:

• Supply Chain Resilience: Companies must heighten efforts to map and understand the dual-sided dependencies in their supply chains—not only direct suppliers but also raw material and technology dependencies embedded multiple tiers deep. Diversification and investment in alternative sources, including domestic capabilities, will become prerequisites rather than aspirational goals.
• R&D Strategies: Organizations and governments might face incentives to localize or closely partner their R&D efforts to mitigate risks from geopolitical fragmentation. Increased funding to bootstrap parallel tech ecosystems, especially in AI and quantum computing, may rise.
• Geopolitical Risk Management: Risk frameworks should explicitly incorporate scenarios where dependencies become leverage points in crises, resulting in asset seizures, sanctions, or embargoes. Governments may need new mechanisms for dialogue and crisis mitigation to prevent escalation from supply dependencies into broader conflict.
• Market and Regulatory Navigation: Businesses should prepare for shifting regulatory landscapes, including export controls or tariffs applied rapidly and unpredictably. Strategic intelligence units monitoring policy changes and engaging in government affairs will be valuable assets.
• Collaborative Frameworks: Multilateral frameworks designed to preserve critical technology collaboration while addressing security concerns could emerge as necessary stabilizers. Stakeholders should track initiatives aimed at cooperation in establishing “trusted technology zones” or secure R&D networks aligned with geopolitical blocs.

Proactively addressing these implications could yield first-mover advantages, including early development of resilient technologies and supply chains, positioning for growth under new geopolitical constraints, and influencing policy design to balance security with openness.

Questions

• How might organizations comprehensively map their dependencies on Chinese high-tech imports beyond first-tier suppliers?
• What investment and partnership strategies could accelerate the creation of alternative technology ecosystems complementing or substituting China-centric supply chains?
• Which frameworks or platforms currently exist, or must be developed, to foster international cooperation on sensitive technology while managing sovereignty and security concerns?
• How can firms balance the tension between market access and geopolitical risk in long-term strategic planning for the 2030 tech landscape?
• What early warning indicators can governments and businesses establish to anticipate weaponization of supply dependencies and respond effectively?

Addressing these questions will be paramount in navigating a future where intertwined dependencies no longer guarantee stability, but rather pose novel risks and opportunities across industries and nations.

Keywords

China high-tech dependency; dual dependency; geopolitical technology risk; technology supply chains; quantum computing geopolitics; strategic technology collaboration; AI national security; supply chain resilience

Bibliography

• US-China great power competition, conflicts worldwide, and a fragmented global order characterize the structural geopolitical outlook for 2026.Prioritization of national security brings about investment opportunities to consider, including among AI and emerging technologies. Wellington, 2026.
• China is in 2026 expected to make progress in key fields of science and technology - especially artificial intelligence - while its relations with the United States continue to deteriorate and its leverage over Europe gains in strength. MERICS, 2026.
• The reliance on high-tech imports from China and security commitments from the US creates a dual dependency that could be weaponized in a future crisis. Manila Times, 2026.
• If the 5% tax in China leads to a sustained domestic slowdown, Nio's high R&D burn rate - currently focused on autonomous driving and its Full Stack technology - could become a liability rather than an asset. Chronicle Journal, 2026.
• While China continued to produce a high quality and quantity of quantum research, geopolitical tensions, such as Trump's tariffs, posed risks to global supply chains, prompting calls for diversification and increased R&D in quantum. Riverlane, 2025.
• China's AI strategy is built on achieving global leadership by 2030, driven by high-level political support, deep state-led investment, and foundational policies like the 2017 New Generation AI Development Plan and Made in China 2025. GInC, 2023.
• The China Aerospace Science and Technology Corporation (CASC) is developing two reusable vehicles: a four-meter rocket expected in 2025 and a five-meter vehicle targeted for 2026. The Diplomat, 2025.