The world enters the “Year of Quantum Technology”: Understanding the US-China Tech Rivalry

As the world enters 2025, it also enters the “World Year of Quantum Technology” announced by the United Nations General Assembly in June last year. Since Max Planck proposed the concept of “quantum” 124 years ago, quantum technology was once just a cool concept in science fiction novels, but in 2024, the real application of quantum technology has achieved a series of unexpected developments.

Quantum technology, which Chinese leader Xi Jinping calls “disruptive technological innovation,” not only affects the global economy, technology, and security but is also an important factor in determining the future international influence. Competition between the United States and China in this field is particularly fierce, and some observers call it the “quantum race” in the new Cold War era. This article briefly introduces quantum technology and sorts out the situation of the “quantum race” between the United States and China.

The United States and China attach great importance to quantum technology

On January 2, 2025, a new rule on quantum technology from the U.S. Treasury Department will take effect, prohibiting U.S. individuals and companies from investing in and developing a range of advanced technologies in China, including quantum technology. This was finalized by the Treasury Department on October 28, 2024.

The United States passed the National Quantum Initiative Act in 2018 to accelerate the development of quantum technology in the United States. In December 2024, the U.S. Senate revised and issued the National Quantum Initiative Reauthorization Act to increase support for the development of quantum technology in the United States.

In May 2023, the Biden administration of the United States released the “National Standardization Strategy for Important and Emerging Technologies”, positioning quantum technology as a strategic area.

On December 9, Google announced that its quantum chip, called Willow, completed a calculation in less than 5 minutes. The crazy thing about this calculation is that the most advanced supercomputer in the world today would take 10,000,000,000,000,000,000,000,000 years (10 to the 25th power) to complete this calculation.

Quantum technology has also received attention from the Chinese government. Through policy documents such as the 14th Five-Year Plan, the Chinese government has listed quantum technology as one of the country’s priority development areas and injected government funding far exceeding that of European and American countries.

As early as October 2020, the Political Bureau of the CPC Central Committee held a collective study on the theme of “Quantum Technology Research and Application Prospects”. Xi Jinping, who presided over the meeting, emphasized that “we must fully recognize the importance and urgency of promoting the development of quantum technology, strengthen the strategic planning and systematic layout of quantum technology development, grasp the general trend, and take the initiative.”

In 2021, the Chinese government included quantum technology in the seven “frontier scientific and technological research” areas in its “14th Five-Year Plan”.

According to a 2022 McKinsey report, China leads the world in public funding for quantum technology, at $15.3 billion – eight times the investment of the US government ($1.9 billion) and twice the total investment of EU member states ($7.2 billion).

On October 11, the Hong Kong-based South China Morning Post reported that a Chinese research team used a quantum computer developed by Canadian company D-Wave to successfully crack the RSA encryption algorithm currently widely used in the commercial field. It was even able to crack the AES encryption (“Advanced Encryption Standard”), which is considered to be “military-grade”, sparking widespread attention and controversy in the international quantum community.

On December 7, China Telecom Quantum Group released the superconducting quantum computer “Tianyan 504”, equipped with the “Xiaohong” chip with 504 quantum bits produced by China University of Science and Technology Guodun Quantum, becoming China’s single quantum computer with the largest number of bits. It will be connected to the “Tianyan” quantum computing cloud platform and provide external services, “which will achieve a dual upgrade in computing power scale and computing power type,” Xinhua News Agency reported.

“Both the United States and China have elevated quantum technology to an arena in global technological competition, akin to the Cold War scramble for nuclear capabilities,” the Mercator Institute for China Studies, a German think tank, wrote in a report.

“Although the end product will be a computer rather than a bomb, the first party to develop quantum computing technology will have a significant advantage in military fields such as cryptography, communications, and information processing.”

What is quantum technology?

Quantum technology is based on the three core principles of quantum mechanics:

• Quantum superposition: The bits of traditional computers can only represent the states of 0 or 1, while quantum bits (qubits) can be in a superposition state of “0” and “1”, allowing them to exist in more than two states, which increases computing power exponentially.
• Quantum entanglement: Two or more particles can be linked to each other through “entanglement”, and changes in one particle will instantly affect the other particle no matter how far apart they are. This property provides a theoretical basis for quantum communication.
• Quantum tunneling: This phenomenon allows particles to travel through potential barriers that are insurmountable in classical physics. It is used in quantum sensors to achieve extremely high-precision measurements.

Quantum technology focuses on three main areas:

• Quantum computing: Using quantum bits to perform complex calculations, such as simulating molecular behavior to accelerate new drug development and solve complex problems in artificial intelligence.
• Quantum communication: Quantum key distribution (QKD) enables highly secure communications without the threat of eavesdropping.
• Quantum sensing: Extremely high-precision measurement technology used in earthquake monitoring, medical imaging, military reconnaissance, etc.

Why is quantum technology important?

Quantum technology is seen as the core of future technological competition. The country that achieves “quantum hegemony” will have an overwhelming advantage in computing power, information security, and military superiority.

• National security needs: The untappable nature of quantum communications provides unprecedented communication security for governments, military, and financial institutions. At the same time, quantum computers may crack existing encryption algorithms in the future, forcing the world to develop quantum-resistant encryption technology to cope with possible “Q-Day” – the moment when quantum computing cracks traditional encryption.
• Disruptive impact in the military field: Quantum radar can detect targets such as stealth fighters; quantum navigation can provide precise positioning without satellites and enhance the reliability of navigation systems, which is particularly critical in submarines, underwater drones, and other complex environments.
• Huge economic potential: Quantum technology is expected to solve many complex problems that cannot be solved at present, such as optimizing logistics networks, accelerating drug development, and improving financial risk management. According to McKinsey’s forecast, by 2035, the market value of quantum technology in the fields of medicine, finance, chemistry, etc. will exceed US$700 billion, among which the financial and pharmaceutical industries will benefit the most.

The current state of competition between the U.S. and China in quantum technology

Many Western think tanks, including the Washington think tank Information Technology and Innovation Foundation (ITIF), have agreed that

• In the field of quantum communications, China leads the world;
• China lags behind the United States in quantum computing;
• In quantum sensing, the U.S. and China are on par with each other;
• China has performed well in commercialized quantum technologies, but the United States still dominates in high-impact quantum technologies.

The ITIF report quoted an expert as saying that the differences in the respective advantages of the United States and China in the field of quantum technology reflect that the two countries have adopted very different national strategies to deal with the challenges in the field of quantum technology. The United States focuses on the long-term potential of quantum computing. Although such technologies are not yet mature, they have broad application prospects and can cover multiple industries. China focuses on the immediacy and security applications of quantum communications, which is a more mature technology but has a narrower market scope.

The South China Morning Post reported in 2017 that China had begun building the “world’s largest quantum laboratory” in Hefei, the capital of Anhui Province, where USTC is located. At the time, some Western media compared it to the Los Alamos National Laboratory in the United States, where the world’s first atomic bomb and hydrogen bomb were born.

Anhui Province launched the first phase of the Quantum Science Development Fund with a scale of 10 billion yuan in 2017. On July 11, 2017, China’s Quantum Innovation Institute was officially unveiled here, and Pan Jianwei, known as China’s “Father of Quantum”, served as the dean. He led the development of the “Mozi” quantum science experimental satellite and the quantum secure communication “Beijing-Shanghai Trunk Line”.

Benyuan Quantum, known as China’s first quantum computing unicorn, is also here. In January 2024, the company’s third-generation China’s independent superconducting quantum computer “Benyuan Wukong” was put into operation. The “Wukong Core” equipped with the machine has a total of 198 quantum bits.

“Build China’s own quantum computer,” the overseas edition of the People’s Daily reported extensively on this. Guo Guoping, co-founder and chief scientist of Origin Quantum, told the newspaper: “We must not be controlled by others in key core technologies. We must have China’s own and controllable quantum computers.”

On December 31, the British magazine The Economist published an article titled “China is gradually catching up with the United States in the field of quantum technology”, which began with a close-up of Benyuan Quantum and its “Benyuan Wukong” quantum computer.

“It is not clear whether the exhibits in the exhibition hall are for sale, but the equipment is obviously not supposed to be seen by foreigners. During the reporter’s visit (which was agreed in advance), the company was extremely panicked when it saw foreigners, abruptly canceled the interview arrangement, and notified the police,” The Economist reported. “Except for weapons manufacturing, few industries are as sensitive as quantum technology.”

The military of countries around the world are also showing great interest in quantum technology. “This is one of the reasons why China strictly protects its quantum industry,” wrote The Economist.

Little is known about how its component supply chain works, and the Chinese government has also imposed restrictions on the export of certain related technologies. Similarly, the United States has taken protective measures against its quantum technology. In October, the U.S. Treasury Department imposed strict restrictions on U.S. investment in China’s quantum industry.

Quantum communication: China leads the world

• Quantum Satellite: In 2016, China launched the world’s first quantum science experimental satellite “Micius”, which successfully achieved high-speed quantum key distribution from the satellite to the ground station. In 2022, China launched the second quantum satellite “Jinan-1”, with significantly improved performance. The third quantum satellite is scheduled to be launched in 2026.
• Beijing-Shanghai Trunk Line: In 2017, China built the Beijing-Shanghai Trunk Line for quantum secure communications, with a total length of over 2,000 kilometers. “It is currently the world’s longest-distance quantum secure key distribution trunk line based on a trusted relay scheme,” according to Chinese official media.
• International cooperation: China and Russia tested quantum satellite links in 2023, with the potential to be expanded to other BRICS countries.
• Patent advantage: According to Nikkei Chinese, as of August 2024, China has 5,544 public patents in the field of quantum encryption communications, far exceeding the United States’ 806. “Since public patents also lead to technology disclosure, there is also a trend in Europe and the United States to deliberately not apply for patents,” Nikkei Chinese pointed out.

Quantum computing: The United States has a clear advantage

In quantum computing, the United States is far ahead of China in both hardware development and algorithm complexity.

• The quantum computers developed by American companies (such as Google, IBM, and IonQ) have significantly more qubits than China. The number of qubits is an important criterion for measuring the performance of quantum computers. Compared with China’s current record of 504 qubits, quantum computers developed by American companies have thousands of qubits.
• The “Willow” quantum chip launched by Google in December 2024 has achieved an error correction function, which is called an important step towards the practical application of quantum computing. The United States has performed well in the fields of error correction algorithms, quantum gate design, and superconducting quantum computing.
• In 2022, IBM of the United States developed the Osprey chip, a 433-qubit quantum computing chip, and plans to launch a quantum computer with more than 4,000 qubits in 2025.
• American companies have more advanced hardware design capabilities, such as technologies based on superconducting materials and ion traps, which are superior to China in terms of quantum bit stability and error rate reduction.
• The two most famous quantum algorithms – Shor’s algorithm for factoring large numbers and Grover’s algorithm for faster cracking of encrypted messages – were both developed by U.S. researchers. U.S. companies and those in allied countries are leading in the practical application of quantum algorithms.

The Economist article points out that China may be narrowing the gap.

On December 17, 2024, the 105-qubit “Zu Chongzhi-3” quantum computer developed by Pan Jianwei’s team at the University of Science and Technology of China went online. Chinese officials said that “Zu Chongzhi-3” surpassed Google’s 72-qubit “Planeta” processor published in the journal Nature in October 2024 by six orders of magnitude, “and is currently the strongest superiority of superconducting quantum computing.”

Although China still relies on Western suppliers for many of the key components needed to run quantum computers, such as specialized lasers, the reliance is decreasing. “As Chinese companies continue to improve their capabilities in manufacturing these necessary equipment, Western suppliers are expected to see a gradual reduction in sales to China,” Boston Consulting Group said.

One example is China’s indigenously developed dilution refrigerator, a device used to generate the ultra-low temperatures needed to run quantum computers. During 2024, several Chinese companies and laboratories announced breakthroughs in this area.

• In June 2024, Chinese state media reported that the SL1000 dilution refrigerator developed by Origin Quantum “caught up with the first echelon of international dilution refrigeration, and achieved a transition from following to running side by side.” In September of the same year, the 400 series dilution refrigerator developed by Hefei Zhileng Cryogenic Technology Co., Ltd. “achieved continuous operation at a minimum temperature of 7.45 millikelvin for more than 100 days in actual use in a certain laboratory, setting a record for the longest operation at the lowest temperature in China,” Chinese state media said.

The Economist pointed out that due to the high confidentiality of China’s quantum industry, it is difficult for the outside world to verify the actual performance of China-made dilution refrigerators and whether they are really sufficient to support the operation of quantum computers. “But if these claims are true, it will mark an important milestone,” the magazine said.

Dilution refrigerators are core equipment in the quantum supply chain. For many years, Finnish company BlueFors and British Oxford Instruments have been the main suppliers of refrigerators used in quantum computers around the world. In September 2024, the United States introduced export controls on China’s quantum computing field, including high-performance cooling systems and other equipment, components, materials, and software required for quantum computers, and called on allies to follow suit.

Quantum sensing: a close match

Quantum sensing focuses on the precise detection of weak signals, such as changes in magnetic fields and gravity. The potential applications in this field are wide-ranging, including medical imaging, geological exploration, military radar, and military navigation. Several Western think tanks have concluded that the United States and China are close in technological strength in quantum sensing, and the competition is in a stalemate. “Leadership in this field is critical for short-term applications,” ITIF pointed out. Some of the technologies in quantum sensing have reached a highly mature level and are gradually entering various industries for application, providing higher sensitivity and new capabilities that traditional sensors cannot match.

In healthcare, these technologies are enabling more accurate heart monitoring and advanced brain-computer interfaces. A research team at MIT and Harvard University has used quantum sensing technology to improve MRI imaging accuracy, which can be used for early cancer detection.

In terms of military applications, Chinese military research institutions claim to have developed quantum sensors that can detect submarines and other hidden threats. Chinese officials also claim that their quantum radar technology significantly improves the ability to detect stealth aircraft. The US military is also developing high-precision quantum gravity sensors for detecting nuclear submarines and underground structures such as tunnels. The US Naval Research Laboratory is exploring quantum compass technology to provide highly accurate navigation capabilities in the absence of GPS signals. China’s Beidou navigation system is also using quantum sensing technology to improve positioning and navigation accuracy.

In addition, the China Earthquake Administration has begun testing earthquake monitoring equipment based on quantum sensing. The United States is developing quantum sensors for oil and gas exploration to more efficiently detect underground resources and reduce mining costs, etc.

Comparison of innovation models

China’s state-led model and the United States’ market-driven model for developing quantum technology are very different.

• The United States relies on large technology companies, venture capital, start-ups, and university research-driven, with private enterprises dominating R&D and government support being relatively limited. The total amount of private equity funding received by quantum technology start-ups in the United States is more than 10 times that of China. This model encourages competition and diversified development but also has problems with dispersed funds and insufficient coordination.
• China relies more on state-led efforts. Most research is conducted by state-owned universities and national laboratories, and there is a close connection between companies and policymakers. The National Natural Science Foundation of China has funded nearly half of the papers in the quantum field, and quantum start-ups such as Benyuan Quantum are also directly or indirectly supported by the government. This top-down model has advantages in resource integration and supply chain construction, but it may also limit innovation due to a lack of competition.