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Chinese AV ambitions at risk amid trade war

EURASIA LIVE
9 July 2019
Baidu's Apollo autonomous vehicle during a public road test for self-driving vehicles in Beijing. REUTERS. Baidu's Apollo autonomous vehicle during a public road test for self-driving vehicles in Beijing. REUTERS.
China is betting big on autonomous vehicles (AV). Beijing sees the sector as a showcase for its strengths in the deployment of advanced technologies, including next-generation 5G networks, artificial intelligence (AI), and new energy technologies, and it is investing accordingly. The country has set a target of smart vehicles accounting for half of all auto sales in the country by 2020, with highly automated vehicles—capable of driving without driver intervention—accounting for 15% of sales by 2025.

While China has several advantages when it comes to building a robust AV ecosystem, including the world's biggest automobile market, policy ambitions have run ahead of the reality on the ground. Along with playing catch-up in road testing of AVs, China's AV sector faces substantial risks from the US campaign against Chinese network equipment giant Huawei. Without a successful resolution of the Huawei issue, the planned rollout of China's next-generation 5G network—and by extension its goals for its domestic AV sector—may be delayed or even derailed.

This special report details China's efforts to accelerate AV development. It describes how the escalating US-China tech cold war—including US actions against Huawei initiated in May 2019—threaten to disrupt its ambitions.
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