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Executive Summary:

• A decade of increasingly specific policy direction in the People’s Republic of China (PRC)—Five-Year plans, Ministry of Industry and Information Technology (MIIT) technical mandates—has shifted focus from basic science to engineering targets and deployment, effectively guiding both industry pathways and investor behavior. 
• The sector is supported by a multi-tiered, state-aligned capital architecture that provides large-scale, patient funding, reducing commercial pressure and enabling quantum firms to prioritize deployment over short-term profitability. 
• The PRC has already translated research into operational infrastructure, exemplified by the Beijing–Shanghai quantum network and Micius satellite, demonstrating end-to-end quantum communication capabilities at national scale. 
• Despite strong central coordination, provincial competition introduces fragmentation and inefficiencies, creating parallel ecosystems that may dilute resources but also drive innovation pressure.

On April 3, Shenzhen-based SpinQ Technology (量旋科技) announced the completion of the largest single quantum computing financing event in country’s history (Xinhua, April 3). The investors included state-backed funds and municipal government vehicles alongside technology-focused private equity firms. SpinQ’s success is a signal of growing momentum in the quantum ecosystem in the People’s Republic of China (PRC). This is helped by a prevailing view that treats quantum hardware as infrastructure as, in the PRC, infrastructure gets built whether or not adequate market demand for it exists.

The Chinese Communist Party (CCP) aims to convert scientific achievements into operational capabilities, commercial deployments, and, eventually, military advantages. The result is a self-reinforcing system in which policy signals attract capital that funds development, which in turn demonstrates viability, which then justifies further policy. The PRC’s industrial policy, financial sector, and government applications together illustrate how the CCP has translated laboratory science into operational national infrastructure.

Central Policy Cultivates Provincial Efforts

The 2026 Government Work Report, which Premier Li Qiang (李强) unveiled on March 5, named quantum technology among seven “future industries” (未来产业), second only to the energy sector (Xinhua, March 5). Eight days later, the outline of the 15th Five-Year Plan similarly highlighted quantum technologies—including computing, communication, and sensing—as the second of eight “key frontier technologies to tackle” (前沿科技攻关) for the first time (Xinhua, March 13). Quantum communication and computing were referenced in the 13th Five-Year Plan (NDRC, March 2016). They received more coverage in the 14th, however, which described “quantum information” (量子信息) as a frontier technology requiring state support (State Council, March 13, 2021). Hefei has emerged as a national hub since then, home to nearly one-third of the PRC’s quantum technology companies (Xinhua, April 28, 2025). This came five months after CCP General Secretary Xi Jinping had presided over a Politburo collective study session at which he declared quantum a “high ground of international strategic competition” (国际竞争制高点), elevating quantum to the frontline of geopolitical competition (Xinhua, October 17, 2020).

Around 2024, state guidelines for implementation became more specific. In January that year, the Ministry of Industry and Information Technology (MIIT) and six co-signing ministries issued the “Implementation Opinion on Promoting the Innovative Development of Future Industries” (关于推动未来产业创新发展的实施意见), the first document to outline technical milestones. This opinion designated superconducting, photonic, and trapped-ion quantum computers as officially approved hardware pathways, effectively signaling to capital markets which companies to fund (MIIT, January 2024). The following year, MIIT launched an “Unveiling-the-List” (揭榜挂帅) open call, incentivizing the development of a measurement-and-control system capable of managing at least 1,000 quantum bits with response times under one microsecond, a key engineering requirement for scaling quantum computers beyond laboratory prototypes by 2026 (MIIT, January 2025). As of 2026, policy documents have begun to flesh out their broad proposals with significant detail, often calling for the procurement of hardware with clear specifications.

Provincial governments are competing for breakthroughs, with at least 12 having developed dedicated quantum plans. The most consequential quantum cluster, however, is Anhui’s Hefei ecosystem, which is now the world’s most concentrated quantum research environment. Its success is likely due in part to the bottom-up nature of its development: physicist Pan Jianwei (潘建伟) and the University of Science and Technology of China (USTC) spearheaded the initiative well before Beijing formally endorsed it.

Table 1: Comparison of Quantum Technology Policies Across Provinces (2024–2025)

Source: Compiled by author based on provincial government official websites; Securities Times, November 20, 2025; Beijing Daily, December 14, 2025).

Beijing has since sought to stimulate further competition in the sector. In December 2025, its municipal government announced a “Quantum Bay” (量子湾) district alongside an RMB 500 million ($73 million) open-source quantum fund—a direct challenge to Anhui’s dominance (Beijing Daily, December 13, 2025). Wuhan launched its “Quantum S&T 12 Articles” (量子科技十二条), offering up to RMB 10 million ($1.5 million) per qualifying project (Weixin/Hubei Association of Science and Technology Entrepreneurs, June 18, 2024). Anhui has continued to cultivate its local industry, however, launching a “Thousands of Scenarios” (千景) program targeting 1,000 quantum application deployments by 2027 and 3,000 by 2030 (Securities Times, November 10, 2025; MOST, December 5, 2025).

These government-led programs allow quantum startups to develop before their technologies are commercially viable and before a demand base for them exists. Because the state has decided that these technologies are strategic and thus a priority to develop, the financing environment is structured accordingly and technical procurement requirements create guaranteed early-stage demand. This lowers the commercial risk threshold for private capital and accelerates deployment cycles.

This inter-provincial competition introduces inefficiencies that complicates the narrative of central coordination. The national market currently is too small to sustain 12 parallel clusters of hardware companies, labs, and talent pipelines. Lack of coordination has also led to the emergence of standardization gaps across provincial platforms, and may lead to the kinds of duplicative investment and fragmentation seen in other sectors such as electric vehicles and humanoid robotics. Balancing analysis of coordination and friction is essential to assessing what the PRC’s quantum build-out will deliver.

(Source: Compiled by author based on Nature, December 9, 2024; Physical Review Letters, March 3, 2025)

Capital Feeds Growth

A key development in the PRC’s quantum sector over the past year has been a substantial capital infusion, both protected and incentivized by industrial policy. According to existing estimates, the PRC’s quantum sector attracted RMB 11.2 billion ($1.6 billion) in cumulative financing through mid-March 2026, with RMB 2.2 billion ($322 million) flowing in the first quarter of 2026 alone (36Kr, March 17; China Venture, April 3; Quantum Insider, April 7). The sector supported 153 companies in 2025, up from 93 in 2023 (Toutiao, October 31, 2025).

State funding for the sector occurs at three levels. At the top, the National Venture Guidance Fund (国家创业投资引导基金), formally launched in December 2025, targets RMB 1 trillion ($146 billion) in mobilized capital across strategic emerging industries, including quantum (Science and Technology Daily, December 26, 2025). This fund co-invests with lower-tier funds and signals to all downstream investors which sectors carry state endorsement. Below it, the Central SOEs Strategic Emerging Industries Development Fund launched its first RMB 51 billion ($7.5 billion) tranche in October 2025, directing central SOEs to invest in quantum (Securities Times, October 29, 2025). This fund is primarily invested by China Reform Holdings Corporation, which was initially set up by the State-Owned Assets Supervision and Administration Commission (SASAC).

Another key player is China Telecom (中国电信) which stood up the first central SOE quantum-specific company back in 2020. In 2023, China Telecom invested RMB 3 billion ($423 million) to establish China Telecom Quantum Group. The group has currently participated in the development of more than 30 domestic and international quantum standards and has granted 120 invention patents, signaling that quantum had graduated from science project category to dedicated asset class (Sina Finance, November 4, 2025).

(Source: Compiled by author based on Xinhua, March 31; 36kr, April 3; Shanghai Stock Exchange, April 30)

(Source: Compiled by author)

Firm-level transactions in early 2026 illustrate the political signal working as designed. In March, QBoson (玻色量子) closed an RMB 1 billion ($147 million) Series-B funding round led by Beijing Financial Holdings (北京金控) and ICBC Capital (工银资本) (Beijing Daily, March 31). These entities, a municipal government investment vehicle and a state-owned bank, respectively, measure returns as strategic outcomes, not necessarily quarterly earnings. QBoson is “private in form, state-catalyzed in substance.” At the 2026 Zhongguancun Forum, a key international forum focused on technological development, QBoson unveiled “Yuliang Shanhai 1000” (驭量·山海1000), a specialized quantum computer with an AI-driven control system designed to monitor and automatically calibrate quantum preparation and measurement processes in real time. The system can operate stably for 16 hours a day, seven days a week—indicating a further step from laboratory prototypes toward deployable, application-oriented systems (Xinhua, March 30; NSCTI, April 3).

The steady maturation of the sector is evident in a growing pipeline of quantum firms going public over the last few years. The only firm to do so successfully so far is QuantumCTek (国盾量子), a USTC spin-out that has built much of the PRC’s physical quantum communications infrastructure, which listed on Shanghai’s STAR Market in 2020. CIQTEK (国仪量子), a quantum sensing and imaging company, had its STAR Market IPO application accepted in December 2025, seeking to raise RMB 1.17 billion ($172 million) (China Securities Journal, December 2025). Origin Quantum (本源量子), the country’s leading superconducting hardware company, entered IPO counseling in September 2025 at an estimated valuation of approximately RMB 6.9 billion ($1 billion) (Cailian Press, September 16, 2025). These capital infusions, enabled by a market that treats quantum hardware companies as credible long-term investments, will fund further infrastructure build-out.

(Source: Compiled by author)

Infrastructure Covers Land and Sky

The PRC has been building quantum communications infrastructure for over a decade. During Xi’s first year in charge, the Beijing–Shanghai quantum communication network was launched, well before any demand for secure quantum communications emerged in the PRC. It was completed during Xi’s first term, financed primarily by the National Development and Reform Commission, the Ministry of Science and Technology, and the Chinese Academy of Sciences. Spanning more than 1,200 miles and transiting Jinan and Hefei, it provides a theoretically eavesdrop-proof communications channel across 32 relay nodes and 135 quantum key distribution links. The network was inaugurated on September 29, 2017, when Pan Jianwei’s team conducted the first intercontinental quantum-encrypted video call, connecting Beijing and Vienna simultaneously via the backbone and the Micius satellite (Xinhua, September 4, 2017).

The Beijing–Shanghai backbone forms the core of a broader quantum-communications network in the PRC. Some regional links were developed before or alongside its formal inauguration, including a Shanghai–Hangzhou extension, a Wuhan–Hefei addition, and continued city-by-city integration (Sina, March 11, 2017; QuantumCTek, November 14, 2018). By the end of 2024, the China Quantum Communication Network (CN-QCN) comprised 145 nodes and over 6,000 miles of cables connecting more than 800 user terminals across 20 cities (Chen et al., 2025). [1]

A satellite layer has emerged in parallel. The world’s first quantum satellite, Micius (墨子号) (also known as Mozi), was launched in 2016 as part of the Quantum Experiments at Space Scale (QUESS; 量子科学实验卫星) program run by the Chinese Academy of Sciences (Xinhua, August 16, 2016). In June 2017, Pan Jianwei’s team used the satellite for the first demonstration of quantum entanglement distribution over 740 miles—a distance that exceeds the range of any optical fiber link, which they published on in the journal Science (Yin et al., 2017). [2] Around the same time, another team that included Pan published the results of a separate satellite-to-ground quantum key distribution experiment using the same satellite, establishing that a hybrid fiber–satellite quantum network was technically feasible (Liao et al., 2017). [3] These results transformed Micius from an experimental platform into a proof of concept for a global quantum communication system.

In the years since, the PRC has scaled this proof of concept internationally. In March 2025, Shandong province launched the Jinan-1 satellite, which set a new record for quantum communication, linking Beijing with Stellenbosch, South Africa—a distance of over 8,000 miles (People’s Daily Shandong, March 21, 2025). Jinan-1, which is much more compact than Micius and operates at a fraction of a full-scale satellite’s cost, demonstrates rapid progress over the last decade.

The current technology is impressive but carries a vulnerability. At each trusted relay node, the quantum key is decrypted and re-encrypted, creating potential points of compromise. The next-generation solution is device-independent quantum key distribution, which provides security guarantees that hold even if the hardware at either end has been tampered with. Earlier in 2026, Xinhua reported that Pan Jianwei’s team had achieved this with over 60 miles of optical fiber—the longest distance yet demonstrated for this protocol—closing a critical gap between the current backbone architecture and its eventual successor (Xinhua, February 6).

Conclusion

A decade of policy support for quantum technologies has produced considerable results. Governments at various levels are clear about what they seek to achieve, inscribing requirements into five-year plans, procurement competition announcements, and hardware pathway designations. This specificity has no equivalent in Western policy.

The PRC built its ground-based quantum backbone at a time when it had no commercial justification. Since then, it has built a satellite layer and exported the technology overseas. Beyond that, in January, the Information Support Force—a branch of the People’s Liberation Army—announced it was developing “more than ten types of experimental equipment” (十余型试验装备) to integrate quantum technology and supercomputing for battlefield applications (Science and Technology Daily, January 9; Global Times, January 15). The question for Western policymakers is whether the PRC will have the infrastructure in place for future advances before they reach the next benchmark.

Notes

[1] Chen, Hao-Ze, Li, Ming-Han, Wang, Yu Zhou et al., “Implementation of Carrier-Grade Quantum Communication Networks Over 10000 km,” npj Quantum Information, 11, no. 137 (2025), https://doi.org/10.1038/s41534-025-01089-8.

[2] Juan Yin et al., “Satellite-Based Entanglement Distribution Over 1200 Kilometers,” Science, 356 (2017): 1140–1144. https://www.science.org/doi/10.1126/science.aan3211.

[3] Liao, Sheng-Lai, Cai, Wen-Qi, Liu Wei-Yue et al., “Satellite-to-Ground Quantum Key Distribution,” Nature 549 (2017): 43–47, https://doi.org/10.1038/nature23655.

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