TL:DR*- YES, and its not probably not good.*
2025 is the Year of Quantum - a new technology set to change everything - and the likelihood is that China will have it working and scaling first.
Quantum Supremacy: The Next Technological Arms Race
Quantum supremacy is the point where a quantum computers can perform calculations that are impossible for even the most powerful classical supercomputers.
Think of it like this: if a regular computer is solving a maze by trying every possible path one by one, a quantum computer can explore all paths.
Although vastly simplified, this visual representation will give you a good understanding of what is at play.
Quantum Supremacy: The Next Technological Arms Race
This gives it a massive speed advantage for certain problems, such as cracking encryption, designing new drugs, or optimising logistics.
The nation state that unlocks Quantum advantage first, will be the first to enjoy its bounty of competitive advantage in international commerce, engineering, production, military, cybersecurity and financial markets.
Although we are at a very early stage, quantum computers are already able to solve certain types of problems that would take traditional computers septillions of years.
But it is still early days and the race is unequivocally on.
Why Are Nation-States Involved in a Quantum Arms Race?
Achieving quantum supremacy offers a nation significant economic and social benefits.
Economically, it enables advancements in sectors like pharmaceuticals, finance, and materials science - in fact any area that can be optimised, modelled or simulated with unprecedented speed and accuracy.
By harnessing quantum algorithms, industries can achieve breakthroughs currently unavailable with traditional methods that can disrupt global competitors to levels currently unimaginable .
If your nations companies industries can innovate faster, and create better, faster, safer, stronger products and services than your international competition, that equates to strategic competitive advantage.
It enhances national security through near-unbreakable encryption and positions the nation as a technological leader, attracting talent, fostering innovation and building political and military influence.
Technological leadership provides strategic benefits: stronger cybersecurity defences, advanced military capabilities, and the ability to shape international norms and standards.
The leader in Quantum technology will have an edge that safeguards their interests, supports prosperity, and projects influence on the global stage.
So who is leading the pack when it comes to Quantum Technology?
China’s Investment in Quantum Vs The USA and EU
3rd Place - EU - 2024 Quantum Investment
The EU is lagging in third place in terms of its quantum investments. It creates great technology but on a smaller scale, complicated by the 27 lines drawn between its nation-states economies, research and collaboration efforts.
The $97 million allocated to EuroQCI represents 8% of the total $1.2 billion invested in quantum technologies across the EU more is being allocated but its still outside of the tent trying to pee in.
United States - 2024 Quantum Investment
In 2024, the United States continued its significant investment in quantum technology. The U.S. government allocated $968 million to the National Quantum Initiative (NQI) for ongoing research and development in this field.
This funding supports various governmental agencies, including the Department of Defence, NASA, the National Security Agency, and the Department of Energy.
In addition to federal funding, private sector investments have surged, with venture capital contributions surpassing $2.4 billion in 2024
The USA also runs programs via DARPA and other agencies focused on developing quantum technology, but in contrast, the U.S. relies heavily on private sector contributions from companies like IBM, Microsoft and Google.
China - 2024 Quantum Investment
As of 2024, China has invested approximately $15 billion in public funding for quantum technology, significantly outpacing the United States’ investment of $1.9 billion.
Let’s be very clear, the Chinese are well known for wild over exaggerated fibs when it comes to the amount of investment they claim.
So take the numbers with a pinch of salt.
This substantial financial commitment underscores China’s strategic focus on advancing quantum computing, communications, and related technologies.
It is well accepted that China’s state-run investment program operates in secrecy, in that there is an allocated black budget.
The true extent of China’s commitment to investment in quantum technology is probably far in advance of published figures. (As is the USA’s)
Other Considerations - Who Is Likely To Achieve Quantum Supremacy?
If you believe recent statements by Elon Musk and the Trump administration, the USA is teetering on the edge of bankruptcy and is currently in the process of slashing its government and defence spending.
This means that black budgets are likely for the chop, or certainly a significant whittling down. While there have been huge investments in AI announced in the USA and Europe, China, whilst maintaining it’s healthy investment in AI, is focused on the next big thing, and the next big thing is quantum.
There are other considerations.
The Talent War
Projections indicate that by 2025, Chinese universities will produce over 77,000 STEM Ph.D. graduates annually, while U.S. institutions are expected to produce approximately 40,000.
For context, China is producing 92.5% more STEM Ph.D. graduates than the U.S., per year meaning the resources for STEM are nearly double that of the USA every single year.
And another consideration.
Cooling EU / US Collaboration
Whilst the USA and Europe have traditionally shared information collaboratively in both commercial and defence projects, there is a consensus of opinion that the volume and depth of such collaboration is likely to be significantly reduced.
Friedrich Merz, the new likely German chancellor said:
“My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA.”
That’s quite some departure from a believer in U.S.-European cooperation and passionate Atlanticist like Merz.
The Quantum Research Race
China has surpassed both the United States and Europe in the number of quantum technology research papers published annually.
While the U.S. maintains a wafer-thin (and it is indeed wafer-thin) lead in quantum computing research quality, China’s overall output in quantum technologies is notably higher, with China producing 38% of global publications in this field, while the United States contributes just 12.5%.
The Quantum Innovation Race
Unless you have been living under a rock for the past week, you would have seen significant PR activity around the new Microsoft Quantum chip.
Indeed, a big step forward, but it is also important to point out that until Microsoft flashes up its Quantum Computer and proves its Quantum pudding, that there may be more PR noise than technological substance to the current claims—indeed, the jury is out until Microsoft can prove their technology.
Read [ Is Microsofts 4th state of matter claim BS? ]
The Chinese Tianyan-504 Quantum Computer
In comparison, China has made significant strides in quantum computing with two groundbreaking developments:
- Integrated Photonic Quantum Chips
- The Tianyan-504 Superconducting Quantum Computer
Chinese scientists from Peking University and Shanxi University demonstrated the first continuous-variable multipartite entanglement and cluster states on an integrated photonic quantum chip. If that sounds like a mouthful it is, the important thing to note is that it is a significant competitor to both Google and Microsoft.
This wasn’t a well-positioned PR piece—it is working, demonstrable, and available for all to see. China has a history of falsifying Quantum claims - this is unlikely false.
This research, published in Nature, addresses a long-standing challenge in quantum computing: the scalable and deterministic generation of entangled quantum states.
🔗 Read the full paper in Nature
While Tianyan-504’s performance claims haven’t been independently verified outside of China, China’s investments in superconducting qubits suggest serious advancements in quantum error correction and stability.
The Race For The Quantum Cloud
The Tianyan-504 is accessible via China Telecom’s “Tianyan” quantum cloud, launched in 2023. This means:
- Businesses & researchers worldwide can run quantum algorithms on a Chinese-built quantum platform.
- It will be a serious competitor to IBM & Google’s cloud quantum services, in much the same way that DeepSeek and various Chinese models have completely upended US artificial intelligence platforms over the past months.
- It is likely to be much cheaper, and it may even be a better product.
Countries relying on Chinese quantum services could become dependent on its technological infrastructure, giving it all of the advantage it needs to dominate global influence.
If you think about the sway and leverage generated by being able to switch on and off Elon Musks Star-link Satellites, imagine what would happen if someone could flick the switch on the system that is underpinning your industrial base.
That is quite some leverage.
The reality it seems, at least currently is that China’s quantum technology is certainly sub-par compared to the US and EU platforms, but let us not forget their penchant for copying and replication. They shouldn’t be written off.
The Race for Practical Applications
Quantum Internet: The ability to entangle particles across vast distances could lead to ultra-secure communications, and China is certainly at parity when it comes to Quantum Secure communications technologies.
Huawei and its Chinese counterparts are fixing to lead Secure Quantum Communications.
Fault-Tolerant Quantum Computing: Photonic-based quantum computers may overcome some limitations of superconducting qubits, particularly with error correction. Meaning faster computing capability for the victor.
Commercial Use: Companies like Xanadu and PsiQuantum and others are already exploring photonic quantum chips for practical use cases in the West, but, in comparison, they suffer a lack of qualified talent to take up research positions and lacklustre commercial adoption from its national industries, whereas China simply doesn’t have that problem.
The Cybersecurity Race
Superconducting quantum computers like Tianyan-504 could accelerate the timeline for breaking classical encryption (RSA, ECC), necessitating a rapid transition to post-quantum cryptography—that is, if it has not been broken already.
There are some industry murmurings to this effect.
Read [A simple, non complicated, non technical overview of Post Quantum Cryptography]
China has been involved in a number of well-defined and understood “suspected” HDNL (Harvest Now, Decrypt Later) attacks, where internet traffic has been redirected through Chinese data cables, allegedly tapping into the internet traffic that transits state and commercial secrets.
China, of course, is well known to have one of the best, if not the very best, state intelligence services when it comes to “borrowing” classified research and state secrets.
Researchers in the West have even taken to not registering patents and IP for fear of their inventions being dissected in Beijing’s labs the moment patents are registered.
This is not an isolated case; in the past three months, I have spoken to three professors in European universities who have said exactly the same thing.
“Publishing and registering your IP is a fast track for Chinese copying, and the Chinese do not obey the rules”.
I think this is widely accepted, and acknowledged - whilst we enjoy rules and regulations that protect IP in the collective West, China doesn’t care about your IP status.
The Industrial Quantum Race
Large-scale qubit systems are expected to revolutionise AI, materials science, and manufacturing.
Clearly, if China can produce better materials, faster, cheaper, and more effectively, then they will continue to dominate in trade despite a declining Chinese population, at least in the medium term.
Not only will they be able to produce cheaper and faster, as they do now, its likely that they will also be able to produce “Better” and that is a significant worry for Western manufacturing.
The Quantum Financial Race
When it comes to the financial sector, this has broader, deeper, and more impactful considerations.
Quantum technology is already being used to gain a competitive advantage in high-frequency trading, credit, fraud, and indeed almost all facets of financial transactional systems.
Any number of financial organisations are rushing to deploy Quantum Machine learning before their competitors do.
Read [ AI is Cool but Quantum Machine Learning Is Just Bonkers - A non technical overview ]
Quantum computers are likely to break current encryption standards that secure banking transactions, stock exchanges, and international financial transfers.
If China reaches this milestone first, it could decrypt sensitive financial data while the West scrambles to implement quantum-resistant security.
Our banks in the West are trailing in their capability to resist such quantum attacks.
Over the past months, I have spoken to senior figures in global international banking organisations that have not even started their Quantum Safe projects. One bank has even stated that it will be impossible to update its cryptography in time.
One could simply and honestly state that the banking system is “open kimono” for financial attacks for the first nation-state to master quantum computation.
Read [Organisations Should Re-Evaluate Their “Quantum Safe” Position In Light Of Recent Announcements]
High-Frequency Trading (HFT) and Markets Domination
Quantum algorithms will outperform classical AI in financial modelling, predicting market trends, price fluctuations, and optimal trades at speeds beyond anything seen today.
With quantum-enhanced high-frequency trading, China’s firms could execute trades milliseconds ahead of competitors, manipulating stock prices and commodities markets—forcing the collective West into poverty should it so choose, at the touch of a button.
Over dramatised? Potentially, but probably not considering a 4-6 year horizon.
At scale the offensive capability of the technology to manipulate financial markets is very real and current.
We all know that warfare today is commercial and economic, and is happening all the time, every second of every day.
If China wins the quantum race, as is likely, they will be fielding the equivalent of financial heat-seeking missiles, whilst the West fights back with its muskets, based on lagging technology.
Quantum computing will allow for the simulation of complex economic systems with extreme accuracy, predicting market crashes or weaknesses in Western economies before they happen.
If used strategically, China could short-sell assets, disrupt financial stability, or create artificial booms and busts.
If this seems far-fetched, consider that some of the biggest spenders on early-stage quantum technologies are the trading firms that are looking to secure a couple of milliseconds of latency advantage over the competition.
It stands to reason, if China has superior quantum computation available at a fraction of the cost, state-supported to the point of being near free, then who is likely to be the victor?
If China can produce better, faster, and more effective quantum computational systems than the West—better quantum machine learning software, new quantum algorithms (you may add your specific technology ad nauseam)—then they will not only be able to dominate but also manipulate financial markets to the collective West’s detriment, if so desired.
National Security
Quantum computing plays a strategic role in cybersecurity, defence, and economic forecasting, and while some of the scenarios painted above are still unfolding, I think I have adequately highlighted that fact that China is at least at a position of Quantum Parity with the West, if not just slightly ahead.
The West, although putting up a fair fight, has all of the controls, restrictions, and limitations that China does not have. China has available talent, legal carte blanche to copy patents, organisational superiority, and consistency in approach.
China’s quantum revolution isn’t just about national pride—it’s a serious technological shift with far-reaching economic, cybersecurity, and scientific implications, and they are ahead in this multi-dimensional game.
While China has its own economic woes on the horizon, it is important to note that they are simply not playing the same game when it comes to their Quantum investments.
Read [ Americans Play Cards, The Russians Play Chess, while China Plays Go ]
Takeaways: China’s Quantum Strategy & Global Implications
- China is rapidly advancing both photonic and superconducting quantum computing.
- Integrated photonic chips could enable scalable, fault-tolerant quantum networks.
- Tianyan-504’s 504-qubit chip challenges IBM and Google, pushing the arms race in quantum computing.
- Quantum Cloud Accessibility suggests China wants a dominant role in global quantum infrastructure.
- Security concerns: If China achieves large-scale quantum error correction, global cryptographic systems may need immediate upgrades, for which there are unlikely to be budgets allocated especially in Government and Defence.
- The West faces significant limitations in its approach, capability, talent pool, and collaboration in being able to win the quantum race.
In Summary
It’s never good to be on the loosing side.
As a proud European I think that it is impossible for Europe to compete on a level footing, and perhaps that’s ok as long as we are not dependent on China or the USA.
That really sets the race for dominance between China and the USA, and I think we all know that this opens up a wider discussion, communism vs the new unfolding version of capitalism.
I wouldn’t want to live under the Chinese system, increasingly I am thinking I wouldn’t like to live under the US system, but time will tell.
Who will win?
At this moment, on a balanced scorecard, the US may be leaning on its current technological advantage but its industrial base is evaporating quickly, the US is cutting back to take a defensive stance, focusing on its geographical position rather than its technological one.
- Hannibal used the technology of elephants to cross the alps,
- The British used its naval technology to master the seas
- The USA has used its airforce technology to dominate the skies
It is likely that the next battle will be led with AI and Quantum and China is likely to be the victor.
Sources & Technical Papers:
- Nature (2025): Deterministic Generation of Continuous-Variable Quantum Cluster States on an Integrated Photonic Chip
- Chinese Academy of Sciences (2025): Superconducting Qubit Stability and Readout Fidelity in Large-Scale Quantum Systems
- IBM Research Blog: Roadmap for Quantum Advantage
