China faces growing geopolitical and socio-economic challenges and rising technology intensity of the Chinese economy is seen as a rational response to it. The PRC is focusing on priority areas: microelectronics, emerging digital technologies, electric vehicles, etc. These measures increasingly correlate with other policies: supporting GDP growth (rise of output, employment, exports and domestic demand for high-tech); reducing critical vulnerabilities of the national high-tech sector from imports and sanctions; laying the basis for accelerated growth. However, this has only limited potential for the innovative transformation of the Chinese economy. New approaches to the technological development are needed, also including relations between the state and the business sector. Chinese technology policy traditionally relies on large companies, “national champions.” But due to the limited efficiency of both state-owned enterprises and private companies, fast-growing tech-intensive small and medium enterprises in recent years have appeared in the focus of government support. Initially, they were used for import substitution and development of critical industrial technologies. But now these “little giants” are seen by the PRC as a mean to balance the national innovation system (including new sources of “creative destruction”). However, this, as well as other policies and instruments, also has an ad-hoc nature. The PRC needs to systematize its policy and stress connections between different measures and actors. The role of the state is also questionable, since it has become more interventionist. Further formation of the NIS institutions is required.