Skip Navigation

China's Accelerated Technological Ascent and the Implications for Global Power Dynamics

The fact that China has caught up with the West in critical technological domains is a clear indication that innovation in China is advancing at a faster rate. Catching up requires a growth rate exceeding that of the leader, this idea is known as the convergence theory in economics. Similarly, China's breakthroughs in foundational technologies required compound growth rates exceeding those of Western rivals.

Once parity is achieved, China's institutional advantages, such as state-driven R&D investment, centralized planning, and a vast talent pool, position it to surge ahead, leaving the West behind in the coming years. This trajectory will also extend to nations aligned with China in the BRICS bloc and the BRI. These nations stand to benefit from shared infrastructure, technology transfers, collaborative ecosystems, and, etc.

Let's look at some numbers to get a bit of perspective here. Back in 2008, China had zero HSR lines and by 2023 it operated 42,000 km of track accounting for 70% of the world's total. China eclipsed Europe and dwarfed the US's nonexistent network in just a little over a decade! The speed and scale of HSR development would not be possible without superior engineering efficiency and state coordination.

5G Infrastructure is another illustrative example. China deployed 2.3 million 5G base stations by 2023 compared to ~500,000 in the US, with Huawei leading global patent filings. In fact, Huawei became so successful at developing and deploying network equipment that Western countries started banning it because Western firms were not able to compete effectively.

Having achieved parity, China's systemic advantages will only catalyze further divergence going forward. China accounts for around half of global industrial robot installations, driven by firms like Siasun and DJI that already account for 70% of the commercial drone market. Chinese factories are increasingly integrating AI-driven logistics, drastically reducing production cycles compared to their Western counterparts. China is now the global leader in clean energy and renewables.

China is also starting to advance in areas that have no equivalent in the west. For example, Micius satellite launched in 2016 achieved the first quantum-secured intercontinental video call. There aren't any comparable Western projects in this area.

The West tried to stunt technological progress in China by cutting off exports, but that had little effect as illustrated by startups like DeepSeek that showed how these restrictions only spur further innovation.

BRICS nations end up being direct beneficiaries of this process as they gain access to cutting-edge infrastructure and co-development opportunities. Brazil adopted Huawei's 5G networks despite US pressure, leapfrogging legacy systems. Russia collaborates with China on the International Lunar Research Station, countering NASA's Artemis program. South Africa hosts Chinese-funded renewable energy projects like the De Aar solar farm which is the largest in Africa.

These partnerships bypass Western-controlled financial and tech architectures such as SWIFT and the Silicon Valley, fostering a parallel ecosystem.

While the US and EU cling to legacy strengths such as their fleeting semiconductor design advancements, their progress is hampered by their fragmented policy and constant infighting. Contrast China's "Made in China 2025" blueprint with the West's reactive, privatized R&D. China's investments in research are also producing bigger returns. China spent 2.4% of GDP on R&D in 2023 compared to 2.8% in the US, but graduated 4x the STEM students.

Finally, Chinese tech sector benefits from central planning done by the government that directs efforts towards long term development goals. On the other hand, Western tech firms prioritize shareholder returns over moonshots.

China's technological catch-up was never a sprint, it was a marathon with a steeper trajectory. Now, the fusion of scale, state capital, and strategic patience will inevitably propel China into a position of technological leadership. By extension, countries allied with China will gain shortcuts to modernization while the West risks sliding into obsolescence. The future belongs to those who build it fastest and China is laying the tracks.

3 comments
  • The investment in renewable energy is going to be a huge comparitive advantage as it will reduce the costs of everything with energy inputs over time. Extractive energy is so volatile mostly due to market speculation related to current events, and this has downstream effects on energy intensive industries and transportation. China is quickly insulating itself from these effects.

    • I agree, and people tend to underestimate the significance of this. The cost of extracting and shipping fossil fuels to where they're used is significant. Countries that can produce energy from renewable sources domestically will gain a huge economic advantage. China is insulating itself, but it's also helping developing nations build out more efficient energy infrastructure as well.

  • Western countries rejected the state having a large role in their economies in the 1980s and ushered in the era of neoliberal economics, where everything would be left to the market. That logic dictated it was cheaper to manufacture things where wages were low, and so tens of millions of manufacturing jobs disappeared in the West.

    Fast-forward to the 2020s and the flaws in neoliberal economics seem all too apparent. Deindustrialization has made the Western working class poorer than their parents' generation. But another flaw has become increasingly apparent - by making China the world's manufacturing superpower, we seem to be making them the world's technological superpower too.

    Furthermore, this seems to be setting up a self-reinforcing virtuous cycle. EVs, batteries, lidar, drones, robotics, smartphones, AI - China seems to be becoming the leader in them all, and the development of each is reinforcing the development of all the others.

    Where does this leave the Western economic model - is it time it copies China's style of capitalism?