China has chosen the inevitable battleground with the United States: technology. This choice is dictated by historical analysis, as the Middle Kingdom lost its millennial preeminence by missing the turn of the industrial revolution.
The two planetary giants are neck and neck. China, with a population four times larger, now has an economic power comparable to that of America. For the past five years, the purchasing power of the Middle Kingdom has exceeded that of the United States (GDP converted at “PPP” exchange rates, equalizing the purchasing power of currencies).
This kind of rivalry is inherently unstable. In the second half of the 20th century, the opposition between Russia and the United States manifested as the Cold War, just after two horrific conflicts. Previous centuries were marked by other wars between empires. What will the confrontation between the United States and China look like?
Let’s start with the good news: the war should not be military. After failing in Vietnam and the Middle East, Washington no longer wants to forcibly impose its concept of democracy on the rest of the world, even if its military budget is three times higher than China’s.
On its side, Beijing has never wanted to conquer the world by force. So where will the battle between the two great powers of the first half of the 21st century take place? Where China has decided: in technology.
In the eyes of Chinese leaders, technology is at the heart of China’s peak, decline, and renaissance. In the Middle Ages, the Middle Kingdom was at the forefront of progress, with all the major technological advances of the time — the compass, gunpowder, paper. Marco Polo returned dazzled. But coal, the steam engine, factories, and electricity reshuffled the deck. And it was this technological shift that led to the decline of China’s economic power, followed by military defeat in the mid-19th century. A hundred years later, the empire was reduced to a dwarf.
This time, technology will be at the heart of the conflict. China has been preparing for this for a long time, on all fronts. First, education, with the training of millions of engineers and the selection of the best Chinese or foreign universities, originating from the famous Shanghai ranking more than fifteen years ago. Then companies, with a mix of support and freedom to foster the birth of future giants, particularly in digital — the famed American GAFAs each have their Chinese equivalent today, the BATX, which stands for Baidu, Alibaba, Tencent, and Xiaomi. Finance as well, with the flourishing of venture capital in a sector that is still highly regulated.
The Made in China 2025 strategic plan, launched in 2015, frames and extends this ambition. It has also raised American awareness of the stakes. Hence the scale of the Huawei issue, the Chinese telecommunications equipment manufacturer suspected of espionage while being a major player in 5G, the next generation of mobile phones.
Chinese mobilization is becoming increasingly visible. Chinese venture capital will soon handle more money than the American counterpart. Twice as many patents are filed in China as in the United States. Two genetically modified babies were reportedly born there at the end of 2018. In artificial intelligence, the best Chinese academic articles are on the verge of being cited more frequently than the American ones. The industry has successfully taken over the production of rare earths and solar panels. It has acquired the German robotics champion Kuka. It is targeting the automobile sector via electric propulsion and batteries. And this is just the beginning.
The battle will be long, captivating, and epic. It will pit not only two industries against each other but also two cultures, two political systems, and two world philosophies. According to the latest news, Europe will be a mere spectator.
