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Saturday 26th August 2023
How China Leads The U.S. in Advanced Technology ...
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| | Hi Friend,
Our post last week on China, created quite a few comments. Sinophobes claim China could go the same way Japan did at the beginning of the 1990s when the stock market crashed. The signs are all there, a property market bubble, excessive loan growth, an export-led mercantilism, plus an aging population and low birth rate. Foreign Direct Investment is slowing. The lost decade awaits the Chinese economy. But does it?
We still expect China to overtake the U.S. as the largest economy in the world by 2038. The potential remains huge. China is the second largest economy in the world but still struggles to make it into the top 50 in terms of GDP per capita.
The property sector may be under pressure but the economy has the potential to transition further and faster from an investment - export dominated focus to a western household consumption model.
Investment as a share of GDP is over 40% compared to the U.S. just over 20%. Household expenditure, is under 40% compared to a U.S figure of almost 70%. (61% in the UK 2022 basis).
Development of household expenditure and the service sector would mean the capacity for growth is realized. Youth unemployment mitigated in the process. |
| | China Leads the U.S. in Advanced Technology ...
More significantly research from the Australian Strategic Policy Institute suggests China leads the U.S. in technology, despite the restrictions on Huawei and the chip squeeze. ASPI claims China leads in 37 out of 44 key advanced technologies.
Research reveals China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a stunning lead in high-impact research across the majority of critical and emerging technology domains.
Western democracies it is argued, are losing the global technological competition, including the race for scientific and research breakthroughs and the ability to retain global talent. These are crucial ingredients that underpin the development and control of the world’s most important technologies, including those that don’t yet exist.
China’s global lead extends to 37 out of 44 technologies that ASPI is tracking, covering a range of sectors spanning defence, space, robotics, energy, the environment, biotechnology, artificial intelligence (AI), advanced materials and key quantum technology areas.
The Critical Technology Tracker shows that, for some technologies, all of the world’s top 10 leading research institutions are based in China and are collectively generating nine times more high-impact research papers than the second-ranked country, most often the U.S.
The Chinese Academy of Sciences ranks highly (often first or second) across many of the 44 technologies included in the Critical Technology Tracker. ASPI sees China’s efforts being bolstered through talent and knowledge import. One-fifth of its high-impact papers are being authored by researchers with postgraduate training in a Five-Eyes country. Five Eyes Countries are Australia, Canada, New Zealand, the United Kingdom and the United States
A key area in which China excels is defence and space-related technologies. China’s lead is the product of deliberate design and long-term policy planning, as repeatedly outlined by Xi Jinping and his predecessors.
The ASPI dataset reveals there’s a large gap between China and the US, as the leading two countries, and everyone else. The US comes second in the majority of the 44 technologies examined in the Critical Technology Tracker. The US lead is confined to areas such as high performance computing, quantum computing and vaccines.
Hope for the UK? The race to be the next most important technological powerhouse is a close one between the UK and India, both of which claim a place in the top five countries in 29 of the 44 technologies. South Korea and Germany follow closely behind.
Could a bigger Brics bloc be a global match for the G7? The new members of the China-led group will add to its economic clout but that is unlikely to translate into political weight any time soon. Brazil has no intention of being drawn into an East West paradox. India still has significant territorial disputes with China. Russia will remain a pariah on the international stage following the invasion of Ukraine and South Africa would be loathe to accept engagement in the second partition of Africa by colonialist powers.
Our hypothesis remains. China will overtake the U.S. as the largest economy in the world. It may just take a bit longer than we first thought. It may have to do it, with its own chips. Clearly it has the technology to achieve that, with or without the Taiwan Semiconductor Manufacturing Company.
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| That's all for this week, have a great weekend,
John
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| | References This Week ...
ASPI is an independent, non-partisan think tank that produces expert and timely advice for Australian and global leaders. ASPI generates new ideas for policy makers, allowing them to make better-informed decisions. ASPI is one of the most authoritative and widely quoted contributors to public discussion of strategic policy issues in the Indo-Pacific region and a recognised and authoritative Australian voice in international discussion on strategic, national security, cyber, technology and foreign interference issues. |
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