The Innovation Landscape.

Robots calling balls and strikes.

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1. ITIF (Information Technology and Inovation Foundation)

China has emerged as the leading global power in the creation of emerging technologies, dramatically outperforming the United States in the vast majority of critical technological fields. A key indicator of this is that China is dominating the United States when it comes to scientific publications.

This is concerning as it threatens to erode U.S. leadership across the innovation landscape. ITIF conducted a comprehensive analysis of China’s innovation capabilities last year, and that research concluded that China’s strategic, state-backed scientific advancement across advanced sectors—driven by bold industrial policy, generous government subsidies, and ecosystem integration—has resulted in a surge of global patents, indicating it has transitioned to become a global innovation leader. China is demonstrating dominance in robotics, leading in battery supply, innovating public health by doubling clinical biotech trials, outpacing in quantum communication with a 1,200-mile QKD corridor, experiencing near-peer achievement in AI output, and narrowing gaps in semiconductors and chemicals.

Similarly, according to the latest findings from Australian Strategic Policy Institute’s (ASPI) Critical Technology Tracker, which evaluates 64 critical technology categories across 8 domains (e.g., artificial intelligence and robotics), show that China leading in 57, while the United States leads in only 7 technology sub-categories. This is concerning because these critical technologies are the key input to advanced sectors that China is quickly overtaking.

When evaluating the top 10 percent of high-quality scientific publications, ASPI finds that China surpasses the United States across all 8 critical technology domains. The gap is particularly pronounced in the energy and environment domain, where China accounts for 46 percent of top-tier publications compared to just 10 percent for the United States. Despite U.S. leadership in AI, China produces more top publications, contributing 30 percent versus 18 percent for the United States. (Sources: itif.org, techtracker.aspi.org.au)

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2. ITIF:

China’s progress is the result of decades-long investments in education and research aimed at building technological capability. These investments are now yielding significant returns, with implications for military, economic, and scientific leadership. China’s aggressive talent recruitment programs, such as the Thousand Talents Plan, have successfully lured foreign-educated science and technology experts to help accelerate progress in specific industries, particularly semiconductor manufacturing. Furthermore, China’s heavy emphasis on STEM education has led it to award more STEM degrees than any country in the world—more than four times the number awarded in the United States.

Importantly, the Chinese government has also established strong linkages between academia, industry, and the military as part of its “Military-Civil Fusion” strategy. By eliminating institutional barriers between the civilian and military sectors, China has stimulated the rapid development of emerging technologies in service of its national defense and strategic ambitions. (Sources: itif.org, chinatalenttracker.cset.tech, state.gov)

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3. The Economist:

China’s industrial might is hard to capture in numbers. The country accounts for more than 30% of global manufacturing, or more than America, Germany, Japan and South Korea combined. That figure understates the growing terror that Chinese-made stuff inspires in foreign competitors and governments alike.

Chinese goods are cheap and getting cheaper, because firms there are both efficient and locked in a domestic price war of epic brutality. After nearly three years of continuous falls in factory-gate prices, many firms are bleeding money and desperate to sell into foreign markets, where margins are fatter. Chinese export growth is impressive when measured by value. It is positively fantastical when measured by volume. Just before the covid-19 pandemic, a third of all containers carrying exports around the world contained stuff assembled, grown or processed in China. Today China’s share of global export containers is over 36%, though the country represents around a fifth of world GDP. A foreign-business boss in China foresees a reckoning: “There will come a point in time when China and the world simply cannot absorb more Chinese goods, and I think that point is approaching.” (Source: economist.com)

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4. Nick Eberstadt:

(I)t’s really hard to wrap one’s head around this, but the childbearing patterns in East Asia are about 50% below the level that would be needed for long term population stability. We are flirting with a regional average of about one birth per woman per lifetime in East Asia. And in some places like Taiwan, like South Korea, like large portions of enormous China, we’re already well below one birth per woman per lifetime. (Source: hoover.org)

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