The great Chinese tech mirage

CHINA ADVISORY - Report 09 Sep 2025 by Andrew Collier

“Underestimating China” has become the new consensus of China’s current global position. From China’s rise to the collapse post-Covid, we now have a new discussion that sees China’s industrial capacity and technological prowess as a potential threat to the West.

Council on Foreign Relations Analyst Rush Doshi and former Undersecretary of State Kurt Campbell wrote a commentary in Foreign Affairs in April that argues, “Even if China’s growth slows and its system falters, it will remain formidable strategically.” Technology analyst Dan Wang has published a book, "Breakneck: China's Quest to Engineer the Future", which states that China’s economic model creates engineers who build things, in contrast to the U.S. which is a “lawerly” society that is “really good at stopping things.” In his view, China’s ability to build infrastructure, along with new technology in robotics, AI, and semiconductors, is a positive force for the country’s economic growth in the future.

I am less optimistic. Despite China’s achievements in EVs, robots and AI, the loss of the property market as a growth driver and the opposition among China’s trading partners to subsidized exports will stall high levels of Chinese investment in infrastructure and new technology. Massive subsidies are unsustainable, and transitioning to consumer-driven growth will be very difficult given China’s current low level of consumption. In addition, high corporate and government debt and a rigid state system will further reduce the chances of a successful transition to a new economic model.

How we view China’s future has significant implications for policy and forecasts for global trade, inflation/deflation, and global security.

Now read on...

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