Like numerous developing nations, China views technology and self-sufficiency as essential components for modernisation. What distinguishes China is its historical aspiration not just to keep pace with advanced countries but to surpass them. Since the week-long visit of US President Nixon on February 1972, which allowed the American public to view images of mainland China for the first time in over two decades, China has effectively established itself as the primary global manufacturing giant. China is at a crossroads, having to make a choice between their low-cost advantage and being a high-value innovation economy. This movement into the high-value innovation raises great concern with developed nations. We see the beginning of the “Technical Iron Curtain.”

The question that is on the world technology stage is: who controls technology and will China become a viable real threat to U.S. superiority? With the intense geopolitical and economic differences, we believe tariffs, sanctions, export controls, regulatory and technology denial functions will increase on both sides, drawing the Technical Iron Curtain to separate the world into at least two major camps.

At present, China is currently leading the world in technological innovation for:

Biotechnology. Emerging as a major player in biotech, China excels in gene editing, stem cell therapy, vaccine development, and synthetic biology. It houses the most biotech companies globally and secures the second-highest biotech funding. China is a hub for pioneering researchers and innovators in the biotechnology field.

Artificial Intelligence. China is a global AI powerhouse, leading in research and applications like facial recognition, natural language processing, computer vision, and autonomous vehicles. Boasting the largest number of AI patents, and start-ups globally, China is investing heavily in AI research and development, and has several leading AI companies, such as Baidu, Alibaba, and Tencent. China aims to be the world’s AI leader by 2030.

Robotics. China dominates the global robotics scene, being the largest market and producer of industrial robots, accounting for over 40% of global sales. The country is advancing in diverse robotics technologies, including humanoid robots, service robots, and swarm robots, with applications spanning manufacturing, healthcare, education, and entertainment.

Advanced Manufacturing. China is revolutionising its manufacturing sector, shifting from low-cost to high-end production. Heavy investments in intelligent manufacturing technologies like IoT, 3D printing, cloud computing, and big data analytics aim to enhance productivity, efficiency, quality, and sustainability. Globally, 37 Chinese factories are recognised leaders in advanced manufacturing by the World Economic Forum.

5G and Telecommunications. China is the world’s largest 5G market and has a number of leading 5G equipment manufacturers, such as Huawei and ZTE.

E-commerce and Fintech. China has the world’s largest e-commerce market and is a leader in fintech innovation. Companies such as Alibaba, Tencent, and Ant Group are developing new and innovative ways to use technology to deliver financial services.
Renewable energy. China is a global leader in renewable energy, particularly solar and wind power. Companies such as Trina Solar and Longi Solar are leading producers of solar panels.

Quantum Computing. China is a leader in quantum computing research and development. Companies such as D-Wave Systems and QC Ware are developing quantum computers that could revolutionise several industries.

In addition to these industries, China is also a leader in technological innovation in a number of other areas, such as transportation, healthcare, and education. China’s technological innovation is being driven by a number of factors, including:

Government investment. The Chinese government has made technological innovation a top priority and is investing heavily in research and development.

A large and growing domestic market. China has a large and growing domestic market for technology products and services. This provides Chinese companies with a large pool of potential customers to test and develop new products and services.

This conundrum will create two value added supply chains soon, driving competition, disruption, innovation, costs and the race for supremacy. To sum up the present situation: it is unmistakable that China is gearing up to contest America’s global leadership – China’s presence is ubiquitous.

There is a very significant “expat exodus” from Shanghai and other cities during and since the pandemic. While the current demand and supply for expatriates are significantly lower than a decade ago, there is still ongoing movement in certain sectors. For instance, the pharmaceutical, luxury fashion, automotive, service, and investment industries continue to thrive in China, requiring expat leaders and specialists. Many newcomers to China have no prior experience with pre-pandemic and Covid-era conditions, providing them with a fresh start.

The term “Dragon Suits” designates expatriate managers or executives working for multinational firms in China – whose contracts, salaries, and benefits originate from headquarters outside of China. However, the traditional expatriate contracts are becoming less common in China. This shift also encompasses individuals who typically assume roles previously held by expats, including foreigners on local contracts or Chinese managers forging careers at international companies. China’s immense size and economic prosperity continue to attract global talent.

If you’d like to hear more about how Blenheim Partners are supporting our clients in attracting current and emerging leaders to realise the true benefits of technology and digital for their organisations, contact us.

Barry Lerner
Technology Practice

References: ORF Occasional Paper, China-Britain Focus the Golden Age

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