China now dominates all the technologies that define the modern world.
The 2025 Strategic Technology Tracker, released by the Australian Strategic Policy Institute last week, shows China leading in 7 of 8 areas in AI, 13 of 13 in advanced materials and manufacturing technologies, all 7 of defense, space, robotics and transport, 9 of 10 in energy and environment, and 5 of 9 in biotechnology, genetics and vaccines.
How is this possible when, despite China's near-total global technology dominance, it has only half the number of billionaires as the United States, and that number has only grown by half this year?
And China is said to be a Marxist-Leninist society, and Karl Marx was highly skeptical of technology, writing in Wages, Labor and Capital (1847): “When the means of labor take the form of machines, they immediately become competitors of the workers themselves.''
Unitree Robotics' humanoid robot participated in the 1st World Humanoid Robot Competition held in Beijing earlier this year. (Reuters: Wang Teishu)
Will the West be able to catch up?
The Chinese Communist Party, which is in charge of countries with declining working populations, has no such concerns.
The technology buses are driven by communists, not billionaires like in the US, and the few Chinese entrepreneurs who manage to make a fortune serve the pleasures of the party.
China's emergence as a technology champion was on display at the 27th High-Tech Fair held in Shenzhen last month.
The 400,000 square meter area (about 20 large cricket pitches) was filled with humanoid robots (I read and watched it on YouTube, but I wasn't there) and dazzling technology. That included a robot he banged in a boxing ring behind the scenes during an interview. There was also an entire zone dedicated to flying cars, or “eVOTL” vehicles (electric vertical take-off and landing vehicles).
Faustine Delasalle, Industrial Transition Accelerator executive, said: “In China, we're seeing an acceleration that we don't see in other parts of the world.”
China used to try to capture the West, especially the United States. Then I caught up. Currently, Western countries are trying to catch up with China, but they probably won't be able to.
There are many other engineering wonders in China than what was on display in Shenzhen last month.
Below is a random list of what I've seen recently.
- Mosquito-sized drone for surveillance operations
- A mountain in Guizhou covered with solar panels
- Cancer treatment research in which the immune system attacks tumors by making them look like pork
- Open source AI model beats human’s highest score in Math Olympiad
- The company says the humanoid robots are being shipped to industrial customers.
- Robot designed to clean hotel rooms and bathrooms
- 48,000 kilometers of high-speed railways, including the Shanghai Maglev (maglev train), which runs at speeds of over 400 km/h, with a maximum speed of 350 km/h
- The tallest bridge in the world – Huajiang Gorge Bridge
China has 'abandoned the standard innovation model'
Analyst Dan Wang explains what's behind all this in a book titled Breakneck — China's Quest to Engineering the Future.
he is china engineering While nation-building cannot be stopped, America like a lawyer This society has a “government of lawyers, for lawyers,” and is “blocking everything it can,” but Donald Trump is now bulldozing regulations.
“While the US lost its enthusiasm for engineering, China embraced engineering in all its dimensions,” Wang said.
Aerial photos show more than 60,000 solar panels installed on a barren mountain in Jinhua, China's Zhejiang province. (AFP: Yuan Xinyu)
The Chinese government spends hundreds of billions of dollars on so-called “nation-wide” industrial policies. The policy began with the “Made in China 2025'' announced ten years ago and was transformed into the 14th Five-Year Plan in 2020, which invested US$1.4 trillion over five to six years in new infrastructure such as 5G networks, smart cities, and industrial digitalization.
Blogger Noah Smith explained the meaning of “an entire nation” in a post last week: “Essentially, what China has done is abandon the standard innovation model in which governments, academics, businesses, and financiers work independently toward their own goals, and replace it with one in which the government coordinates their interactions toward a single overarching goal from start to finish.
“Essentially, the government is now trying to innovate in 'bean-to-bar', as chocolate shops call it.
“We identify a technology goal, such as becoming nationally self-sufficient in robotics, and we try to work backwards to figure out what breakthroughs are needed to achieve that goal. We then try to fund the basic and applied research to produce those breakthroughs, transfer those breakthroughs to the right companies, help companies develop new products, and help companies commercialize and scale those products.”
The government works backwards from its goals. For heaven's sake! and directing basic research and providing funding to companies to create and commercialize products.
This is what I call industry policy. No wonder they are ahead of the curve.
People try out AR glasses at the World Artificial Intelligence Conference in Shanghai earlier this year. (Reuters: Go Nakamura)
Australia's 'national AI plan' is missing
This approach also led to China gaining a monopoly on critical minerals and rare earths needed for modern technology, giving it powerful geopolitical influence, which it still wields today.
The downside is overcapacity, and governments are now trying to prevent the so-called “involution,” a cutthroat competition characterized by price wars and oversupply in crowded markets that reduces profits.
Needless to say, comparisons between China and Australia are less flattering than comparisons with the United States. We are not e-cycling on the same velodrome.
Last week, the Labor government announced its National AI Plan, which is more of a pamphlet than a full-fledged plan.
The main purpose appears to be to avoid the “10 guardrails” around AI that former Science and Industry Minister Ed Husik talked about last year.
Instead, the AI Safety Institute will receive $30 million in funding, which is fine. However, what I'm reading is, “If someone builds it, everyone dies.'' This book, co-authored by Eliezer Yudkowsky and Nate Soares, is about the impact of the current hot topic of machine superintelligence, and it convincingly discusses the events described in its rather shocking title.
If they're right, it looks like $30 million won't be enough to stop everyone from dying.
That aside, the government funding earmarked for advancing AI in the Australian National AI Plan is apparently all old funding, with $460 million of “existing funding already available or being committed to AI and related initiatives”. Also, it's not just one year, but multiple years, which isn't explicitly stated.
The Chinese government spent US$56 billion to directly support the development of AI in 2025 alone.
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China holds the key to the modern world
In other words, China is in the process of supplanting US hegemony, which is why the Trump administration is now calling the US and China the “G2.”
This marks a shift by the United States from a policy of active decoupling and containment towards China to a policy of transactional co-management, which will likely ultimately divide the world in two and leave Asia-Pacific to China.
The United States had no choice. China is not only too powerful to touch, but increasingly holds the keys to the modern world.
In many ways, authoritarian China is similar to where democratic America was in 1944, when the Bretton Woods Conference established global hegemony.
China may soon absorb Taiwan, perhaps without firing a shot. America and the world will oppose it, but they will probably do nothing and confirm a new world order.
China has many problems, but the impact of all of these on Australia is clear. In the world of G2, we have to find a way to pivot.
Alan Kohler is a financial presenter and columnist for ABC News and a contributor to Intelligent Investor.
