Pushkin Pushkin.
Hey, it's Nate and Maria.
We're dropping by today to share an excerpt from a new audiobook we think you'll find very interesting. It's called Global Tech Wars, China's Race to Dominate, and it's about how China's innovation is reshaping the global balance of power.
For decades, China's economic rise has been symbolized by the unstoppable force of its low cost manufacturing. And now China is among the leading countries and cutting edge industries like AI, electric vehicles, surveillance technology and more. When that comes a new and disruptive wave of competition, one that threatens not just Western manufacturing but also the West geopolitical dominance.
In Global Tech Wars, Financial Times veteran journalist James King not only analyzes China's rapid technological ascent, but what it means for the future.
Drawing on deep research, exclusive interviews, and first hand insights, King impacts the seismic shifts already underway, shifts that will redefine economies, industries, and global power structures in the years ahead.
Here's an excerpt of Global Tech Wars. If you want to hear more, find Global Tech Wars from Pushkin Industries and the ft at Pushkin dot Fm, slash audiobooks on Audible, Spotify, or wherever you get your audiobooks.
Chapter one, shun Jun Speed in the heart of shun Jun, a city in southern China, is the district of Hua Chiangbi and it's home to the biggest electronics market in the world. Yeah, it's a vast warren of stalls selling every kind of electronic component under the sun. So we're standing in the middle of one of the Huai Chanbi electronics markets and the scene is really quite impressive. It's basically one stall after another. There's hundreds of stalls here.
I mean there's just piles of electronic components on top of each other in a very higgeldy piggledy way. It looks like a rather eccentric hardware shop where you know that you're selling everything, but you're not quite sure where anything is.
So we have signal generators, we have multimeters, lots of different kinds of multimeters. Obviously any micro controller you could possibly want.
And in the market, I met Noah's Zerkin. He's a tech inventor from the US and he's chosen to innovate new products, not back home in America, but here in shun Jerns's inductors. For him, the electronics market is an Aladdin's cave of potential treasures.
USB con actors of every sort, including some rather exotic ones.
And these ones have here with lots of like brass looking nodules coming out of them.
It's something that I've actually been looking before it for close to a year. A suitable punch.
Yes, So what kind of products could you build with the components that we can find in these markets here?
Everything from consumer electronics devices to robots, drones, military systems, to maybe even space systems. Right, you can build anything using the components here, Yes, I mean it's such a tough question because you can literally build anything.
For decades, this part of China was known as the electronics workshop of the world. But these days shun Jen doesn't just make other people's technology. It's building its own Chinese tech, and in the process, China is emerging as a tech innovator on a course to overtake the US as the most important technology power in the world. We're here in shun Jen. We're standing by a busy road intersection surrounded by a forest of enormous skyscrapers, glass and
metal buildings reaching all the way down this long avenue. Cars, taxis, even motorbikes riding on the pavements around us. Pretty much in the center of this vast metropolis, Shunjun is known as the Silicon Valley of China, and it's changed dramatically in the last few decades. About twenty years ago, shun Jurn and the cities around it in the polar of the Delta made a name for themselves by mostly manufacturing
other countries technologies and maybe copying it as well. But now we're on the brink of a really totally different new era. These days, Chinese companies are making their own brands, innovating their own technology, and selling that to Europe, America and all over the rest of the world. Shun John is home to some of the biggest names in Chinese technology. The internet giant Tencent is based here, as is Huawei, the tech behemoth that's found itself at the center of
US China tensions over technology in recent years. There are newer trailblazers too. Dji, which essentially invented the consumer drone market, is a Shunjan company, as is byd the Chinese carmaker that is fast becoming a dominant force in electric vehicles.
It all points in one direction. Something. A think tank recently highlighted that China is overtaking the US in its capacity to innovate, and it's now ahead of the US in everything from advanced batteries to hypersonic aircraft, quantum communications and supercomputers. To understand how that has happened, you need to look at China's long history of manufacturing consumer technology.
Okay, in this bin there, these are sort of ancient prototype parts. But so let's take us down and this needs to go on the floor.
In his workshop a short walk away from Shunjan's electronics markets, the American inventor Noah Zerkin shows me what he's building, an augmented reality headset.
Okay, so there are you see. There are these three circuit boards up here, and that's just for making the displays work. And there are these two sensors, each of which have two little cameras on them, little fish eye cameras to track your hands. Then there are these two big curved mirrors that rest in front of your eyes. And the electronics on this headset are basically all made from stuff that you can find in the market downstairs.
Tech inventors like Noah have chosen to base themselves in shun Jen rather than the United States because being in Shunjen means having instant access to a vast supply chain of components and factories. It means they can work quickly develop prototype products, test them, and manufacture them all at a rapid rate.
Being able to source those components, I was able to order things mostly from places that have stalls representing them in the Watching Bay markets right that are right here, and have them arrive at my doorstep, if not that day, the next day. Same with the PCBs that the circuit boards. Nowhere else can you get twenty four hour turnaround. If I make a mistake on one of my prototypes, I can identify it, change it anywhere else.
This is a big deal.
So I can do a prototype iteration in twenty four to forty eight hours. That is not true anywhere else in the world.
The ability to prototype and manufacture tech products rapidly is giving rise to some really exciting companies in Senjen.
Very small factory, that's matter of fact, this is not a factory all right. It looks like an exhibition center, but it's not. This is a our R and D testing field, so where you can see along the windows they are are over twenty fifty chairs and those for R and D and productions staff.
Only a few miles north of La Chiangbay are the offices of the robotic startup Ui Bought. They design and build industrial robots. In their bright and spacious new research and development center. Dozens of robots move around the vast open floor, guided by lasers and algorithms. The company is growing rapidly. Just a few years ago, it was a neighbor of Noah Zerkins in a small workshop above the
electronics market. Granjen from UI Bots says access to supply chains and manufacturing expertise means startups here can operate at what he calls Hunjen speed.
For the most typical example, during the pandemic, we build a anti pandemic robot UVC lights and a serum meter camera on top within fourteen days. I'm not talking about forty days to get the conception of a robot. I mean fourteen days for the first prototype from an idea to a prototype two weeks.
That's supply chain.
Were you able to do that, we can get every single component downstairs in Jaisel, Norris.
This means Ui Bought is rapidly catching up with more established US and European competitors.
Before the pandemic, there were several strong competitors globally like we look up to them and we try to study from them. After the pandemic, when we joined the conference in Germany, we strangely realize that the European players, they still trying to sell the same thing with the one before pandemic three years earlier, and when we look at ourselves, everything's totally different.
So your R and D effort was moving at Shunjan speed.
Well, I prefer to call it Shunjan speed.
Yes, for newer startups like Ui Bot. There are plenty of examples around shun Jen of the potential global success that Chinese companies can aspire to. We've come to a different part of Shunjen. We're now in one of the big tech centers of this city. We're surrounded by huge buildings, mostly occupied by some of the biggest tech companies in China and in the world. There's a sounder construction in the background. Three more huge blocks are going up soon
to be occupied by other Chinese tech companies. And we're standing in front of the brand new headquarters of one of the companies that's really put hun Jen on the map in the last few years, and that's Dji. If you want an example of a Chinese company totally dominating a sector, Shunjan's drone maker Dji is a good example. Over the last decade, it effectively invented the consumer drone market. It now sells eight out of ten drones around the world.
When it's coming towards us, it really looks like an insect. I'd say a dragonfly or something like that. Now gone, I don't know. That must be twenty thirty meters into the sky. It's just tovering over the fore court of this building that's going even higher. Oh my, it's now a side success for Dji means a massive new headquarters, two towers that appear to hover in the sky called sky City everywhere we go in Shandani's enormous buildings.
Yeah, so if you tell here six years ago, now it's seven years ago. There's no this building right now because we got this piece of land in twenty sixteen and in twenty twenty two, we move into this building. So after six years we have this beaultiful twin building and campus here and right now we live here more than one a.
Half here already.
Christina Young showed us around the buildings and told us about the secret drone testing area housed inside one of the towers.
Before.
When we have the office that we rent, it's so difficult to find a place to fly because people are going to walk around. We need to avoid the people. And also some of the people they try to know or try to find out what is DG's next for that, so they try to still and see the product that we're testing flight. So we have the fly inside inside this building. You may see of those two box there are four floor high area.
Cell floor high area.
That's the flighting side.
Wow, that's very interesting. So they can fly in there in peace, they know nobody is watching. You can maintain your intellectual property. Nobody can see.
Yeah. And also even without the good condition, like if it's ringing windy, you can still test inside.
Have you got any really cool prototypes you're working on at the moment.
We have so many, but I cannot share now.
A company like DJI represents something that ten or twenty years ago. To observer US in the West, at least, would have been difficult to imagine a Chinese company way out in front of the competition setting the pace in the creation of leading tech products. But China's tech ambitions are not limited to robots or drones. China wants to lead the world in all kinds of cutting edge technologies.
The drone maker Dji is one example of a Chinese tech company that's leading its field in the development of technology. Huawei is another, and China might be leading in a multitude of other areas. Last year, the Australian Strategic Policy Institute, a think tank, made waves when it concluded that China now leads the world in thirty seven out of forty
four critical areas of technology. Another think tank, the Information Technology and Innovation Foundation, based in Washington, warned that China is evolving from an imitator to an innovator.
It's easy to forget now just how far behind China was in technology and how dismissive most of us in the West were about China's tech capabilities all the way up till pretty recently.
Matt Shean is a fellow in the Asia Program of the Carnegie Endowment for International Peace in the US, where would you say China is right now? Is China catching up to the US level in many technologies? Is it a peer competitor already? Is it on a trajectory to overtake I.
Think the term peer competitor captures it. I mean there are some areas where the US is clearly ahead, you know, right now, in the frontiers of AI, in large language models, in generative AI, that's an area where the US can pretty comfortably say we are ahead.
But if you look across other areas, if you look at.
Renewable energy technologies, clean technologies, battery powered vehicles, electric vehicles, China is far and away the global leader in these. It has the supply chains, it has the deep manufacturing expertise, and it's really on a trajectory currently to dominate those industries globally. Look at an area like quantum, it's still a wide open field. We don't know which sort of
path is going to be the most promising. But China is showing results that are just as impressive or roughly on par with the US across a few of those different approaches. If you look at you know the success of platform technology companies. Obviously, the US has some of the global leaders in Google, Facebook, Twitter, Amazon, But you know the most popular app in the world right now is a Chinese app. It's TikTok.
In recent years, China has overtaken the US to become the biggest file of patents in the world. Last year, Huawei filed more patents than any other company anywhere. But Shean says, innovation is not just about coming up with new ideas. It's about turning them into solutions and products at a scale that can reach a mass market.
This is really an area where Chinese manufacturing prowess is going to come into play. You know, the idea of China being the factory of the world just because it has cheap labor is way out of date. China's advantage is not the cost of its labor. It's the fact that it's built up the most sophisticated, intricate manufacturing ecosystem in the world.
That they have trained engineers who have spent thirty forty years progressively building and refining more and more precise manufacturing technologies and especially learning how to take a good idea and scale it up to the level of hundreds of thousands or millions of products.
The Chinese government has technological progress at the center of its national ambitions. Matt Chian says it's not clear that China will inevitably overtake the US, but he says China's progress so far suggests that the US cannot assume that it will always be in the lead broadly.
But I think, especially if you zoom in on the United States and on Silicon Valley, we have this narrative that technological innovation, freedom of speech, and democracy are all intimately intertwined, that you cannot have innovation unless you have free speech, free internet, political freedoms, and I think that was a nice story. It fit broadly with our perception of the way that creativity works and the way that
business and markets work. I think what China's done over the last ten to fifteen years it's essentially pulled apart that narrative that innovation depends on certain types of freedoms. You can have world leading apps come out of a country that doesn't have a free Internet. You can have some of the biggest and most successful technology companies in a country that has quite controlled markets and a very
heavy handed government. And I think it turned a lot of ideas that we had in the West on their head.
It's a profound conclusion, used to be an article of faith that you need a democracy to spur tech innovation. But China is turning that argument upside down. In an authoritarian state, you can still innovate tech products and sell them to the rest of the world via gloves off, bare knuckle capitalism. So in your daily life, how many times do you feel surprised by new products being made and new innovations?
Almost every day, almost every day.
Chijo is a venture capitalist based in shan Jin. He spent years working at Huawei and in Japanese tech companies before returning to China to capitalize on what he saw as a boom in Chinese innovation.
I forced myself to meet at least the one company one day, at least the one company one day, and read five to ten business plans one day, five to ten businesses every day, every day, almost almost so I can see a lot of innovative products.
Joe agrees that China's expertise in manufacturing has helped tech companies develop, but he says there's another factor spurring Chinese firms on the intense competition between Chinese companies for Chinese tech consumers.
Chinese guys like to use new things like application, one app, and they will give up one app very quickly too. So if you can't let them know the evaluations of your app, they will give up very quickly. This is the one point. And another point is competition. Competition. This is a different culture. I think in the Western countries, I do my business, you do yours. But in China, I don't think so. I do my business and I do your biness too.
Joe says. Chinese companies think of it in terms of survival. Innovate or die. Survive.
Survive is a very important cure in China.
China's transformation into a global tech superpower to rival the US is an incredible story. But the question now is whether China is going to maintain that momentum and power past the US and other countries to become the tech power in the world. The global success of Chun Jan's companies suggest it might, but it's not a given. I would say so.
Most advanced technology is not in China even now in some key industrials. We need some time, We need time to develop, like semiconductors like ais SO.
China is not the most advanced in terms of technology, but it's catching up fast. Do you think that China one day soon, in the next few years, could become the most advanced country for technology?
We are developed very rapidly before today. After that, I cannot predict. We are still working hard on catching up. But when we overtake the US, we don't know. And I think from the point of government, we don't think one day we have to we have to overtake America.
I don't think so.
But as the boss of the company, we have to overtake see other guys. I am a businessman. When I am invested a company, I hope say we're visa first of one in the world one day.
A changing of the guard when it comes to technology happens very rarely. For the first time, we're seeing global tech come out of an authoritarian state, without free internet, without freedom of expression, and where surveillance cameras monitor your every move. If China wins the tech race, the impact on the rest of the world will be huge, and we're already starting to see it.
We hope you enjoy this excerpt of Global Tech Wars. Find A four Audio bok at Pushkin, dot Fm, Slash Audiobooks, Audible, Spotify, or wherever you get your audio books.