Scott Kennedy
Every day brings new headlines about Chinese tech. Maybe it’s an electric vehicle with longer-range batteries, an updated artificial intelligence model, or a humanoid robot—but the message is the same every time: China is a tech juggernaut. Some credit China’s economic model. Others believe it’s the engineer-trained leaders and hard-edged entrepreneurs who know how to work the system or the sustained transfer of tacit knowledge from the United States and others. But whatever the cause, China’s continued tech ascent seems unstoppable.
Yet equally persuasive are signs of structural weaknesses: rising debt, an aging population, a collapsed real estate market, and rising youth unemployment. China’s economy, some say, has peaked. “Involution,” or wasted production, is not only the word of the year in China but for some is another sign of an inescapable downward growth spiral. If this trajectory continues, China will find it impossible to escape the middle-income trap. If China’s economy slows down or stagnates, nearly 1 billion people could be stuck in low-income livelihoods.
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