Emerging industries such as AI/ML/quantum computing/advanced weapons systems/space/biotech & gene editing/clean energy/autonomous everything/IoT/cloud computing/cyber-physical systems etc. are imperative for both countries. The US has reached the point where a few tech giants are important economic drivers. Dominating new tech has become an absolute must to keep the US economy strong and military superior. If China were to beat the US national champions into the new era, it would tilt the strategic picture in a profound way.

or China, they are stuck in the middle income trap and are stuck in an economic model driven by building “stuff.” They have run out of stuff to build at the scale needed to drive real growth. They have completely saturated their entire model. They are not getting enough return on debt spending on the easy button levers as I like to think of them – infrastructure/real estate/manufacturing. It is clear that China desperately needs higher value industries to take the baton so they can escape the middle income trap and grow into being a rich country before they get too old (not to mention pay down the enormous debts accumulated to build stuff). When you combine this with the inevitable reality that these new tech areas will drive high value production in the next generation – it is imperative for China to dominate new tech in order to meet their potential.

Their strategic goals are all fantasies if they cannot transition their economy and drive a tech revolution that includes a powerful civil/military fusion in high end tech.

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