Thanks, Serge. Demographics are definitely a big challenge for China. Meanwhile, the West seems intent on closing itself off, which to me suggests a shift of core value creation toward populated Asia or a migration-welcoming Middle East.
Africa, meanwhile, has a clear demographic advantage and, with the second wave of electrification coming, has a real shot at leapfrogging the West and powering its industrialisation with a new-generation, renewable-powered grid—all with China’s help, of course.
Finally, while China isn’t welcoming toward immigrants by design—the CCP prefers a walled-off China—they excel at deploying resources beyond their borders and harnessing the demographic power of international partners, including, obviously, dynamic Africa.
Je suis totalement béotien sur votre sujet Merci de cette écriture claire et profonde qui permet plusieurs niveaux de lectures dont la réalité de l industrie contemporaine « bits and atomes in a light out factory »
Really well thought and inisghtful. As a China originated, US educated, and Europe working corporate lawyer, I have to say there are a couple things which I disagree with or think you have left out though:
1. The legacy of the Mao Era, which often referred to as "the former thirty years" after CCP took over China. Such legacy, such as land reform, Soviet dominated economic development and technolgy transfers, military driven constructions in remote areas, etc. etc., all paved way for the waves of industrial revolutions that happened in Deng era;
2. Crack down on IT giants. Many believe that it is necessary because these IT giants are increasingly drawn towards platform based business models, while such platforms often are public infrastructures like railways, which should not be owned privately. Also, the IT giants were getting too comfortable with profits reaped domestically with such platforms while the expectation is for them to to compete globally.
3. The landscape of Chinese century. The Chinese century is probably rushed because of the unanicipated quick down fall of the PAX Americana. So it remains to be seen how the landscape will look like. But I personally do not believe it will be limited to the economic level. In fact, there are already some cultural phenomenons emerging in the past year, like the video game Black WuKong, the movie NeZha, the APP Rednote.
Thanks, Ningning, for your comment, and I’m very glad it resonated with you! My answers:
1. Agreed—in fact, in How Asia Works, Studwell explains that it took the former thirty years to achieve land reform, which he sees as the cornerstone of any economic development strategy.
2. Noted, and thanks for the additional elements and angles! I must say this all remains very mysterious for Western observers.
3. Interesting. My friend Dave Galbraith thinks the same—that the rise of Chinese entertainment and culture at a global level not only contributes to China’s soft power, but also signals greater comfort on its part in leading the next technological revolution.
Really, really great essay. Thank you so much for taking the time to write this.
I recently did a deep dive into China, so a lot of this was very familiar, but you articulated the story really well.
With all good writing, you have to know what to leave out. I spent a lot of my time understanding China's DDDD problems. Debt, Demographics, Distribution and Domestic tension.
Which are really the only headwinds to their rise. I came to conclusions similar to yours in terms of trade "blocs," etc. A lot depends on China / Taiwan.
Thanks, Colin, for your comment and for highlighting how much the DDDD problems matter. It’s difficult to get a clear picture—on one hand, there are the China bears like Peter Zeihan, and on the other, bullish theses on China coming from unexpected places (see Balaji’s "China’s Strong, Zeihan’s Wrong" in the video below).
This is a great post and a really valuable read. Lots to absorb and think about. One thing bugs me - why do we think "humanoid" robots are the future? To me these all seem like PR gimmicks. There is a massive shift in manufacturing with robots but those robots are not human like. Is humanoid just another distraction from reality?
Thanks, Kenny—to be honest, I’m asking myself the same question! From what I understand at a surface level, humanoid robots have two advantages:
1. They offer a unique, flexible kinetic combination similar to the human body, which has been optimised by Darwinian selection over millions of years. For instance, we haven’t yet invented anything much better than a five-fingered hand with an opposing thumb for grasping physical objects.
2. They’re easier to train: have a human do the work, let the robot record the actions, then reproduce them either to the millimetre or in an optimised way.
Not convinced by No 1 - humans are incredibly adaptable but that also means we are not best designed for most narrower range jobs. Interesting to see how the real world success develop.
Great piece Nicolas.
Leaves me wondering how demographics volatility and migrations might affect those outcomes…
Thanks, Serge. Demographics are definitely a big challenge for China. Meanwhile, the West seems intent on closing itself off, which to me suggests a shift of core value creation toward populated Asia or a migration-welcoming Middle East.
Africa, meanwhile, has a clear demographic advantage and, with the second wave of electrification coming, has a real shot at leapfrogging the West and powering its industrialisation with a new-generation, renewable-powered grid—all with China’s help, of course.
Finally, while China isn’t welcoming toward immigrants by design—the CCP prefers a walled-off China—they excel at deploying resources beyond their borders and harnessing the demographic power of international partners, including, obviously, dynamic Africa.
Je suis totalement béotien sur votre sujet Merci de cette écriture claire et profonde qui permet plusieurs niveaux de lectures dont la réalité de l industrie contemporaine « bits and atomes in a light out factory »
Merci beaucoup Frédéric ! Très heureux que ça ait résonné.
Really well thought and inisghtful. As a China originated, US educated, and Europe working corporate lawyer, I have to say there are a couple things which I disagree with or think you have left out though:
1. The legacy of the Mao Era, which often referred to as "the former thirty years" after CCP took over China. Such legacy, such as land reform, Soviet dominated economic development and technolgy transfers, military driven constructions in remote areas, etc. etc., all paved way for the waves of industrial revolutions that happened in Deng era;
2. Crack down on IT giants. Many believe that it is necessary because these IT giants are increasingly drawn towards platform based business models, while such platforms often are public infrastructures like railways, which should not be owned privately. Also, the IT giants were getting too comfortable with profits reaped domestically with such platforms while the expectation is for them to to compete globally.
3. The landscape of Chinese century. The Chinese century is probably rushed because of the unanicipated quick down fall of the PAX Americana. So it remains to be seen how the landscape will look like. But I personally do not believe it will be limited to the economic level. In fact, there are already some cultural phenomenons emerging in the past year, like the video game Black WuKong, the movie NeZha, the APP Rednote.
Thanks, Ningning, for your comment, and I’m very glad it resonated with you! My answers:
1. Agreed—in fact, in How Asia Works, Studwell explains that it took the former thirty years to achieve land reform, which he sees as the cornerstone of any economic development strategy.
2. Noted, and thanks for the additional elements and angles! I must say this all remains very mysterious for Western observers.
3. Interesting. My friend Dave Galbraith thinks the same—that the rise of Chinese entertainment and culture at a global level not only contributes to China’s soft power, but also signals greater comfort on its part in leading the next technological revolution.
Excellent essay. Thanks Nicolas. Many questions asked about the future
Many thanks, Martin, for your comment!
Really, really great essay. Thank you so much for taking the time to write this.
I recently did a deep dive into China, so a lot of this was very familiar, but you articulated the story really well.
With all good writing, you have to know what to leave out. I spent a lot of my time understanding China's DDDD problems. Debt, Demographics, Distribution and Domestic tension.
Which are really the only headwinds to their rise. I came to conclusions similar to yours in terms of trade "blocs," etc. A lot depends on China / Taiwan.
Thanks, Colin, for your comment and for highlighting how much the DDDD problems matter. It’s difficult to get a clear picture—on one hand, there are the China bears like Peter Zeihan, and on the other, bullish theses on China coming from unexpected places (see Balaji’s "China’s Strong, Zeihan’s Wrong" in the video below).
https://www.youtube.com/watch?v=F-CjidoeMaE
This is a great post and a really valuable read. Lots to absorb and think about. One thing bugs me - why do we think "humanoid" robots are the future? To me these all seem like PR gimmicks. There is a massive shift in manufacturing with robots but those robots are not human like. Is humanoid just another distraction from reality?
Thanks, Kenny—to be honest, I’m asking myself the same question! From what I understand at a surface level, humanoid robots have two advantages:
1. They offer a unique, flexible kinetic combination similar to the human body, which has been optimised by Darwinian selection over millions of years. For instance, we haven’t yet invented anything much better than a five-fingered hand with an opposing thumb for grasping physical objects.
2. They’re easier to train: have a human do the work, let the robot record the actions, then reproduce them either to the millimetre or in an optimised way.
Not convinced by No 1 - humans are incredibly adaptable but that also means we are not best designed for most narrower range jobs. Interesting to see how the real world success develop.
Fantastic piece, thanks so much for putting this together.
Thank you so much, Erica—it means a lot.