From Factory of the World to Tech Giant: The Drivers of China’s Rise
In traditional Chinese calligraphy, linmo (臨摹) refers to the art of copying. This centuries-old practice is not seen as plagiarism but as the only path to mastery: the apprentice reproduces the gestures of great calligraphers for years before developing their own style. That ancestral philosophy echoes the trajectory of China’s technological development over the past decades.
From “Made in China” to “Created in China”
When Western economies began relocating their production to China in the 1990s, they transferred — often unknowingly — a significant amount of technological and manufacturing know-how. “China’s industrial workforce of more than 70 million people now has decades of experience making sophisticated products,” notes Dan Wang, a researcher at Stanford University.
Wang coined the concept of process knowledge — the tacit expertise acquired through repetition and experience. “You can give someone a perfectly equipped kitchen and a detailed recipe,” he says, “but without experience, they won’t cook an exceptional dish.”
The story of the iPhone in Shenzhen illustrates this perfectly. When Apple chose the southern Chinese city to assemble its smartphone in 2007, Shenzhen was merely one manufacturing hub among many. At that time, China captured only about 4 % of the device’s added value — mostly through assembly labor. By 2018, with the iPhone X, China’s share had risen to 25 %. The country now supplied OLED screens, batteries, and multiple advanced electronic components — and even contributed to design.
Within a few years, Shenzhen had evolved into a true technological cluster, concentrating both production and innovation capacity, with workers moving fluidly between firms. “An operator might assemble iPhones one year and Huawei Mates the next,” says Wang.
From a U.S. perspective, this looks like forced technology transfer.“China steals American intellectual property to avoid the long road of innovation,” FBI Director Christopher Wray declared in 2020.
An Overheating Model?
Launched in 2015, the “Made in China 2025” plan aimed to boost ten strategic industries through heavy state subsidies. A decade later, China dominates several of them: batteries (70 % of the global market), electric vehicles (75 % of production), solar panels (80 %), and drones (70 %).
Yet behind these impressive numbers lie structural vulnerabilities that threaten the model’s sustainability. Industrial overcapacity — especially in subsidized sectors — has reached alarming levels. China’s automotive industry, for example, can produce 40 million vehicles a year for domestic demand of around 25 million — a surplus of 15 million units. The result: aggressive export strategies that have triggered retaliatory tariffs — up to 45 % on electric vehicles from the EU in 2024, and 100 % from the United States.
Another fragility lies in the debt burden of state-owned enterprises, the backbone of this industrial strategy. According to IMF data, the debt of China’s non-financial firms reached roughly 160 % of GDP in 2024 — among the highest ratios in the world, far above the U.S. (80 %) or eurozone (100 %) levels. This massive reliance on public credit raises questions about the long-term viability of investments whose profitability remains uncertain.
Facing these weaknesses, Beijing’s only option is to climb even faster up the value chain — from mass manufacturing to cutting-edge innovation. That race now collides directly with U.S. interests, transforming technological competition into a first-order geopolitical confrontation.
When Two Models Compete for Control of the Digital World
The arrival of DeepSeek in January 2025 sent shockwaves through the AI industry. Developed reportedly for just $5.6 million using restricted-grade chips, the DeepSeek-R1 model rivaled ChatGPT in performance. The figure is disputed — some analysts estimate the real cost at a hundred times higher — but the message was unmistakable: China has fully entered the global AI race.
This breakthrough fits into an increasingly decisive U.S.–China rivalry, where semiconductors have become the new oil. In August 2022, Washington launched the CHIPS and Science Act — $52.7 billion in subsidies for U.S. semiconductor manufacturing — while simultaneously restricting exports of advanced chips, lithography tools, and high-performance memory. China, in turn, has been forced to focus on algorithmic optimization to compensate for limited access to top-tier computing hardware.
More broadly, this confrontation pits two philosophies of technological development against each other.
- The American model relies on decentralized innovation driven by private-sector dynamism, venture capital, universities, and targeted government investment.
- Beijing, by contrast, closely coordinates the state and its industrial champions in a long-term, hyper-centralized strategy.
According to Matthias Schulze and Daniel Voelsen of the German think tank Stiftung Wissenschaft und Politik, Beijing is cultivating “technopolitical spheres of influence that project geopolitical power and cement international dependencies.”
The Digital Silk Road: Structural Influence through Infrastructure
Beyond its manufacturing base, China is projecting its technological power globally through the Digital Silk Road — the tech arm of the Belt and Road Initiative. This strategy aims less at selling individual products than at exporting entire infrastructures, creating long-term dependencies and extending Chinese geopolitical influence. Two emblematic examples: submarine cables and 5G rollout in Africa.
Submarine Cables
Over 95 % of intercontinental communications transit via undersea cables. For decades, their installation and control were dominated by Western and Japanese consortia — a geography reflecting post-Cold-War power structures, where digital routes primarily linked North America, Europe, and Japan, leaving vast regions (Africa, Central Asia, parts of the Middle East) poorly connected or dependent on saturated pathways.
HMN Technologies — formerly Huawei Marine Networks, now owned by the state-run Hengtong Group — has upended this landscape. In just ten years, the company has laid 60,000 kilometers of submarine cables — about one-and-a-half times Earth’s circumference — making it the world’s fourth-largest player, behind SubCom (US), Alcatel Submarine Networks (France), and NEC (Japan).
5G in Africa
The rollout of 5G across Africa forms another major pillar of the Digital Silk Road. China’s competitive edge stems from multiple factors. According to the MERICS research center, Huawei and ZTE equipment costs 30–40 % less than Western equivalents — a gap enabled by concessional loans from Chinese state banks.
Huawei already accounted for roughly 70 % of 4G infrastructure on the continent and was the first to introduce 5G services there. Its dominant position in previous-generation networks naturally facilitates the 5G transition: African telecom operators, already equipped with Huawei or ZTE gear, overwhelmingly stick with these suppliers when upgrading. This dominance creates a vendor lock-in effect — switching providers would mean costly overhauls and technical reconfigurations, effectively binding countries to Chinese equipment for years to come.
A Transformed Power — and Its Fault Lines
In under three decades, China has absorbed high-tech manufacturing know-how, mastered component technology, and built a global infrastructure ecosystem. Yet this expansion faces growing constraints. Beyond its dependence on advanced semiconductors, massive industrial overcapacity and the debt levels of state-owned enterprises represent serious vulnerabilities. International trade tensions and the desire among client states to diversify suppliers are further complicating Beijing’s projection of power.
Still, the shift from “Made in China” to “Created in China” marks a profound structural transformation — the emergence of a nation now firmly established as a central player in global technological competition.