More recently, with greater and greater technological process, we’ve found that economies are growing even faster than population and capital would suggest, but how? Simple; technology itself has been increasing. Let’s give a unit.

Let’s say labour is 2. Let’s say each get 2 capital. Let’s say technology is 1. This means each person can produce 4 units. But if one person suddenly developed efficient technology? Same amount of money, same person, but now instead of simple technology, they can get automation?

Person 1: Technology= 1: Produces 4 units.

Person 2: Technology= 5: Produces 20 units.

Let me give a historical example. Before the Spinning Wheel, an Indian and a Brit could produce cotton at the same rate, so India’s greater population and lower wages made producing cotton in India more competitive than the U.K. and India was a rich, desired country. But when the Spinning Wheel became widespread, a Brit could produce 1,000 units of cotton in the same time as an Indian could produce one, and we saw a global shift in cotton production from India to the United Kingdom (which in turn led to India producing heroin, with cheap labour and a lot of useless people, and other future problems).

As such, especially in a globalised world, being able to outperform the rest of the world gives an advantage; China’s massively cheap labour allowed it to grow to become the second largest economy in the world. But as China becomes more expensive per person, and as each person must support more and more people, and as the government spends more and more money, the demands per person increase.

Automation could be the answer to this; sufficiently increase the productivity of each person to 5x, 6x, 7x their current level, and they may be able to produce enough to offset the upcoming demographic and economic problems. It is easier to do so via technology than capital.

Information Technology

The Internet of Things; Big Data, Internet+, Cloud Computing. All are being targeted for development withinChina (Cicenia, 2018). Blockchain in China is being widely accepted and supported (Tse, 2018). 5G has been developed by Huawei (as well as other companies, discussed in more depth here). Not only that, but non-cash payments have now become the main form of payment (77% of urban people prefer non-cash payments to cash) in China (although Sweden is still ahead of China in this regard) and a major push to get the least developed parts of China to also use non-cash methods (only 67% of rural population using non-cash payments) (Morris, 2019), the digital economy now accounts for 35% of GDP (Xinhua, 2019), and most of the population uses smartphones.

There has also been a massive push to improve their telecommunications, cloud computing, big data, smart cities, and so on. We’ve seen billions of dollars invested in Germany ($13.6 billion) and the United States ($135 billion) to acquire companies and their IP (Institute for Development & Security Policy, 2018).

Several criticisms exist; under this system, all transactions become trackable by the government, and privacy will retreat before this system; however, we’ve seen how the Chinese (and the world at large) has simply decided that privacy really doesn’t matter. The U.S. has also warned how the use of face recognition technology can be used in both military and repression (McBride and Chatzsky, 2019).

Railway Technology

China has been leading the world in railway technology since 2016; China has one of the most extensive railway systems in the world, and has been actively pursuing faster and faster methods of trains, whereas most of the developed world has simply moved to planes. Newly developed technology uses magnetic levitation to move nearly 370mph (600km/ph); the only competitor to this technology is currently Japan (Metcalfe, 2019). Indeed, the One Belt One Road system relies heavily on trains over the land route. China has already begun to export this via One Belt One Road, and we can see that China has already begun to generate profits through this technology across the developing world enjoying this technology, with South America invested in with over $100 billion (Institute for Development & Security Policy, 2018).

Aerospace Equipment

China is expected to become the worlds’ largest market for aircraft by 2022, and over the next 19 years is expected to require around 7,000 aircraft. Aircraft also acts in another manner; producing aircraft is the final stage in modern manufacturing, requiring top level engineering and manufacturing, and acts as a prestige product for a country to produce (Lee, 2018).

As with many goals, China wants the production to be as domestic as possible. In this field, China hopes to hold 40% of the world market for planes, and 15% for helicopters (Lee, 2018).

China bought 300 Boeing planes in 2017, and released the C-919 commercial jet plane in the same year with 800 orders, although it is not expected to begin operation until 2021 at least and maybe later (Institute for Development & Security Policy, 2018; Lee, 2018); naturally, Chinese companies are ‘encouraged’ to purchase the Chinese made planes, which in turn threatens both Boeing and Airbus’ entry into the Chinese market, although in recent years, we’ve seen Airbus and Boeing both invest into China, using Chinese manufacturing for parts (Hinata, 2019; Lee, 2018). Even with the C-919, only half of the plane is made domestically, falling short of MIC25 goals; China recently put $15 billion into producing a domestic jet engine to put onto the C-919 (Lee, 2018).

China has tried several times in partnerships with other countries and companies such as the Shanghai Y10 (not commercially viable) and the ARJ21 (which took 14 years and only 6 are now domestically used) in the past, only to be met with limited success. Experts estimate that Chinese jet technology is 20 to 30 years behind its’ competitors. Due to restrictions on selling technology to China in this field, Chinese investment abroad has been extremely limited, below even $1 billion (Lee, 2018).

Satellites naturally have an important use in Chinese naval plans; part of the U.S. strength is the use of satellites to coordinate and communicate between their fleets and military units, and so we have seen China place emphasis on this (Axe, 2019). There is also the creation of anti-satellite missiles by the Chinese military (Carroll and Teixeira, 2019).

We have seen the Long March 5 (nicknamed ‘Fat Five’ due to its’ size) launched from Hainan, China in December, to place Shijian 20 (translates as ‘Practise 20’), a satellite with greater telecommunications technology (Jones, 2019). We can even expect a 5G private satellite to be placed in space this year (Weissberger, 2019).

In 2019, China put Chang’e 4 on the far side of the moon, the first spacecraft to do so, using the Long March 3 rocket, as well as launching over 26 satellites over the year, making China the nation who launched the most satellites this year (Carroll and Teixeira, 2019; Hill, 2019). China has built the Mars Program centre in Beijing, and plans in 2020 to put a Mars Lander on Mars, as well as relaunch the Chang’e 5 space station into space, as well as long term trying to make a Chinese space station, based on the Tianhe core module and with a Hubble-style telescope (Jones, 2019).

Ocean Engineering Equipment and High-End Vessels

This is a focus for mostly one reason; the South China Sea and controlling the security of trade in a post-U.S. order. I have covered the state of the world’s navies here, but I’ll cover the relevant parts here. China currently has 2 flat-top jump-carriers (the Shandong and Liaoning) and 30 ships that can go beyond 1,000km from Chinese land (Zeihan, 2019); due to the small size of each aircraft carrier, the fight jets J-15 cannot fly with a full fuel and ammunition load, thus having limited strength. Each fleet is expected to contain about 30 supporting ships (Axe, 2019).

Beijing was originally planning to expand up to 6 aircraft carriers (allowing three fleets, with each fleet having one aircraft carrier in a dock getting repaired or upgraded, while the other sails), however, due to technological problems, it seems that China shall only be getting about 4 aircraft carriers for the foreseeable future; a fifth of the jump carriers used by the U.S. currently (Axe, 2019; Zeihan, 2019).

The next two aircraft carriers are expected to use catapult launchers, allowing them to use heavier planes, which will allow China to have better functioning on-sea air force and better project power. There were plans to upgrade to nuclear power, but those have been shelved due to issues with the technology (Axe, 2019).

We can assume that despite recent efforts, Chinese momentum in the navy will not match the U.S. until the 23rd Century, even by Chinese sources and MIT (Axe, 2019; Zeihan, 2019).

Medical Equipment

Due to national security, China doesn’t want to rely on foreign countries for medicine, especially as the population ages and becomes ever more important over the 21st Century (Institute for Development & Security Policy, 2018).

One plan is to increase the standards required for medical equipment and medicine itself, and to raise those standards to meet industrialised nations, allowing for exports to those countries (Institute for Development & Security Policy, 2018). Of course, this will also allow domestic health to improve and provide greater health opportunities as the Chinese population ages further and further.

Other plans include the allowance of foreign data in applications to distribute medication in China, the use of global medical testing benchmarks, and the merging of domestic state-owned enterprises into singular ‘champions’ of the industry (Institute for Development & Security Policy, 2018).

Risks of Made in China 2025 and Automation

There are a couple of risks of these problems.

The first is the massive public expenditure of all programs; while railroad technology is already beginning to pay for itself, there is no guarantee of payment soon for many of these technologies. Unlike the potentially trillions of dollars the Chinese government have put into this, for example, Germany has only paid about €400 billion into these new industries (Institute for Development & Security Policy, 2018).

The second is, as China strengthens IP and technology protection, if Japan, U.S., or German companies manage to develop something before a Chinese company does, then all public expenditure into that research may be effectively wasted.

Thirdly, China is competing with already industrialised Japan, U.S., and Germany, while also competing with cheap labour-based India, Brazil, and Africa; not rich enough to be rich, not poor enough to be competitive (Institute for Development & Security Policy, 2018).

Fourthly, China is engaged in a race; as time goes on, more and more Chinese people will retire and age out of the economy while being dependant on the economy for payments via their children or social security. If China doesn’t invest enough in new technology, then it will struggle to maintain productivity enough to support the massive population with fewer workers. But if China invests too quickly, it will have to now support uncompetitive workers or risk massive layoffs as automation and efficiency simply makes large amounts of uneducated, low-skilled parts of the Chinese workforce.