Enterprise China

Chapter 8PREPARING FOR THE TURBULENT WATERS AHEAD

Over the past 40 years, we have witnessed and participated in a great awakening of the Chinese giant. Chinese customers have generated trillions of dollars in revenues for millions of companies. Chinese factories have produced trillions of dollars’ worth of products and lowered costs and expanded choices for billions of consumers around the world. While some have had qualms about doing business with China, others believed that engagement would over time result in the diminishment of China's authoritarian bent and commitment to Communist rule. In the end, the liberalization of China many had hoped for did not materialize.

That notwithstanding, the rise of China has been impressive. In 2020 for the first time ever, China outspent the United States on R&D. That same year, China housed 77% of the world's installed production capacity of lithium batteries; the United States controlled just 10% of global capacity, and the European Union controlled only 4%. In 2020 China spent 4% of its GDP on biotech R&D; the United States spent just 2%. By 2020 China had also taken the lead in a range of technologies central to artificial intelligence, as well as 5G wireless, facial recognition, and factory automation. For every electric vehicle sold in the United States, four are sold in China.¹ While China still lags and is trying to catch up in many areas, it is moving quickly and has a trajectory that suggests that it may yet achieve the objectives ...