Post by Zihang Peng

It was a great privilege to listen to a wonderful panel at the Fairbank Center for Chinese Studies, Harvard University, on whether China can sustain its technological ambitions. The panel brought together leading experts such as David Bulman, Andrew Collier, Meg Rithmire, and Kellee Tsai on China's economy and technology sector. The panel centered around one dilemma for China tech: ambition meets reality. China's exports have grown substantially since 2018, which was driven by a strategic shift towards Global South markets and a $1.2 trillion trade surplus in 2025. However, its imports declined comparatively, domestic consumption was weak, and the property crisis persisted. So, the core question is: Can China have high-tech advancement without corresponding social and economic reforms? There are three perspectives emerged: 1️⃣ The Optimistic View: China is navigating a "valley" between old and new growth models. Once AI and automation deployment scale, productivity gains will solve employment and fiscal challenges. 2️⃣ The Skeptical View: The fiscal challenges are mounting—local governments are struggling, confidence is low, and reform is unlikely without a crisis. The "soft tech" (consumer services, delivery platforms...) that could help is being deprioritized in favor of "hard tech" (semiconductors, robotics...). 3️⃣ The Geopolitical Angle: Unlike the 1990s reforms, China now operates in a much more constrained global environment. Trade tensions and tech competition change the calculus fundamentally. My takeaway is that for policy analysts and researchers, China's experience illustrates the challenge of state-led innovation in an era of global integration. The developmental state model that worked for manufacturing may require fundamental adaptation for the AI/tech era—or it may not work at all. Has China achieved technological upgrading? It clearly has. However, it's also important to consider whether it can afford the cost to sustain it. It has direct implications for how we think about industrial policy, AI/tech governance, and development strategy across the region. #ChinaEconomy #TechPolicy #GlobalEconomy #DevelopmentStudies #AIGovernance #IndustrialPolicy (Image Source: https://lnkd.in/gAN_wMMN)