China’s ahead in all tech - not just DeepSeek AI
The recent “DeepSeek Sputnik moment” has underscored how far China’s technological capabilities have progressed. DeepSeek, a Chinese artificial intelligence (AI) firm, introduced its cutting-edge AI model, R1, whose performance equaled—or, in some instances, surpassed—leading Western systems. Even more astonishing is that R1 was developed at a fraction of the typical cost and with less data than its Western peers. This revelation sent ripples through global financial markets, confirming China’s capacity for significant innovation—even amid constraints such as U.S. sanctions on semiconductor exports.
Following this news, tech markets experienced a pronounced downturn. Nvidia’s stock plummeted by nearly 18%, wiping out about \$593 billion in market value—one of the most substantial single-day losses ever recorded. Other tech giants like Microsoft, Alphabet, and Broadcom also saw major drops. The Nasdaq 100 dipped around 3%, while the S&P 500 declined by almost 2%, reflecting wide-ranging apprehension among investors about the threat posed by DeepSeek’s low-cost breakthroughs.
It’s a wake-up call for Western nations, but China has been outperforming the West in multiple critical domains for some time. Below are a few prominent examples:
TikTok’s Algorithm Reigns Supreme
TikTok, created by China’s ByteDance, catapulted to international popularity due to its extraordinarily effective recommendation algorithm. The New York Times labeled this algorithm as “the secret sauce” that keeps audiences hooked. Unlike Western social media, TikTok’s machine-learning system was groundbreaking in its ability to adapt to user behavior in real time, serving up content with striking accuracy. Platforms like Facebook and Instagram had previously relied on existing social networks to drive content discovery. In response to TikTok’s meteoric success, Instagram rolled out Reels, YouTube launched Shorts, and Snapchat released Spotlight—each imitating TikTok’s short-form video model. Still, TikTok’s precise recommendations and unique user engagement strategy keep it ahead of these newer offerings (Source).
Payments: Years Ahead of the West
Alipay, introduced by Alibaba back in 2004, revolutionized how consumers in China transacted. Initially focused on facilitating online purchases within Alibaba’s ecosystem, it quickly broadened into an all-encompassing service for bill payments, peer-to-peer transfers, and QR code-based offline transactions. Even small, rural businesses readily adopted QR code payments, sidestepping the costly infrastructure associated with credit cards. China’s minimal reliance on credit cards, coupled with widespread digital adoption, fueled this swift transition. By 2012, mobile payments were commonplace in urban centers, and by the mid-2010s, street vendors and taxi drivers were routinely accepting Alipay or WeChat Pay. In contrast, Western nations continued to lean on credit cards with slower adoption of mobile payment options. By 2022, China’s mobile payments totaled \$5.5 trillion, dwarfing the \$1.4 trillion in the U.S.
EV
BYD (Build Your Dreams) stands among the fastest-expanding electric vehicle (EV) manufacturers worldwide. Although Tesla often dominates headlines, BYD’s EVs are more affordable and are rapidly eating into market share. According to Reuters, the company sold over 1.8 million EVs in 2023, surpassing Tesla in overall numbers. BYD is also pushing strongly into Europe, offering cost-effective, high-quality EVs that challenge established brands. Other Chinese EV manufacturers—NIO, XPeng, and Geely—are equally disruptive. NIO focuses on premium electric SUVs and sedans with battery-swapping tech for more convenient charging, while XPeng targets advanced self-driving functionalities and smart-cockpit features. Geely, which owns Volvo and Polestar, uses global alliances to deliver technologically advanced EVs at competitive prices. Together, these automakers are transforming the EV landscape, pushing limits in affordability, innovation, and design.
Mobile
Despite Western sanctions and trade restrictions, Huawei continues to be one of the most sought-after smartphone brands globally. Joining Huawei are other Chinese powerhouses like Xiaomi, Oppo, and Vivo, which have each built a substantial global footprint. Xiaomi excels in delivering budget-friendly yet powerful devices, capturing the hearts of cost-conscious buyers throughout Asia, Europe, and Africa. Oppo and Vivo, lauded for strong camera tech and sleek designs, have enjoyed marked success across Southeast Asia and India. According to IDC, Huawei commands a formidable presence in regions such as Africa, the Middle East, and Asia, driven by innovations like advanced 5G capabilities. Collectively, these brands exemplify China’s capacity to not just rival but often exceed Western smartphone makers.
Drones: China’s Dominance
DJI from China effectively dictates the consumer drone market, holding over 70% market share. From recreational hobbyist drones to professional-grade models for filming and agriculture, DJI is the global pacesetter. The Verge once likened DJI to “the Apple of drones” due to its design prowess and technological finesse. Conversely, U.S. and European drone businesses have grappled with restrictive regulations and export controls that stifle innovation and broader adoption. Requirements for commercial drone operations, complicated certification processes, and fragmented policies limit Western competitors, enabling DJI to maintain a sizable head start.
Robotics
China is steadily becoming a formidable force in robotics, vying with pioneers like Boston Dynamics. Companies such as Unitree Robotics and UBTech are engineering advanced robots for industrial use, logistics, and consumer markets. Unitree’s quadruped robots, for instance, cost a fraction of Boston Dynamics’ Spot, opening the door to more accessible robotics. China’s storied manufacturing sector, backed by a vast and capable workforce, further bolsters its robotics industry. Apple CEO Tim Cook once remarked that while the U.S. struggles to gather enough skilled tooling engineers in one room, China could fill multiple football stadiums. This manufacturing capability naturally extends into robotics, where mass production and scalability are vital. With the government’s “Made in China 2025” plan prioritizing robotics through large-scale investments in R&D, China is on track to dominate this arena, challenging Western companies in both ingenuity and production capacity.
Infrastructure
Few can match China’s infrastructure-building speed. It owns the planet’s largest high-speed rail network—over 42,000 kilometers as of 2023. According to the World Bank, China consistently delivers these extensive projects with high speed and cost-effectiveness, outstripping equivalent Western endeavors. This same momentum applies to roads, bridges, and urban developments, accelerating economic expansion.
Energy Production
China’s energy output has soared above that of the United States, reaching about 137.8 quadrillion British thermal units (Btu) in 2022, compared to roughly 98.5 quadrillion Btu for the U.S. In nuclear power alone, China has 23 reactors under construction, set to add around 23.7 gigawatts (GW) over the coming decade. In 2024, the State Council sanctioned five additional projects totaling 11 new reactors, hastening the sector’s growth. Meanwhile, the U.S. hasn’t erected a significant new nuclear plant in years, widening the energy gap. Germany has moved in the opposite direction, permanently shutting its last three nuclear stations in April 2023. This has heightened its reliance on imported natural gas, notably from Russia. In 2024, Germany’s state-owned energy company, Sefe, acquired 58 shipments of Russian liquefied natural gas (LNG) via France’s Dunkirk port—six times more than in 2023. These policies underscore China’s focus on energy security and innovation, while nations like Germany grow more dependent on outside suppliers.
A Patch Forward
China’s swift rise should jolt Western policymakers into action. To maintain competitiveness, the West must champion fewer regulations, open markets, and prioritize economic growth. Innovation flourishes where businesses can risk, innovate, and compete without excessive red tape. Streamlining regulations, encouraging entrepreneurial ventures, and boosting education and infrastructure can help Western nations regain a competitive advantage and secure long-term success. Ideally, leadership that emphasizes economic dynamism—like Trump’s did—will spur Europe and others to choose governance that rewards competitiveness. Otherwise, the West faces the danger of becoming yet another once-great civilization whose achievements and influence are confined to history books.