Streets ahead: China is winning the technology war against America

The US has fallen asleep at the wheel, as innovative Chinese companies lead the field in the development of electric vehicles, artificial intelligence and semiconductors, writes James Kynge

- James Kynge

Elon Musk should be ruing the day that he scoffed at BYD, the Chinese car manufacturer.

In a television interview in 2011, the Tesla chief executive was asked about competitors that might challenge his world-beating electric vehicles (EVs). He burst into laughter at the mention of BYD and said he didn’t see it as a competitor. “I don’t think they have a great product,” he said.

Fourteen years on, the script has flipped. BYD now outshines Tesla in almost every metric of performance. The revenue of BYD - which stands for Build Your Dreams - leapfrogged Tesla’s last year. The Chinese company sells many more cars worldwide than its American rival and, in March, announced a breakthrough in battery-charging technology that leaves Tesla’s Supercharger in the dust.

The story of Tesla’s eclipse by BYD is well known. What is less understood is that it represents the shape of things to come - in technology after technology, industry after industry. The disruptive power of China’s technological rise is set to be felt throughout the west, notwithstanding the trade war that Donald Trump has launched to slow down or stymie China's emergence.

The reordering of the world’s technological tectonic plates is a topic that calls for big comparisons. Some liken it to the US overtaking the UK as the world’s leading tech power over a century ago. Others, more ominously, see echoes of Germany’s “mercantilist” policies in the late 1800s as Berlin sought to catch up with the established industrial powers.

“China’s rate of progress in production and innovation across a wide range of industries is striking,” write Robert Atkinson and Stephen Ezell at the Information Technology and Innovation Foundation (ITIF), a Washington thinktank. “History has seen campaigns such as this before. From the late 1800s through World War Two, Germany illustrated how trade could be weaponised into an instrument of power, pressure and even of conquest.”