The conditions for another opium war are near.
During the early 1800’s, British merchants wanted Chinese goods but the Chinese desired nothing from the West. The British solved this large deficit by waging two wars, the opium wars, to create the largest drug empire in history. The near future will see a repeat of the same conditions, where Chinese goods will be highly sought after and China, being self sufficient, will not need or want anything from the West.
Contrary to popular belief, China will not be stuck in the “middle income trap”, a sort of “dunces corner” for countries that fail to compete in the global economy by innovating.
Why do I say this? China already manufactures:
● High quality vehicles using internal combustion engines. Some of these brands have won international awards. They are poised to dominate the electric vehicle market.
● High performance CPUs at the level of intel core i5 and soon, i7…including the fabrication equipment across this extremely complex supply chain.
● high performance turbofan engine for narrow bodies airliners [the most common]
● Complex CNC machines
● Advanced robotics.
● All of their own military equipment including aircraft carriers, submarines, stealth fighter jets, tanks, fighter jet turbofan engines, missiles, sensors, rail guns, high powered lasers, etc
● high resolution satellites
● space launch vehicles
● artificial intelligence. Around 40% of the world’s top AI researchers are Chinese…even though many work outside of China.
● tunnel boring machines
● nuclear reactors for generating energy
● world’s fastest super computers
They’re even making artificial diamonds that are indistinguishable from natural diamonds, which will end the DeBeers African child slave driven monopoly.
We can argue whether they are at the world’s leading level or not. I think that is irrelevant. It is simply good enough for the vast majority of applications. Any purchases of top end Western products will be relatively negligible and insufficient to address the inevitable trade deficits.
I expected these developments to happen eventually, but not at this speed. China seems to only have a few remaining weak areas: software, entertainment/media, and branding. I think they will catch up in software the quickest. Media and branding are less certain.