Is GDP a good measure of the US-China competitive balance? Meanwhile, oil climbs, firms scramble for a copper mine in Botswana, and investments pick up in integrated photonics. Plus: US military ambitions for an expanded AI fleet—and questions about the national industrial base needed for the build out.
THE US-CHINA GDP RACE
Symmetric measures aren’t great gauges of asymmetric competition
Bloomberg Economics has a new projection for China’s long-term economic outlook: growth in China’s gross domestic product is slowing more and earlier than expected. That means the country is “no longer set to eclipse the US as the world’s biggest economy soon,” Bloomberg writes.
But the absolute size of their respective national economies is only one facet of the US-China great power face off. Given Beijing’s tradition of using asymmetric strategies in its approach to geo-economic competition, it would be a mistake to directly equate China’s slowing growth with any blunting of the threat it poses to the existing liberal world order.
Beijing’s recent export restrictions on gallium (and germanium) are a case in point. China accounts for about 80% of global gallium production, giving it immense leverage over foreign chipmakers.
That’s not all. China is also eyeing gallium as a critical input to next-generation technologies like gallium nitride (GaN) semiconductors and indium gallium arsenide (InGaAs) lasers. Beijing is betting that gaining dominance over key optoelectronic and microelectronic materials, and the emerging technologies that they power, will help propel it beyond legacy incumbents.
As China’s national advisory committee on the new materials industry put it recently: China should use an asymmetric strategy to tackle “chokehold” inputs and technologies. Of course, it helps to have a growing national economy to support R&D work. But the thing about asymmetric competition is that one can punch up, hard, even from a position of relative weakness.