This is THE BRIEF, one of two of our weekly columns. We are a pair of finance professionals with boots on the ground in China, each with 10 years of experience in the country. This is The Brief, a collection of charts from the past week on China’s economy and what we find interesting.

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Contents:

1. AI talent flows

2. 5G rollout

3. Quantum information science

4. Semiconductors

5. CRISPR publications

6. Green energy supply chain

7. Macro drivers of technology

8. China’s share of primary mineral production

9. Mineral production concentration

A new report entitled “The Great Tech Rivalry: China vs the U.S.” was released this month. Items 1-7 are from that report.

I. AI talent flows

Human capital is still important in developing AI. Here we see the talent flows, contrasting final destinations for post-grad work between the USA and China.

II. 5G Rollout

Measured along 5-axes, China’s 5G rollout statistics dwarf the US. Wow.

III. Quantum Information Science

QIS, Quantum Information Science, could lead to major developments in science and technology.

In 2014, the U.S. and China were tied in the number of quantum-related patents, and in 2015 China was second only to America in annual spending on quantum technology research. But by 2018—two years after China launched a “megaproject” aiming to make breakthroughs in QIS by 2030—China passed the U.S., filing more than twice as many patents and accounting for 52% of all quantum patents.

While China has elevated QIS to major importance, the US still leads in Total Citations (TC) and Citation Per Publication (CPP), a measure of the impact of the publication/research.

IV. Semiconductors

Semiconductors are a fundamental technology for our times and underpin much of the other technologies mentioned in the report.

Over the next decade, China will become the world’s largest semiconductor producer in mature technology nodes, while ASML CEO Peter Wennink estimates that “in 15 years’ time they’ll be able to do it all by themselves [and achieve technological sovereignty in semiconductors].”

Though recent U.S. actions like sanctions on Huawei and SMIC’s inclusion on the Entity List have slowed China’s progress, completely cutting off China’s access to advanced semiconductors would be a self-sabotaging policy, since the Chinese market accounts for 36% of all U.S. chip sales.

V. CRISPR publications

Biotechnology has the potential to transform humans and the world. CRISPR is one part. Note the US lead in Citations Proportion (65 vs 12).

VI. Green energy supply chain

Green Energy. China leads the green energy supply chain.

VII. Macro drivers of technology

Human capital

As observed by former Lockheed Martin CEO Norman Augustine, “The lack of human investment is the longer-term threat [to U.S. technological dominance], and it’s rather ironic we have the world’s finest research universities by and large and yet our primary and secondary education system is simply not competitive.”

Today, China graduates four times as many STEM students as the United States (1.3 million vs. 300,000) and three times as many computer scientists (185,000 vs. 65,000).

R&D expenditures

National policies & culture

For example, US companies’ reluctance to work with the Department of Defense and the continued outsourcing of manufacturing and engineering.

Our concluding thoughts on the report. It’s clearly geared towards policymakers. We note China comparisons as a tool to drive urgency for (insert your favorite) policy is popular these days. There is no doubt that technology will define great power competition as well as living standards and, in our opinion, offers the best chance of solving our climate/pollution problems.

We are reminded of James Dyson’s quote:

“In the United States, there is 19 lawyers for every one engineer.” (Said on Bloomberg TV)

Policies to incentivize engineering degrees and retain/attracting engineers may be a good place to start.

VIII. China’s share of primary mineral production

IX. Mineral production concentration

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Sincerely,
China Charts Team