To What Extent Is Shenzhen Already the Leading Global Microscale Hardware Community of Engineering Practice: Ken Rogoff: Will China Really Supplant US Economic Hegemony?

Some very interesting thoughts from Ken Rogoff. But he does not seem to recognize that Shenzhen is now at least as much a global hub of hardware and manufacturing process innovation in small-scale high-tech devices as anywhere else in the world. World class communities of engineering practice are hard to build. But China looks to be building one. I would dearly love somebody to take a deep close look at Shenzhen and tell me to what extent it is already more than just “the great assembler”: Ken Rogoff: Will China Really Supplant US Economic Hegemony?: “Over the next 100 years, who takes over, Chinese workers or the robots?…

…If robots and AI are the dominant drivers of production in the coming century, perhaps having too large a population to care for–especially one that needs to be controlled through limits on Internet and information access–will turn out to be more of a hindrance for China. The rapid aging of China’s population exacerbates the challenge. As the rising importance of robotics and AI blunts China’s manufacturing edge, the ability to lead in technology will become more important. Here, the current trend toward higher concentration of power and control in the central government, as opposed to the private sector, could hamstring China as the global economy reaches higher stages of development…. The US needs to struggle with the problem of how to redistribute income internally, especially given highly concentrated ownership of new ideas and technology. But for China, there is the additional problem of how to extend its franchise as export superpower into the machine age….

The US has the potential to expand the size of its manufacturing base… in terms of output if not jobs. After all, today’s high-tech factory floors produce far more with far fewer workers. And the robots and AI are coming not just in manufacturing and driverless cars. Robo-doctors, robo-financial advisors, and robo-lawyers are just the tip of the iceberg…. China’s rapid growth has been driven mostly by technology catch-up and investment…. While China, unlike the Soviet Union, has shown vastly more competence in homegrown innovation… China’s gains still come largely from adoption of Western technology, and in some cases, appropriation of intellectual property….

In the economy of the twenty-first century, other factors, including rule of law, as well as access to energy, arable land, and clean water may also become increasingly important. China is following its own path and may yet prove that centralized systems can push development further and faster than anyone had imagined, far beyond simply being a growing middle-income country. But China’s global dominance is hardly the predetermined certainty that so many experts seem to assume…. The coming machine age could be a game changer in the battle for hegemony…

May 10, 2018


Brad DeLong
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