Chapter 1: What are the defining stories of China's economic landscape?
Are we ready? Hello, and welcome to the World's News Sunday podcast. I'm Lingling Wei, your host today. I'm the chief China correspondent for the Wall Street Journal. Every week, I dive into the world's second largest economy and its complex relationship with the U.S. in my newsletter, WSJ China.
And recently, I asked my readers, what are your biggest questions about the U.S.-China technology race? The response has been enormous, and the questions cut right to the heart of what makes this one of the most defining stories of our time. When we talk about China today, we're really telling a tale of two Chinas. One story is about China's economic struggle.
The country's 40-year investment-driven boom is over. It's grappling with a collapsed property market, soaring youth unemployment, and deepening deflation. But the other story is about its technological progress. In fields like AI, quantum computing, telecommunications and clean energy, China isn't just a competitor. In some cases, it may be setting the pace.
To help answer some questions, I'm bringing in my colleague Peter Landers, Wall Street Journal's Asia Business Editor, based in Singapore. This year, he's taken a few trips to China and has very recent first-hand knowledge of the technology landscape there. Thanks for joining me, Peter. You bet. Peter, our first question is from Glenn Loveland from Scottsdale, Arizona.
Hi, Ling Ling. My question is, China is moving at an extraordinary pace in applied AI, EV infrastructure, and integrated mobility, building smart cities at a scale that reflects powerful alignment between industry, policy, and talent. New visa policies are also drawing in foreign expertise to accelerate this momentum.
At the same time, some expatriates, including those from China, are fleeing the U.S. under Trump 2.0. My question for you, based on what you're seeing, in which of these domains is China not just catching up, but setting new global standards? Thank you.
Excellent question, Glen. Look, China's progress is most visible in areas like electric cars, infrastructure, and application of AI. They're doing incredible things. Whether they're actually writing the global rulebook for those industries, That's another matter entirely.
A lot of China's changing technologies, they're often proprietary or they're just flat out incompatible with the system we use here in the United States or in Europe. But here's the kicker. Is the world really going to adopt a smart city blueprint that is built on China's very specific model of mass surveillance and centralized data control? I'm highly doubtful on that one.
Peter, what are you seeing on the ground in China?
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Chapter 2: How is China advancing in technology sectors like AI and EVs?
They're basically building infrastructure and trade networks that literally seek to bypass the systems long established by the United States. And with tech, they're aiming to be self-sufficient in critical technologies like semiconductors and AI, not just to catch up, but to be the global leader and setter of standards. What do you think, Peter?
What you said is entirely right. And so many fields that China is taking the world lead in. I had the opportunity when I was in China to take the bullet train from Beijing South Station to Hangzhou. It's four hours and 20 minutes, roughly. As someone who lived in Japan for a long time, it took a lot of bullet trains that are very fast and efficient and clean and enjoyable.
I was just bowled over by how pleasant this train was as well. Certainly when it comes, for example, to anybody around the world who wants to build a high-speed rail system, would probably want to consider relying on Chinese technology, Chinese trains, and the operations system.
And whenever we talk about China dominating or hoping to dominate so many different fields, whether it be AI, chips, bullet trains… Robotaxis, you name it. And the world gets nothing, only the right to buy these Chinese technologies and kind of be subservient to Beijing's leadership. One wonders whether the rest of the world really wants to be in that position.
There is a contradiction in trying to dominate everything without thinking of what the rest of the world needs and also what the rest of the world can give China in return for these technologies.
All right, Peter, thank you so much for staying up late to answer those questions.
So I really appreciate your inviting me, Lingling.
Coming up, the U.S. and China have been negotiating and renegotiating their terms on critical minerals used to make your iPhones, laptops, military jets and more. We'll have more questions from my newsletter subscribers after the break. Welcome back. Now let's get our question from Ram Ramanathan in Houston, Texas.
Regarding the recent compromises between the U.S. and China about critical minerals, but given these compromises are short-term, what do you think is the long-term resolution of this tariff and critical minerals and chips access issues that the two nations are grappling with?
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Chapter 3: What insights does Peter Landers provide about China's tech landscape?
Victor's firm invests in early-stage technology startups focused on AI and robotics, among other areas. So, Victor, what do you think?
In terms of AI race, the most important foundations are three things. Number one, AI chips. Number two, the electricity or power availability. Number three, the AI model capability. And on the model side, it's really hard to monopolize because there's a lot of publications and exchanges academically. The power side, I think China is having more power available than the US.
So the US really have the advantage in the AI chips, maybe a couple of generations ahead of China. So that's a strategic interest. for the United States. On the other hand, China, they've been investing a lot of money to build their own supply chain. So what I will see will be two parallel technical systems. China will develop their own chips and U.S.
and the rest of the world will be another system.
So in terms of the Chinese strategy, obviously, in the long run, what they're aiming for is a system that doesn't require imports of a lot of foreign stuff. But in the near to medium term, they still need access to advanced American technology. So their strategy right now is, you know, let's slow down the decoupling for as long as possible so that they can keep getting the stuff.
Yes. Similarly, from the U.S. side, the reason U.S. are willing to make a compromise over the rare earth element is because U.S. still cannot produce enough rare earth minerals. Right. So once they can produce enough, they probably don't care anymore. Similarly, if China can produce their own advanced AI chips, they probably don't care about the export control anymore.
Fascinating. Thank you so much, Victor, for your time. Really appreciate it.
You're welcome, Lingling.
Since we recorded the interview with Victor, a concession was made by Washington on the chip front. President Trump is allowing Nvidia to sell its higher-performing H200 AI chips to China. For Beijing, this could be a big win because right now it's still lagging in the AI race. Having a high-quality chip like that could give the country a chance to catch up.
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