On 14 July 2019, new Chinese statistics revealed that growth in China was lowering. Media sensationally reported the news. For example, The New York Times titled “China’s Economic Growth Hits 27-Year Low as Trade War Stings” (Keith Bradsher). Meanwhile what is happening in the area of new technologies? Are other indicators available? Indeed, the famous trade war is also and even first and foremost a technological war, with far-reaching consequences in terms of geopolitics.
An American official pointed out, finally, this reality, after the June 2019 G20, in the framework of the opening of a new round of trade talks between the U.S. and China:
“At stake … is dominance of the high-tech industries of the future, from artificial intelligence to aerospace”David Lawder, Chris Prentice,”U.S., China to relaunch talks with little changed since deal fell apart”, Reuters, 9 July 2019
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The output of industrial robots is one indicator – among others – regarding the situation of the “Made in China 2025” policy. More broadly, it tells us something about China’s capacity to become “the first actor on the world stage for AI by 2030” (China State Council, New Generation Artificial Intelligence Development Plan, 20 July 2017; USITO News; Paul Mozur, “Beijing Wants A.I. to Be Made in China by 2030“, The New York Times, 20 July 2017).
We have been monitoring the Chinese production of industrial robots over the last months. In the recent batch of statistical data the China National Bureau of Statistics released, we could find the output for May 2019.
Using series starting in January 2017, we can see difficulties beginning in September 2018, as pointed out previously (★ Artificial Intelligence, the Long March towards Advanced Robots and Geopolitics – Nota articles starting with a ★ are premium articles. The introduction remains nonetheless open access). The production seem to improve in 2019. It is better than in 2017, but remains slightly lower than in 2018, as shown on the graph below.
However, if we look at growth rates the situation looks far worse indeed. China moves from a phenomenal increase in output of robots in 2017, to a strong slowdown, to negative rates.
It could have, from a Chinese point of view, elements of a shock (see Multiplicating Crises: Strategic Surprises or Strategic Shocks?).
Yet, and as shown by our first graph, what we actually see happening is more a slight decrease in production and a stagnation than a catastrophic recession. The conclusion could be that leadership by 2030 in AI, which includes robotics (see When Artificial Intelligence will Power Geopolitics – Presenting AI), most probably would actually need to be shared.
Nonetheless, the perceptual damage of the current emphasis on infinite growth is probably at work. Furthermore, this also may contribute to signal the end of China’s status as an emerging nation. China could simply enter a period characterised by more classical conditions.
This is definitely not bad in itself. Yet, this may also imply difficulties and adjustments in terms of perceptions, expectations and policies. Domestic negative impacts could also emerge, consequently. At worst, we could face the start of a dangerous escalating spiral. In such case, unmet domestic and foreign expectations would feed into each other, to worsen the economic situation. This would favour tense answers, that would not be stabilising.
Lowered growth on the one hand, stagnating output in industrial robots production, on the others, are only two indications among others. Yet, they clearly indicate that we must monitor the situation in China both domestically and in terms of international relations and geopolitics.