China is on track to outpace the United States in advanced technology and military manufacturing by 2035, according to recent reports.
What Happened: China is projected to overtake the United States in advanced technology and military manufacturing within the next decade, according to a South China Morning Post report on Wednesday.
Recently, Lu Yongxiang, former vice-chairman of the National People's Congress, stated in the Chinese Journal of Mechanical Engineering that the decline of US manufacturing is irreversible. Lu, who has played a significant role in shaping China’s long-term strategies, emphasized that the US’s competitive edge is rapidly diminishing.
Lu, who also served as the director of the expert advisory board for the "Made in China 2025" program, predicted that by 2035, China will lead globally in manufacturing and its economy will surpass that of the US. He noted that China has already achieved most of the goals set in the "Made in China 2025" plan, despite countermeasures from Washington.
China’s rapid progress in high-end industries, such as shipbuilding and renewable energy, has outpaced expectations. However, Lu acknowledged that China still lags behind the US in some advanced fields, particularly in advanced weapons production.
Why It Matters: China’s advancements in technology and military manufacturing have significant implications for global geopolitics and economic balance. In August, it was reported that Nvidia Corp.’s high-tech AI chips were reaching Xi Jinping’s military despite U.S. trade restrictions. This indicates that China is finding ways to circumvent U.S. blockades to advance its military technology.
Moreover, China has been heavily investing in semiconductor manufacturing. In the first half of 2024, China invested $25 billion in chipmaking equipment, surpassing the combined spending of the U.S., Taiwan, and South Korea. This massive investment underscores China’s commitment to becoming a global leader in advanced technology and manufacturing.
Price Action: At the time of writing on Wednesday, KraneShares Trust KraneShares CSI China Internet ETF KWEB was up by 6.02%, iShares MSCI China ETF MCHI was up by 4.98%, iShares China Large-Cap ETF FXI was trading 5.59% higher, while Franklin FTSE China ETF FLCH was up by 5.70%, according to Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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