How to Beat China’s Economic Autocracy

On May 25, U.S. President Joe Biden delivered a graduation speech at the US Naval Academy and said that China’s President Xi Jinping had told him: “Democracies cannot be sustained in the 21st century, autocracies will run the world. Why? Things are changing so rapidly. Democracies require consensus, and it takes time, and you don’t have the time”. 

As the world faces disruptive forces ranging from climate change to the deglobalization movement, if we are to avoid Xi’s prediction, we must ask ourselves whether Western democracies can rebuild the ability and the speed to plan and act on these massive infrastructure investments that we once had.

Almost 80 years ago, the West faced a monumental challenge: World War II was barely over, and already the USSR was on the move, spreading its ideology around the world. Millions had died in the war, entire nations had been torn apart, but leaders in the U.S. and Europe had to prepare their people for the future. 

From the devastation of World War II came an innovative democratic solution to this never-before-seen challenge: government agencies designed to develop and execute long-term systemic visions tailored to the needs of their nations. DARPA in the U.S., MITI in Japan, Commissariat au Plan in France, and other agencies were critical in creating economic success and decades of peace. 

As we leave the first quarter of the 21st century, the West must look to the lessons of the past to beat its new leading foe: Not Russia, despite its war in Ukraine, but China, the world’s second-most powerful nation that is rapidly becoming the economic center of the technology of the future. 

Democracy’s strength is that many voices are heard, and consensus is required for progress. But that consensus comes with a price – it took the U.S. Congress two years to pass the CHIPS Act into law, and the European Union’s version is still under debate. Meanwhile, China’s government has already begun manufacturing next-generation chips, having invested almost $50 billion into chip manufacturing from 2014 to 2019. 

Likewise, France – the world’s seventh-largest economy – has been ready to build two large electricity storage facilities for decades. But instead of acting, politicians and regulators have dithered. The last 2GW French pumped storage hydropower facility was built in 1988, almost 35 years ago – while China has installed one 1GW plant each year since 2012 and plans to build many more by 2030. 

We the authors have seen the need for a new DARPA, Commissariat au Plan, and MITI firsthand. Laurent spent nine years as scientific advisor to France’s Parliament, at the crossing of the complex intricacies between science, industry and politics, notably in semiconductors and nanotechnologies. As Vice President of the French Academy of Technologies, Yves knows firsthand the demands on France’s infrastructure needs. Pierre and Christian are leaders in international AI technology and data analytics. 

While democracies debate and discuss, China dominates entire industries of the future. Want a battery for your electric car? Tesla is building a second plant in China, and the nation manufactures about 75% of the lithium-ion batteries used in the cars. Want a cell phone? Apple may be a Western company, but it is on the verge of signing a deal for chips manufactured in China. 

Some will say that having a government hand in moving individual nations, the West, and the world forward violates the individualistic and free-market nature of many European and North American nations. We see it differently, as did Western leaders 80 years ago. DARPA, MITI, and the other agencies created after World War II propelled the peace and economic prosperity that gave rise to freer markets, the spread of democratic governments, and the fall of the USSR. 

Nobody would deny that government must have a hand in war and diplomacy. We may not have a hot war to recover from, or a Cold War to fight, but the world certainly has a burgeoning economic conflict on its hands. And the longer democracies dither, the stronger China becomes.  

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