For years, the US has been talking about the need to recover technological sovereignty by relocating supply chains and reducing strategic dependencies. It’s a compelling narrative, fits politically and conveys a sense of control. The only problem is that it has little bearing on reality.
This article in Bloomberg, America’s AI build-out hinges on Chinese electrical parts, about the expansion of data centers in the United States, spells out the issue in stark terms: the deployment of infrastructure for AI is colliding with a critical shortage of electrical equipment, from transformers and distribution systems to other key components, the production of which relies heavily on global supply chains deeply intertwined with China. We’re not talking about advanced chips or algorithms, but about something much more basic: the physical infrastructure without which AI can’t exist. Claiming technological sovereignty while relying on another country to electrify your data centers is, to say the least, a contradiction that is difficult to sustain.
Importantly, this dependence is structural. For decades, the United States and much of the West outsourced manufacturing under the premise that the value was in the design, the software, the intellectual property. China, on the other hand, opted for something much more difficult and less glamorous: building industrial capacity. And it did so with unmatched long-term vision and strategic consistency, relying on creating vast pools of engineering talent. Each year, around 8.5 million STEM students graduate in China, almost four times the number in the United States, and since talent is evenly distributed, this means a significant surplus of highly qualified workers. When a country generates that volume of engineers on a sustained basis, it ceases to be “the factory of the world” and becomes something much more relevant: the place where the industrial systems of the future are designed, optimized and scaled. From “Made in China” to “Engineered in China”. In a few decades.
Which is why the United States no longer enjoys supremacy in key sectors. Software? Chinese engineers don’t just program, they do it on a scale and with a game-changing speed. Education? Chinese universities have reached very high levels, although they do not attract as much international talent, while Western universities continue to rely on their global appeal. Finance? The dollar may still be king, but China is edging closer through initiatives like the digital yuan, progressively expanding its global reach. The traditional reserve currency is now managed by a moron, prompting many countries to hedge their bets.
However, the real change is not in who wins each of these areas separately, but in how the whole is reconfigured. China does not need to lead in everything to become indispensable. It is enough to control the factors that sustain the system. And there its advantage is increasingly evident. In clean technologies, for example, BloombergNEF estimates that it controls more than 70% of global manufacturing capacity in many key segments. The International Federation of Robotics says it already accounts for more than half of the world’s installations and that is manufacturers are rapidly gaining ground.
At the same time, China is increasingly taking the environmental lead. It is still the largest absolute emitter, but it is also investing more than any other nation in clean energy, while accelerating its transition, which gives it a progressive cost advantage. Meanwhile, the United States commits economic suicide under the puerile mantra of “drill baby, drill”. According to the International Energy Agency and Carbon Brief’s analysis, China’s emissions are now stabiliziling and declining, thanks to the massive growth of solar and wind energy, positioning it to dominate the industry that will make this transition possible.
The irony is that Europe is unable to free itself from American technology: it lives on its platforms, its clouds, its software. In turn, the United States finds that it cannot free itself from China either, because the physical basis of its technological leadership depends on an industrial power that has been perfecting exactly what the West decided to abandon for decades. Interdependence is not symmetrical, but it is profound, and it dismantles any simplistic narrative of decoupling. In an increasingly interconnected world, Washington would do better to seek cooperation instead of competition and self-sufficiency.
Perhaps the fundamental error is to continue to pose the debate in terms of supremacy, as if the world were still a chessboard where a single actor can dominate all dimensions. What we are seeing is much more like an asymmetrical interdependence between two models with different strengths: the United States continues to lead in abstract layers such as finance, influence or digital ecosystems, while China increasingly dominates physical layers such as industry, energy, manufacturing or deployment.
And in a world in which technology is once again anchored in tangible factors such as electricity, infrastructure or materials, the relevant question is no longer who leads today, but what kind of power will be more decisive tomorrow. Because if something is beginning to become clear, it is that the leadership of the 21st century will not be decided only in the code, but in the ability to turn that code into reality. And in this area, it is increasingly difficult to argue that China is simply another player that can be sidelined.
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This post was previously published on Enrique Dans’ blog.
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