Rethinking China

I just got back from a great conference in Singapore. A central theme of the conference was that China (and Asia in general with substantial US help) isn’t ‘rising’ anymore, it has risen (again), and that the US and much of the rest of the world hasn’t recognized this yet. This makes sense. China has risen economically with India is soon to follow and it will require a big rethink in terms of how we manage the world (the UN, IMF, etc.).

However, China’s continued success(even at this juncture) may not be a good assumption. This map provides a hint as to why.

It’s a pretty simple map. It shows that the world is divided into two network ecosystems. The world and China (Russia’s network is a rounding error on the others). Why does this matter? This network map is likely a great proxy for a map AI ecosystems. Let’s dig into this a bit:

  • AIs will soon become the most valuable part of every product and service we produce globally. The opposite holds true: if you don’t produce AIs, you will suffer.
  • The production of AIs will require vast pools of real time data, billions of years in human training, and massive computational resources. In short, the bigger the network, the better the AI (social networks and search engines are providing the bootstrap for these ecosystems right now).
  • These AIs will be produced as stand alone products, they will be closely intertwined. Further, they will be constantly learning (endless and rapid iterative improvement) to tighten their fit to the populations they serve.

So, what does this mean? Initial conditions matter. China isn’t part of the early work being done on the global AI ecosystem and that absence will cost them since the vast majority of the world’s potential for economic growth exists outside of the developed economies like China.

  • China will rapidly fall behind the rest of the world in the race to build AIs. Bigger data sets. More localized data. More training. More platform lock in.
  • The AIs (products and services) that China produces will become increasingly incompatible with global products and services, making them less valuable/unsaleable.
  • China’s share of the global economy will fall and India’s (as a member of the larger global network) will zoom.

PS: This analysis is very early. Good odds it will be fairly evident in a decade.

Show your support

Clapping shows how much you appreciated John Robb’s story.