Pepe Escobar
Nov 15
My latest China one-two - with links accessible across the West:
Tech Sinica + Tech/trade cards Made in China.
Tang rider got it:
中 华 Zhong Hua - The Splendid Central Civilization - is on a roll.
https://sovereignista.com/2025/11/13...ovation-drive/
https://sovereignista.com/2025/11/14...made-in-china/
https://x.com/RealPepeEscobar/status...66230488424572
https://sovereignista.com/2025/11/13...ovation-drive/
Pepe Escobar: Tech Sinica – China’s Relentless Innovation Drive – Chronicles – Sovereign Global Majority
amarynth
China’s innovation drive is reaching fever pitch in 2025. Let’s cut to the chase and focus on four crucial domains.
1.The Huawei Factor
1.Huawei is already testing its first, self-developed EUV lithography machine capable of producing 3nm chips. Trial tests are going full blast at the research center in Dongguan, and mass production should start in 2026.
It’s impossible to overstate how much of a game-changing paradigm this Chinese breatkthrough – specifically in laser-induced discharge plasma (LDP) – is all about. It’s set to turn the seminconductor technology environment totally upside down.
The physics involved in Huawei’s LDP is fundamentally different from the method employed by the Dutch ASML’s de facto monopoly. This being China, it’s simpler, smaller and cheaper.
Huawei’s technology is bound to smash that monopoly while solidifying China’s chip independence. Talk about cost efficiency: Huawei aims to produce EUV machines at a fraction of the cost of ASML’s (around $350 million for each unit), and no less than flood China with homegrown 3 nm chips.
All that is happening after the proverbial Western “experts”, following the 2019 sanctions imposed by Trump 1.0, dictated that China would take up to 15 years to just catch up. After all, EUV technology is too deeply embedded in the Western-controlled supply chain. It was assumed that China would never be able to smash the monopoly.
Well, of course any monopoly is smashable when public-private partnerships – in academia and tech – release untold billions of dollars into R&D, rally the best minds, and focus on building an EUV eco-system from scratch.
This is not only about tech; it’s a geoeconomic and geopolitical earthquake. There was a serious debate going on across China that it would be a matter between 2 and 3 years to cut off any dependence on US/Western tech. Well, Huawei and SMIC will be moving closer to mass production of these 3 nm chips already by next year. Not hard to do the math on where the future of global chipmaking lies.
Invest In R&D And Reach Patent Heaven
Now cut to Fan Zhiyong, Huawei’s Vice-President and Minister of Intellectual Property, talking at the company’s 6th Innovation and Intellectual Property Forum this past Tuesday.
He explained how “from the brand-new HarmonyOS 6 operating system to the powerful Atlas 950 supernode, our R&D team has achieved remarkable successes. Although many leading software and hardware products are massive systems engineering projects, we are making every effort to make them open to everyone.”
Huawei conducts an innovation and intellectual property forum nearly every year, discussing the importance of open/protected intellectual property as well as promoting its Top Ten Inventions: this year they featured, among others, supernodes; the Harmony OS; foldable screens; short-range optical interconnects; and next-generation solid state drives.
There’s no secret: a lot of investment in R&D is behind all these breakthroughs. Over the past five years, Huawei has invested more than 20% of its annual sales revenue in R&D. According to the EU Industrial R&D Scoreboard 2024, Huawei is Number 6 globally in R&D expenditure.
Huawei does not see these accomplishments as leading to a “closed garden”. On the contrary: the strategy is to foment an “open industry”, including the launch of a series of new open source software and hardware.
This opennes is reflected by the fact that Huawei is one of the world’s largest patent holders. By the end of 2024, Huawei held over 150,000 valid authorized patents globally, ranging from over 50,000 Chinese patents to over 29,000 patents in the U.S. and 19,000 in Europe.
And that brings us to…
2. Total Tech Sufficiency
And of course that is centered on AI. Cut to three recent key tech moves:
A. Beijing has banned foreign AI chips in every state-funded data center across the nation. Exempted will be only a few private companies which build their own data centers.
B. Local and regional governments were encouraged and are already subsidizing the electricity bills of AI data centers. China has a key infrastructure advantage over the US: cheap and extremely abundant power – as I saw it in my recent travels in Xinjiang. That is essential to offset the cost of switching to domestic chips, a more energy-intensive operation. For example, Huawei’s AI server system – CloudMatrix 384 – consumes more energy than Nvidia’s NVL72 system.
C. Beijing is also rolling out a new, ambitious “AI Plus Manufacturing” plan, included in the broader AI Plus initiative.
Point A is ultra-pertinent because Trump 2.0 is debating whether to allow Nvidia to sell a downgraded version of its Blackwell chips to China. Nvidia’s CEO Jensen Huang is lobbying for it like there’s no tomorrow, desperate of losing the Chinese market to Huawei for good. He bombastically announced that China is only “nanosenconds” behind the US on semiconductors.
Point C is also ultra-pertinent because as we saw with the Hauwei factor, Beijing is going for no holds barred AI chip self-sufficiency.
Beijing is deploying a very clever strategy. No foreign chips in data centers means a de facto protected market to domestic chip innovators which match foreign chip performances. Talk about a massive incentive.
Li Lecheng, Minister of Industry and Information Technology (MIIT), has announced that MIIT will soon issue an “AI Plus Manufacturing” plan, focusing on rolling out AI upgrades in key industries; expanding intelligent assisted design, virtual simulation, and early defect detection; promoting brand new AI-enabled mobile phones and computers; and accelerating R&D for next-generation intel devices such as humanoid robots and brain-computer interfaces.
In a nutshell: that is how Beijing wants to implement AI in every nook and cranny of the Chinese economy. It’s a no holds barred total innovation strategy. Sanctions? What sanctions?
What A Stable And Resilient China May Accomplish
3. Clean Energy
This revolution is already on – with China leaping ahead of the whole collective West, installing, for instance, nearly 900 gigawatt of solar capacity, more than the US-EU combo.
Last year, China generated 1826 terawatt/hour of electricity out of solar and wind power – five times the energy equivalent of all its nuclear warheads.
Yes: that’s a certified energy superpower.
4. An Early-Warning Detection Big Data Platform
The Nanjing Research Institute of Electronics Technology – China’s number one defense-electronics center and a hub of key innovation even under US sanctions – is developing a ground-breaking “distributed early-warning detection big data platform” capable of tracking up to 1,000 missile launches worldwide in real time.
The platform fuses data from an enormous array of space-, air-, sea-, and ground-based sensors, using advanced algorithms to distinguish warheads from decoys and proceed to action across secure networks.
The system integrates literally anything: fragmented, heterogeneous data streams from multiple sources – radars, satellites, optical, electronic reconnaissance systems – no matter where they come from, and when.
Cue to the system’s integration with interceptor missiles. During the Victory Day military parade last September in Beijing, China presented a new generation of air defense and anti-ballistic missiles, including the HQ-29, capable of intercepting hostile missiles beyond the atmosphere. Call it the Chinese Dragon Dome.
These are only 4 vectors amid the concerted Chinese tech drive, one of the key themes of the next Five-Year Plan to be approved next March in the “Two Sessions” in Beijing.
Now cut to Ronnie Chan, the Chair Emeritus of the Asia Society and the chairman of its Hong Kong Centre. He’s one of those affable old-school Hong Kong elite members who’s seen it all – and capable of synthesizing what’s ahead in a sharp and sweet manner. What he said recently at a seminar organized by the Shanghai Development Research Foundation could not be more relevant.
Let’s take just three key takeaways:
1.
“The Chinese people are resilient and patient. As long as domestic stability is maintained, external pressure only strengthens their endurance (…) in this China–U.S. rivalry, there will be no true winner, but the side that stands longer in the end will be China.”
2.
“China’s economy has not been over-financialised, and it continues to be grounded in the real economy. Only when manufacturing is strong can a nation remain stable and resilient.”
3.
“China must stay calm — neither blindly optimistic nor blindly pessimistic. China possess a vast market, a complete industrial chain, and a diligent population. As long as internal stability holds, external pressures cannot defeat it. The real opportunities ahead do not lie in real estate or finance, but in the service sector and innovation-driven real economies.”
There is no Chinese “miracle”: it’s all about planning and hard work.
And now to the next stage: no holds barred innovation.
https://sovereignista.com/2025/11/14...made-in-china/
Why the trade/tech cards are Made in China – Chronicles – Sovereign Global Majority
amarynth
Targeting allies and manufacturing foes is the last card available to the Empire of Chaos.
Pepe Escobar – Strategic Culture
China is right in the middle of a true tech onslaught – which in several ways works as a sort of wrap-up of Made in China 2025, conceived and launched 10 years ago, and a resounding success even facing at least two tariff/sanctions offensives by Trump 1.0 and Trump 2.0.
A stellar Chinese analysis by Chen Jing, published by my friends at Guancha in Shanghai, concisely interprets the importance of key vectors and variables linked to the tech onslaught. Here’s an essential breakdown, with my own comments.
The China-US decoupling
The US as a Chinese export market now represents less than 10% of total exports. In parallel, as I observed in my visits to China this year – from Shanghai and Beijing to Xian and Xinjiang – there’s no psychological fear anymore of the much-touted “decoupling”. After the Trump-Xi meeting, it became clear that what is already in effect is a managed decoupling. Beijing is cool, calm and collected: after all, it’s able to expand in markets all across the Global South. Especially because more trade usually walks side by side with more infrastructure development projects: that’s the logic behind the New Silk Roads/BRI.
China’s 15th Five-Year Plan
What was recently debated in four days in Beijing – and will be approved next March during the Two Sessions – is already rolling, as in “decisive breakthroughs in key core technologies in major areas such as integrated circuits, industrial machine tools, high-end instruments, basic software, advanced materials, and biomanufacturing.” That’s all Made in China 2025 material. The conclusion is stark: sooner, rather than later, China simply won’t need anything from the Western high-tech industrial chain. Call it industrial decoupling. And the cards, once again, are Made in China.
The US debt crisis
The analysis recalls a comparison between the US debt in 2019, before Covid – $21 trillion, with $300 billion in annual interest – with 2025: $38 trillion, with interest projected at $1.3 trillion, way ahead of the Pentagon’s budget. You don’t need to be Prof. Michael Hudson to do the math: long-term US debt is the ultimate – unpayable – nightmare. And the US debt has alreay morphed into a US dollar crisis.
The SWIFT factor
The analysis touches on a key issue regarding SWIFT. The US dollar is still responsible for approximately 47% of SWIFT transactions. The yuan share, meanwile, fell from 4.74% in July 2024 to 2.93% in August 2025. So the yuan is not exactly becoming more international. Why? Bacause the yuan is being decoupled from SWIFT, on purpose: China is encouraging the Global South – no less than 189 countries and regions – to use CIPS on international trade/financial transactions. CIPS is progressing non-stop: a year-on-year increase of approximately 42% compared to 2024.
Call it China preparing itself for financial decoupling. Even if Washington decided to cut off China from SWIFT like it did with Russia, Beijing would have no problems leveraging its massive trade power to then really internationalize the yuan.
A new path of globalization, with China at the core?
The rare earth saga.
In 2025, China entered escape velocity. The reaction to the Trump Tariff Tantrum came with unwavering self-confidence. It was a marvel to observe that on the spot in Shanghai. The analysis recognizes that much of China’s force derives from its rare earth potential.
Already in July 2023 export controls were imposed on gallium and germanium. This summarizes China’s share and position in the production of metals and rare elements, showing that “China’s advantages go far beyond the 17 rare earth elements that have recently caused panic and helplessness in the Western camp.”
There are 21 elements in the export control list; only seven are medium and heavy rare earth elements. There are several other categories such as rare refractory metals, rare dispersed metals, rare light metals, and non-ferrous heavy metals.
One of the key points of the analysis is that not only the US, but the G7 as a whole no longer has the power to dictate the rules of the global economy. China “can withstand the G7 on its own”. Especially when the myth of US industrial strength has been shattered.
That opens a new Pandora’s box of discussion: is the global majority already moving to a new path of globalization, with China at its core?
The AI bubble
So AI may turn out to be the US’s last hope to turn the tide. The problem is the humongous size of the US AI bubble – a pillar of the US economy. It will eventually burst – and the consequences are unimaginable.
Meta, OpenAI, Nvidia, and others are pouring stratospheric funds into scaling-up large language models (LLMs) and massive data centers. That may not be enough to prevent the AI bubble burst – in an environment dictated by mega-corporations only focused on quick profits.
Cue to a quite worrying prospect fueling their paranoia. Several high-level Chinese models – such as DeepSeek, QWEN and the Kimi K2 series – already dominate global AI open source. The Americans practice “closed-source” – where the thing that matters most is how to monetize their gigantic models.
China is playing a very clever game: delaying the release of Deep Seek R2 – an open source, large-scale model. Why? Because releasing it now would mostly benefit Nvidia’s GPUs, boosting their sales and of course the US stock market.
China is nearly ready to complete domestic GPU computer clusters. DeepSeek R2 is built upon these clusters. The result: that will directly disrupt US dominance. As a Shanghai expert puts it: “How can American AI, hampered by power shortages, lack of open-source access, and high energy consumption, compete with the low-power, open-source, large-scale model that offers a significant advantage?”
MAGA: the Magically Globally Aggressive model
At the recent AI Future Summit, Nvidia’s Jensen Huang went straight to the point: China would definitely win the US-China AI competition.
A key reason is that China’s AI is about productive capitalism – and not speculation. Chinese AI is primarily used in industrial manufacturing sectors such as mining, energy, water conservancy, metallurgy, and military. Large-scale AI models combined with sensors, industrial communication, and automated control at their core, are largely applied to real-life applications, addressing real-life problems in meteorology, marine agriculture, earth machinery, aerospace, civil geology. They truly integrate algorithms and computing power into production.
History tells us that all industrial and tech revolutions have been closely related to real-life production – from steel production and electricity generation to the chemical industry and telecommunications engineering.
All that brings us back to the defining psycho-killer outlook of the Trump 2.0 administration. Incapable of really “winning” a tech war against the largest economy on the planet by PPP, the imperative has switched to harassing and plundering weaker nations seen as easy prey, especially in terms of grabbing their natural resources.
Meanwhile, domestically, Trump 2.0 dreams of reviving manufacturing – the MAGA way. Call it the Magically Globally Aggressive (MAGA) model, deviating attention from what really matters: the monstrous debt; the declining power of the US dollar; the tech bubble; inflation; real geopolitics. Plunder – targeting allies and manufactured foes alike – is the last card available to the Empire of Chaos.
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