Ford's CEO James Farley called China's electric vehicle industry "the most humbling thing I have ever seen." He praised China's far superior in-vehicle technology and quality, as well as its significantly lower costs. The admission, cited by L. Rafael Reif, president emeritus of the Massachusetts Institute of Technology, in a new Foreign Affairs essay, illustrates a broader pattern: China has proved in the past decade that it can be an innovation powerhouse, not merely a factory floor for technologies invented elsewhere, "Hvylya" reports.
The evidence extends across sectors. China is now far ahead of the United States in manufacturing and deploying advanced technologies including batteries, wireless telecommunications equipment, humanoid robots, and next-generation nuclear power. Its rapidly growing pharmaceutical sector has nearly caught up to America's pace of introducing new drugs. And China's military now possesses what the Pentagon calls "the world's leading hypersonic missile arsenal."
Much of this success traces back to a single policy initiative. In 2015, Beijing launched "Made in China 2025," offering massive state support to companies in sectors such as information technologies, robotics, and aerospace. Ten years later, the plan has largely succeeded. The U.S.-China Economic and Security Review Commission concluded in its 2025 report that "China now possesses a hyper-charged, state-directed manufacturing base without historic parallel."
Even in semiconductors, where China has failed to manufacture leading-edge chips for the most advanced AI models, it has built the world's largest production capacity for legacy chips used in cars and ordinary electronics. Reif warned that China's government guidance funds continue to pour capital into early-stage companies at a scale the United States cannot match.
The disadvantages of China's model are real - indiscriminate subsidies have produced deflationary spirals and massive overproduction in some sectors, and Communist Party crackdowns on entrepreneurs may prove antithetical to innovation in the long run. But so far, Reif wrote, overwhelming investment in universities, labs, and early-stage companies has more than balanced out those weaknesses.
Earlier, "Hvylya" reported on why China's limited oil reserves and fragile economy prevent it from directly confronting the United States.