Will Trump Tip the AI Race in China’s Favor?

In this analysis, authors Qiyuan Xu and Yaqiang Wang (Project Syndicate) discuss the accelerating race for AI dominance between the United States and China, a rivalry that has outgrown the earlier tariff wars and now centers on technological supremacy. The authors pose the critical question of whether China’s AI capabilities could not only catch up to those of the U.S., but possibly surpass them. They argue that American policies under former President Trump, which were intended to promote domestic innovation by limiting international collaboration, may inadvertently give China the momentum it needs to lead the next wave of technological breakthroughs.

To understand this trajectory, Xu and Wang trace China’s digital development through three distinct phases. Initially, Chinese firms copied American models, driving rapid user adoption. Between 2005 and 2015, they began localizing and improving on those models, tailoring platforms like WeChat and Taobao to the specific demands of Chinese users and surpassing Western counterparts in functionality and scale. In the most recent phase, Chinese firms have moved beyond imitation to launch original innovations, with TikTok serving as a prime example. This pattern—copy, optimize, innovate—has already propelled China ahead in sectors like renewable energy and electric vehicles, and the authors argue that AI is following the same path.

China’s rapid AI progress is exemplified by the launch of DeepSeek’s large language model, which dramatically lowered usage costs compared to OpenAI’s tools and achieved mass adoption in record time. By early 2025, the performance gap between U.S. and Chinese AI models had shrunk significantly. Underpinning this progress is China’s so-called “engineer dividend”: the country graduates four times more STEM students annually than the U.S., many of whom bring a pragmatic, hands-on approach to innovation. Combined with increasing computing power and local data advantages, this talent pool positions China to play a major—if not leading—role in the future of global AI development…

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