The battle for digital supremacy

“Desigend by Apple in California. Assembled in China”. For the past decade the words embossed on the back of iPhones have served as shorthand for the technological bargain between the world’s two biggest economies: America supplies the brains and China the brawn. Not any more. China’s world-class tech giants, Alibaba and Tencent, have market values of around $500 billion, rivalling Facebook’s. China has the largest online-payments market. Its equipment is being exported across the world. It has the fastest supercomputer. It is building the world’s most lavish quantum-computing research centre. Its forthcoming satellite-navigation system will compete with America’s GPS by 2020. America is rattled. An investigation is under way that is expected to conclude that China’s theft of intellectual property has cost American companies around $1trillion; stinging tariffs may follow. Earlier in 2018 Congress introduced a bill to stop the government doing business with two Chinese telecoms firms, Huawei and ZTE. Eric Schmidt, the former chairman of Alphabet, Google’s parent, has warned that China will overtake America in artificial intelligence (AI) by 2025.