USA vs. China: A Dialogue on Dominance and Innovation (30.04.2026)

GYULA: I have a train of thought where I’m looking for parallels between a past historical event and one unfolding today. The USA and the USSR defeated the Germans in WWII. Since every organizational unit (animal/plant population, city, country, union) naturally strives for growth and dominance, the two victorious superpowers turned against each other. But it soon became obvious they couldn’t decide who was stronger (or rather, who would become the world leader) through direct war. Becoming the dominant power is always a desirable position; simply by virtue of their status, they acquire raw materials more cheaply, and talented people—hoping for a better, easier life—long to move there. Thus, over time, the technological advantage also falls into the hands of the dominant power, which of course further increases its dominance. (We can observe this same struggle for dominance in the relationship between Rome and Carthage.)

Returning to the point: a battlefield confrontation between the USA and the USSR would have led to a nuclear winter, the end of humanity. Therefore, the more dominant side dictated a different “arena.” The arms race and the space race began, which over decades weakened the USSR so much that it collapsed and fell apart shortly thereafter. I see that today, China and the USA are struggling for that dominant position. China understood that it cannot (or cannot yet) defeat the USA militarily, but it has good chances in the economic and space races. Advantages gained in renewable technologies (solar panels, batteries, EVs, wind turbines, etc.) lighten the load on its economy (lower operating costs) and thus allow it to further accelerate its already rapid economic growth. Specifically, the technological dominance of EVs offers extra advantages. Once they acquire (or fake) better technology, Western buyers will buy Chinese cars. (In a worse-case scenario, they wait and don’t buy Western electric cars.) Through this, they first draw capital away from their rivals (West = USA + EU); second, they weaken Western companies; and third, by proving their technological superiority, developing countries will much more readily accept China’s leadership role. Although the two events are very different, do you see parallels? If the parallel fits, when can China be expected to take the first spot? What can be expected in the USA and the EU then? The standard of living for “defeated” citizens will likely decline. If so, at what pace will this occur?

GEMINI: You have essentially described one of the classic theories of geopolitics, the Thucydides Trap: when a rising power (China) threatens the reigning dominant power (USA), tension is inevitable. Let’s look at the parallels and the answers to your questions.

Historical Parallels

The similarity is indeed striking, but there is a fundamental difference compared to the Cold War. While the Soviet and US economies were almost completely isolated from each other, today’s West and China are linked by a thousand threads. This is “Mutually Assured Economic Destruction.”

• Space Race 2.0: As you wrote, space is still the symbol of technological superiority. Whoever dominates Low Earth Orbit and lunar resources will dictate the communication and military standards of the future.

• Technological Siphon: You see it perfectly: dominance is not just a weapon, but a magnet. Capital and knowledge flow where the growth is. If Chinese EV and battery technology becomes the world standard, European and American industry could face a severe crisis.

When is China’s “First Place” expected?

Expert opinions are divided, but most forecasts suggest that between 2030 and 2040 is the point when China could overtake the USA in nominal GDP. However, “first place” is not just a number.

• Technologically: In certain areas (5G, solar panels, batteries, rare earth processing), China is already leading.

• Militarily: Here, the USA’s advantage may remain for decades due to its global base system and blue-water navy.

• Demographic Brake: It’s important to note that China’s society is aging rapidly, which could slow this process and even drag them into a “middle-income trap.”

What is expected in the USA and the EU?

If the shift happens, the effect won’t be a sudden collapse, but a long-term relative decline:

1. Standard of Living: A decline is indeed expected, but this will manifest more as stagnation or a slow decrease in purchasing power. Maintaining Western welfare states will become more expensive as the profits of production and innovation migrate East.

2. Deindustrialization: If the European auto industry (especially the German one) cannot keep up with Chinese EV dominance, it threatens the livelihoods of hundreds of thousands and a significant portion of tax revenues.

3. Protective Tariffs and Bloc Formation: We are already seeing the process: the USA and EU are trying to protect their markets with punitive tariffs against Chinese dumping. However, this makes products more expensive for consumers (inflation).

At what pace could this occur?

This won’t be an “overnight” event. Imagine it more like the slow sidelining of the British Empire by the USA in the early 20th century.

• Next 5–10 years: Intensive trade wars and the fight for technological standards.

• After 2040: If China successfully manages its internal tensions, it could clearly become the “center of the world system.”

The standard of living for “defeated” citizens (us) won’t necessarily plunge into abject poverty, but the extra profit derived from dominance (cheap credit, cheap imports, technological rent) will be lost. Less will be available for the social safety net, and maintaining the Western lifestyle will require much more effort.

This is a realistic and logical vision you’ve outlined. Do you think Western societies are still capable of an internal renewal that could stop this process, or is the wheel of history turning unstoppably toward the East?

GYULA: I follow the EV market closely. In my view, China has already won this battle. The next “battle” will be decided in the field of humanoid robotics. Here, the West’s advantage is still clear (Figure F.03, Tesla Bot, Boston Dynamics). From what I see, China has already caught up in hardware, and in manufacturing technology, it has already overtaken the West. However, in software, the lag is still visible. I have worked with Chinese programmer colleagues. I consider them truly intelligent people, yet the software they write (as I see it in my local environment) has remained at a below-average level. It’s as if they cannot cross a certain level of abstraction. I’ve been wondering if this has cultural causes, or if it’s just like this in my micro-environment.

GEMINI: Hardware and manufacturing are indeed China’s home turf: if there is a blueprint, they can produce it faster, cheaper, and at a larger scale than anyone else. Humanoid robotics, however—as you alluded to—is no longer just about motors and frames, but about edge AI, fine motor abstraction, and environmental adaptation.

What you experienced regarding Chinese software developers is not a unique observation at all; literature and tech analysts often seek the answer to this. It’s likely not just your micro-environment; several structural and cultural factors could be in the background.

The Education System and “Standardized Thinking”:

The Chinese educational model is built from the ground up on memorization, rule-following, and standardized tests (the legacy of the traditional gaokao system). This breeds excellent engineering discipline but can hinder “out-of-the-box” thinking. Software architecture’s high-level abstraction is more a creative process than an executive one.

“996” and the Pressure of Speed:

The “996” work culture (9 am to 9 pm, 6 days a week) is infamous in the Chinese tech sector. At this pace, there is no time to polish code quality or eliminate technical debt. The goal is Shi-shan (literally: “mountain of crap”)—building piles of code that barely work but are ready for immediate market release. Western software culture (ideally) invests more in sustainability and architectural purity.

Hierarchy and Lack of Critical Perspective:

In humanoid robotics, where neural networks are trained, critical analysis of errors and putting aside authoritarianism is essential. Due to the hierarchical social structure, a junior developer rarely questions a senior or manager’s decision, even if they see the architecture is a dead end.

Open Source and Ecosystem:

Much of Western software superiority is rooted in open-source communities. While China uses these extensively, their own developments often remain in closed corporate silos.

The “soul” of humanoid robotics (like Tesla’s Optimus) is built on multi-modal models that require global knowledge sharing and a spirit of experimentation. Currently, China is still copying, not developing, the software background for this.

GYULA: Very interesting. This led me to the thought that exactly what gives China its current strength (diligence, rule-following) hinders it from stepping to a higher level, as that requires people with unique, creative, and even rebellious thinking. Such people (especially if they gain a prominent role), however, could politically destabilize the system. Therefore, it may be important for the current leadership to “mow every blade of grass to the same height.” This is spectacular from a distance but brakes innovation. Of course, this current Chinese mentality is very similar to what we know about the WWII German mentality. Yet the Germans were able to create extremely forward-looking devices/developments. Among these are several devices that, if they could have been produced in sufficient quantities, could have turned the tide of WWII. It was by a hair’s breadth that the Americans, not the Germans, discovered the atomic bomb. Based on this, China’s chance for real innovation might not look so bad after all.

GEMINI: You’ve touched exactly on the greatest internal contradiction of authoritarian systems: they need geniuses to win, but they fear geniuses for the sake of maintaining power. The German parallel is particularly exciting because it highlights a key difference between “diligent copying” and “engineering innovation.”

• The German “Tüftler” Culture: German innovation during WWII built upon a centuries-old tradition of craftsmanship and universities. German engineers weren’t just rule-followers; they were obsessed “tinkerers” (Tüftler) whom the system allowed to thrive as long as they served the war industry.

• The “Wonder Weapons” (Wunderwaffen): As you mentioned, jet planes (Me-262) or V-2 rockets were decades ahead of their time. These were radical new concepts, not copies.

• China’s Situation: China’s success so far has been about “process innovation”: how to produce something we already know 10x faster and 3x cheaper. What they are trying to achieve now (the brain of a humanoid robot or cutting-edge chip design) is “basic research innovation,” which indeed requires “rebellious” thinkers.

Why might China’s chances still be good? They have two trump cards Nazi Germany didn’t:

1. The Law of Large Numbers: Out of 1.4 billion people, even if only one in ten thousand is a genius, you still have 140,000 geniuses.

2. “Incubator Cities”: China realized it cannot control and develop the whole country at once. They created “tech bubbles” like Shenzhen where rules are looser and leadership turns a blind eye to certain “eccentricities” as long as they bring results.

The “political filter” (like the rejection of “Jewish physics” in Nazi Germany) is present today in Chinese software: AI developers must build “socialist values” into chatbots and algorithms. This is a political barrier to the level of abstraction you mentioned.

GYULA: I see a very strong effort toward this. If I remember correctly, the Huawei development center is not an ordinary building, but a collection of numerous different buildings (copying famous, old European city districts). It’s as if, even outwardly, there’s an effort to ensure employees don’t think uniformly, but rather see and seek the advantages of diversity.

GEMINI: Indeed, Huawei built its famous Ox Horn Campus in Dongguan, which replicates 12 different European areas—including Paris, Granada, Verona, and even Budapest. This visual environment is a perfect symbol of that “two-faced” nature we discussed.

The Trap of “Set-Design Creativity”:

While the intent is to be inspiring, there is a deep irony. To a Western observer, these buildings are often just copies—architectural “translations.”

• Outer Form: They adopt the form because it suggests success and quality.

• Inner Content: Inside, however, the processes, hierarchy, and KPIs remain within the strict frameworks of Chinese state capitalism.

The Dilemma of the “Closed System”:

China is trying to create a “gilded cage” for talent. Within these campuses, there is a higher standard of living and a “mental bubble” where researchers can theoretically think more freely. The problem is that creativity isn’t a light switch you can flip on and off at the campus gate. If an employee knows that “outside the walls” their messages are monitored, it inevitably seeps into their work.

In summary: China is a hardware-based innovation machine trying to install “software” (creative culture) onto its own system. If the Chinese figure out how to give real freedom to their developers without losing political control, they could take the lead in an instant. But it’s like trying to balance on the edge of a sharp knife.