As the Trump administration busies itself with propping up legacy industries, China is pursuing a Five-Year Plan that would transform it from a manufacturing powerhouse into an innovation leader. Will Silicon Valley someday play second fiddle to Shenzhen?
In this Big Picture, Simon Johnson doesn't rule out that possibility, given that Trump's protectionist, anti-immigration agenda could undercut the US tech industry's competitiveness. Likewise, Edmund S. Phelps notes that the Chinese are realizing the value of competition-driven innovation just when Americans seem to have forgotten it.
But Kenneth Rogoff counters that advances in automation and artificial intelligence will pose even greater political challenges to China than to the US, owing to China’s much larger population. And Laura Tyson reminds US policymakers that they could still adopt a pro-innovation industrial policy of their own, while working alongside allies to keep China honest on trade and intellectual property.