Google Former CEO: From DeepSeek to Temu and TikTok, China Tech Surges Despite Constraints

Former Google CEO Eric Schmidt recently sounded the alarm in The New York Times: China is not just catching up in artificial intelligence and technology innovation, it is, in some areas, pulling ahead. Despite US efforts to curb China’s progress through export controls on advanced AI chips, Schmidt argues these moves have only fuelled China’s determination to cultivate talent, build resilient supply chains, and accelerate homegrown innovation.

Schmidt points to a new era: “From DeepSeek to Temu to TikTok, Chinese tech is starting to pull ahead.” The era when China trailed far behind the US is over. American restrictions have, paradoxically, pushed China to double down, producing world-class products and, at times, even leapfrogging the West.

Google Former CEO Eric Schmidt argues in a commentary that China is rapidly catching up to the United States in artificial intelligence and technological innovation. (Image source: X)

A Changed Landscape: From Copycat to Contender

Schmidt’s commentary highlights how technological advances are transforming daily life in China. Electric vehicles speed through city streets; apps offer drone food delivery; and humanoid robots from Unitree Technology have become household names after performing on the Spring Festival Gala, China’s most-watched TV program. These shifts underscore China’s emergence as a peer-and sometimes a leader in fields like AI, robotics, and electric vehicles.

Humanoid robots from Unitree Technology became an overnight sensation after performing a dance and handkerchief-spinning routine on the stage of the Spring Festival Gala.

Schmidt notes, “To win the race for the future of technology, and, by extension, global leadership, the US must discard the belief that it is always ahead.” For years, China lagged behind. In 2007, when Steve Jobs unveiled the first iPhone, only about 10% of China’s population was online, and Alibaba was still years away from its New York IPO. But the pace of change has been staggering. In just over a decade, China has transformed from imitator to innovator, with products that sometimes outpace their Western counterparts.

AI: From Playing Catch-Up to Setting the Pace

When ChatGPT launched in late 2022, a wave of Chinese copycats followed, widely seen as years behind their American rivals. Yet, as with smartphones and EVs, Silicon Valley underestimated China’s capacity to rapidly develop affordable, state-of-the-art alternatives. Today, Chinese AI models are closing the gap. DeepSeek’s V3 large language model, updated in March, now ranks among the world’s best non-reasoning models on some benchmarks.

Schmidt observes, “In a dozen years, China has gone from a copycat nation to a juggernaut with world-class products that have at times leapfrogged those in the West.”

Manufacturing, Robots, and Open AI

Schmidt cites Xiaomi as a case in point: once dismissed as an iPhone copycat, the company delivered 135,000 electric vehicles last year. Meanwhile, Apple abandoned its own EV project after pouring in $10 billion over a decade. China is also racing to deploy robots at scale. In 2023, it installed more industrial robots than all other countries combined and has ambitious plans for mass-producing humanoids.

A key difference is openness. Leading US tech firms develop proprietary AI models and charge for access, partly because training these models costs hundreds of millions of dollars. Chinese AI companies, by contrast, often distribute their models freely for public use, download, and modification. This approach broadens their global influence and makes their technology more accessible to researchers and developers everywhere.

Schmidt’s New York Times op-ed headlined: “DeepSeek. Temu. TikTok. China Tech Is Starting to Pull Ahead.”

The Roots of China’s Tech Momentum

China’s rise is underpinned by decades of investment in STEM education, robust supply chains, and a brutally competitive domestic market that rewards relentless iteration. Apps from Chinese e-commerce giants like Shein and Temu, along with social platforms like RedNote and TikTok, are among the world’s most downloaded. Combined with the popularity of open-source Chinese AI models, it’s easy to envision a future where Chinese apps and AI companions are woven into the fabric of daily life worldwide.

Schmidt warns, “This China-dominated future is already arriving, unless we get our act together.” He urges the US to learn from China’s strengths: sharing more AI technology and research, accelerating innovation, and promoting AI adoption across the economy. He also cautions against underestimating China’s willingness to endure short-term economic pain for long-term technological supremacy.

Sanctions: Fuel for Innovation?

Despite US restrictions on advanced chip exports, China’s recent breakthroughs suggest that sanctions have only spurred local entrepreneurs to train and commercialize AI with renewed vigor. Schmidt concedes, “It’s a hard truth to swallow, but Chinese tech has become better despite constraints, as Chinese entrepreneurs have found creative ways to do more with less.”

The End of US Tech Dominance?

Schmidt closes with a stark warning: “We’re no longer in the era when China is far behind us.” If China’s ability to innovate holds, if its AI companies remain open, and if the country stays on track to claim 45% of global manufacturing by 2030, the next phase of the AI race will be a no-holds-barred contest across every front. America will need every advantage it can muster.

Deep Throat

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Following China's strict export controls on dual-use items including gallium, germanium, antimony, and graphite targeting the United States last year, Beijing in April introduced additional export restrictions on seven categories of medium and heavy rare earth elements.

According to foreign media reports, China is establishing a rare earth export licensing system to comprehensively track production chains, further tightening control over rare earth resources. We're seeing that Beijing flexibly wields economic leverage in ways that would make any trade strategist take notes.

Beijing Tightens the Screws on Critical Materials

Nikkei Asia reported that as rare earth stockpiles are on the verge of depletion, India's automotive manufacturing industry faces enormous pressure, with concerns about production lines grinding to a halt. An Indian industry executive stated that supplier inventories typically last only 3 to 6 weeks, and shortages will soon emerge. He pointed out that China's export license requirements involve complex paperwork and lengthy approval processes. Indian importers must first obtain approval from their own country's Directorate General of Foreign Trade, then submit applications through India's Ministry of External Affairs to the Chinese Embassy in New Delhi, with final approval from China's Ministry of Commerce. Currently, more than 20 applications are still awaiting approval.

Another executive revealed that the Indian government is actively responding to the industry's urgent needs, with the Ministry of Commerce, Ministry of Heavy Industries, and Ministry of External Affairs all intervening, while the Prime Minister's Office is closely monitoring the situation. The Indian Embassy in Beijing is arranging for a delegation of Indian automotive and parts manufacturers to meet with China's Ministry of Commerce, though specific dates have not yet been determined.

Indian Tata Motors. AP file photo

India's Auto Sector Feels the Pinch

India is the world's fourth largest automotive producer. However, it is highly dependent on rare earth and component imports from China. The South China Morning Post noted that India's electric vehicle sales exceeded 1.9 million in number last year, accounting for 3.6% of total domestic vehicle sales, but almost all models rely on components imported from China. In 2024 alone, India imported approximately $7 billion worth of electric vehicle batteries and magnets from China. Although India possesses 6.9 million tonnes of rare earth reserves, its extraction and processing capabilities lag far behind China's advanced refining facilities and efficient supply chains.

The Uncomfortable Reality of Chinese Dependence

Mehra, partner and automotive sector head at market research firm Grant Thornton Bharat, stated that China's rare earth export restrictions have caused delays in India's electric vehicle production, rising costs, and slowed technological development. In 2023, China processed over 200,000 tonnes of rare earths, while India processed only 10,000 tonnes, highlighting the technological gap. Analysts warn that without accelerating autonomous transformation, India may fall behind in the clean energy competition.

Regarding rare earth export controls, at a regular press conference held on June 5, Chinese Foreign Ministry spokesperson Lin Jian stated that China's export control measures comply with international common practices, are non-discriminatory, and do not target specific countries.

A New Normal in Global Trade?

In short, China's rare earth controls affect more than just India. As British media noted, China has introduced a tracking system for the rare earth magnet industry, requiring manufacturers to submit transaction volumes and customer information, indicating that export controls may become a long-term policy aimed at strengthening industry supervision and cracking down on illegal activities. This isn't just about short-term leverage—it's about fundamentally reshaping how global supply chains operate in an era where economic security has become inseparable from national security.