Why China can’t win the AI-led industrial revolution

The People’s Republic was founded on the principle that the Communist Party of China “leads everything.” That remains true today: The CPC controls courts, markets, banks, universities, and the media, and even commands private firms. Under such powerful party-state rule, the regime can mobilize massive resources and produce shining stars like DeepSeek (or Sputnik, in the Soviet case). An industrial revolution, however, depends on more than isolated breakthroughs; there must be a series of disruptive innovations in technology, business models, and institutions that build on one another. The Soviet experience makes this clear. The USSR and its satellites in Eastern Europe could not keep up with the West during the third industrial revolution, and this failure eventually contributed to the collapse of their communist regimes.