Last week, a colossal high-tech trade fair in central China buzzed with Russian officials, business leaders, and media. The only American presence, however, was merely the disembodied voice of Elon Musk, echoing from a Tesla video promoting ‘humanoid robots.’ This extravagant event, the fourth Global Digital Trade Expo in Hangzhou, showcased a dazzling array of Chinese innovations. Visitors observed robots engaging in a boxing match, along with other specialized machines like toilet-cleaning bots and emotional support robots for seniors. The fair also featured automated police vans, a self-driving yacht, and products from over 100 Chinese electric vehicle brands locked in fierce competition. Tesla’s booth, for example, highlighted its Cybertruck, a tank-like vehicle that remains unapproved for sale in China. Despite Tesla cars being available, their sales have sharply declined due to overwhelming competition from Chinese brands offering superior technology and significantly lower prices, with only a few managing to turn a profit.
This immense exhibition, sprawling across an area larger than 21 football fields, proudly displayed China’s triumph in transforming its manufacturing sector. Once reliant on inexpensive labor, the nation has evolved into an economic powerhouse driven by innovation and a commanding grasp of advanced technologies, areas traditionally dominated by the United States. However, with global trade tensions on the rise and concerns mounting in nations worldwide over the influx of Chinese exports, the expo inadvertently highlighted critical questions: Who will ultimately purchase this enormous volume of products? And, perhaps more importantly, can the companies behind these innovations achieve sustainable profitability?
Opening the digital expo, senior Chinese officials alongside Russian Deputy Prime Minister Dmitry Grigorenko called for greater global collaboration. Their remarks subtly criticized the fluctuating efforts of the Trump administration to restrict China’s access to cutting-edge artificial intelligence chips and impede its emergence as a high-tech superpower. Wang Hao, the Communist Party leader for Zhejiang Province, where Hangzhou is located, proudly stated that the digital economy now contributes over 50 percent of his province’s total output. Zhejiang, historically known for its tea and silkworms, has undergone a remarkable transformation. He emphasized China’s desire to ‘collaborate with all partners to explore the vast potential of digital trade and forge a new era of mutually beneficial cooperation.’
President Trump, however, has often viewed such ‘cooperation’ differently, famously stating in April that China ‘has ripped us off and left us for dead.’ Amidst this debate, a salesman at the expo, promoting urinal-cleaning robots (like the one observed efficiently sanitizing a toilet), argued that such perspectives overlook universal benefits. ‘Nobody likes cleaning toilets,’ he reasoned, posing the question: What’s wrong with allowing Chinese robots to ‘do the dirty work’ for everyone’s benefit? His company, Hangzhou Star Species Robotics, has primarily served the domestic market, providing robots to clean public restrooms in Chinese railway stations and other facilities. Yet, he expressed strong aspirations to expand into international markets.
Without explicitly naming President Trump, the expo organizers made it clear they wanted to demonstrate the futility of American attempts to isolate China. A press statement proudly announced an attendance of 11,000 international buyers, a 64 percent increase from the previous year, underscoring the event’s growing global influence. A Foreign Ministry-organized tour for foreign journalists through high-tech companies in the Yangtze River Delta echoed this sentiment: regardless of the Trump administration’s efforts to curb China’s progress or the economic challenges it faces, the nation’s advancements in AI, robotics, and other digital sectors continue at an accelerated pace.
Kong Fuan, the Communist Party secretary at Shanghai’s Hongqiao Overseas Development Service Center, a government body dedicated to attracting foreign investment and talent while helping Chinese firms expand globally, confidently stated, ‘If you get blocked, you can always find another way around.’ He contrasted this with the U.S. approach, noting that while America makes it increasingly difficult and costly for companies to recruit foreign workers, China ‘always opens its hands to talent from all over the world.’ To further this goal, China is rolling out a new visa category aimed at simplifying travel and business opportunities for STEM graduates from leading global universities.
The city of Hefei, once a quiet backwater west of Shanghai, has blossomed into a high-tech center, largely due to companies like iFlyTek. This AI powerhouse serves as a stark counterpoint to Mr. Trump’s China policies. Despite being placed on a U.S. blacklist in 2019, alongside 27 other Chinese companies, over human rights concerns—a move that restricted its access to American products—iFlyTek’s ambitions remained undeterred. Since then, the company has expanded into an impressively futuristic and expansive new office campus. From its new, strikingly modern headquarters, iFlyTek has developed innovative products such as a device for grading school exams and an AI chatbot capable of answering questions in multiple languages, including Chinese, English, and Russian. When prompted about the invasion of Ukraine, the chatbot responded by citing Russian security concerns, but also noted that President Vladimir V. Putin had disseminated false propaganda and used the conflict to distract from Russia’s ‘stagnating economy.’
Cheng Chen, general manager of iFlyTek’s consumer business group for AI translation, clarified the purpose of their exam grading machine. She explained that it’s not designed to replace teachers, but rather to ‘help them use their time better on more creative, essential things,’ by automating the grading process. She asserted that intermittent U.S. restrictions on exporting advanced American-made AI chips to China, which she acknowledged were ‘the best for training large language models,’ had not harmed iFlyTek. Instead, she claimed, Chinese giant Huawei was supplying satisfactory alternatives. With state-owned China Mobile as its primary shareholder, iFlyTek’s share price has more than doubled since the imposition of Trump-era sanctions. Recent U.S.-China trade disputes have had minimal effect on its market valuation. Further solidifying the narrative of China’s self-sufficiency, reports last week indicated that the nation had prohibited its major technology firms from purchasing advanced AI chips from American supplier Nvidia.
This pursuit of technological independence is a fundamental tenet of Chinese state policy under President Xi Jinping. In recent years, Mr. Xi has frequently championed ‘self-reliance,’ reviving the Mao Zedong-era phrase ‘zili gengsheng.’ While Mao used it to advocate a catastrophic economic autarky that isolated China and impoverished its populace, Xi’s modern interpretation is different. President Xi’s contemporary vision of self-reliance doesn’t seek China’s isolation. Instead, it aims to guarantee the Party’s control over any foreign element that might impinge on national sovereignty. For high-tech innovation, he explained to a Politburo meeting in April, this translates into establishing an ‘autonomously controllable’ ecosystem of AI hardware and software.
Despite the impressive display of Chinese-made gadgets and gizmos in Hangzhou, showcasing the nation’s advanced technological mastery, there are clear limitations to how far China can truly go it alone. This reality was underscored by the palpable desire for international sales evident among many of the high-tech companies promoting their products. China’s burgeoning trade surpluses, which last year contributed up to half of its economic growth, have been crucial in mitigating the prolonged impact of a property market downturn. Trade between China and the United States has plummeted since Mr. Trump assumed office this year, largely due to tariff uncertainties. Nevertheless, China’s overall trade surplus is projected to surpass last year’s staggering nearly $1 trillion imbalance.
However, the question of whether China can truly thrive without the most advanced American AI chips remains contentious. At the Hangzhou expo, Chen Jiaxin, a marketing manager for Unitree Robotics, enthusiastically discussed her company’s advancements in creating human-like robots that can dance and box. Yet, she politely declined to answer any questions regarding the impact of U.S. export restrictions on chips or broader trade frictions, simply stating, ‘It is not convenient to answer.’ A clearer picture might come from DeepSeek, a relatively small Chinese start-up that, last year, astonished Silicon Valley. They unveiled a new AI system that, utilizing Nvidia chips, achieved capabilities comparable to chatbots developed at significantly higher costs by industry giants such as OpenAI and Google. Interestingly, DeepSeek’s booth at the Hangzhou digital expo remained unmanned. Perhaps cautious about addressing sensitive inquiries regarding a potential delay in their new AI model’s summer release, possibly due to issues with Chinese-made substitute chips, the company merely displayed a poster of its logo, offering no further details.