US-China Tech Rivalry: Zheng Yongnian Says the Key is the Race for Talent in City Clusters
Scholar Zheng Yongnian highlighted that the US-China tech rivalry hinges on attracting talent to city clusters. He criticized China's 'involution' (toxic price wars), warning that internal resource wasting in sectors like EVs will only benefit competitors like Tesla.
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- 📰 Published: April 22, 2026 at 13:33
- 🔍 Collected: April 22, 2026 at 14:01 (28 min after Published)
- 🤖 AI Analyzed: April 22, 2026 at 14:34 (33 min after Collected)
(CNA Reporter Li Ya-wen, Shanghai, 22nd) Zheng Yongnian, Dean of the School of Public Policy at the Chinese University of Hong Kong, Shenzhen, stated that the crux of the US-China tech competition lies in city clusters racing for talent. China must create conditions to retain talent and foster innovation; 'involutionary' competition leads to redundant local construction and resource waste, resulting in no winners.
Shanghai Observer published an exclusive interview with Zheng Yongnian on the 22nd, where he discussed topics including the US-China tech rivalry, China's involutionary competition (excessive competition leading to declining overall benefits), and the development of the Shanghai (Yangtze River Delta) International Science and Technology Innovation Center.
Zheng expressed deep concern over the involutionary competition within China's industries. He explained that a large part of this competition stems from local governments adopting a 'if they do it, I must do it too' mentality. This results in redundant construction and wasted resources—when a hot topic emerges, everyone swarms in; once the hype fades, they scatter. The underlying cause is local governments competing for economic growth figures.
He used new energy vehicles (EVs) as an example. He noted that as price wars escalate, companies rely on low prices to grab market share, continuously compressing profit margins. The combined profits of the top ten auto manufacturers might not equal those of a single foreign competitor. There are no winners. "If new energy vehicles continue this involution, the ultimate winner will be Tesla."
He emphasized that in the tech and innovation sector, this logical mindset is highly dangerous. Technological innovation requires high investment, entails high risk, and demands long cycles. If various regions redundantly invest in highly homogenous tracks, it will not only waste resources but also dilute the truly promising forces of innovation.
Zheng urged that 'internal openness is more important than external openness.' He pointed out that China has a massive market, a complete industrial system, and abundant innovation resources. If internal barriers cannot be dismantled, it will cause immense institutional friction. Conversely, if internal elements flow freely and regions divide labor rationally, China itself can form a massive innovation loop and tech exchange market.
"The benefit of openness lies in forming a rational division of labor," Zheng said. However, this requires coordinating agencies and institutional innovation to clear away barriers to openness. The construction of the Shanghai (Yangtze River Delta) International Science and Technology Innovation Center, mentioned in the 15th Five-Year Plan (2026-2030), precisely requires this kind of institutional capability.
Zheng believes the key to the US-China tech rivalry will be the construction of city clusters. He stated that cities are the carriers of industry. Many founders of AI unicorn companies in Silicon Valley are first- or second-generation immigrants, including those who left China. He joked that the US-China semiconductor competition is, to some extent, a competition between 'Zhejiang people who wandered to the US' and China's domestic chip industry.
Zheng emphasized that China does not lack innovation capabilities; the core issue is how to ground innovation domestically and how to retain talent. This is exactly one of the questions the Shanghai (Yangtze River Delta) International Science and Technology Innovation Center must answer. The position of the Yangtze River Delta's tech and innovation level within the global mega-city cluster landscape will, to some extent, influence China's position in global competition.
Shanghai Observer published an exclusive interview with Zheng Yongnian on the 22nd, where he discussed topics including the US-China tech rivalry, China's involutionary competition (excessive competition leading to declining overall benefits), and the development of the Shanghai (Yangtze River Delta) International Science and Technology Innovation Center.
Zheng expressed deep concern over the involutionary competition within China's industries. He explained that a large part of this competition stems from local governments adopting a 'if they do it, I must do it too' mentality. This results in redundant construction and wasted resources—when a hot topic emerges, everyone swarms in; once the hype fades, they scatter. The underlying cause is local governments competing for economic growth figures.
He used new energy vehicles (EVs) as an example. He noted that as price wars escalate, companies rely on low prices to grab market share, continuously compressing profit margins. The combined profits of the top ten auto manufacturers might not equal those of a single foreign competitor. There are no winners. "If new energy vehicles continue this involution, the ultimate winner will be Tesla."
He emphasized that in the tech and innovation sector, this logical mindset is highly dangerous. Technological innovation requires high investment, entails high risk, and demands long cycles. If various regions redundantly invest in highly homogenous tracks, it will not only waste resources but also dilute the truly promising forces of innovation.
Zheng urged that 'internal openness is more important than external openness.' He pointed out that China has a massive market, a complete industrial system, and abundant innovation resources. If internal barriers cannot be dismantled, it will cause immense institutional friction. Conversely, if internal elements flow freely and regions divide labor rationally, China itself can form a massive innovation loop and tech exchange market.
"The benefit of openness lies in forming a rational division of labor," Zheng said. However, this requires coordinating agencies and institutional innovation to clear away barriers to openness. The construction of the Shanghai (Yangtze River Delta) International Science and Technology Innovation Center, mentioned in the 15th Five-Year Plan (2026-2030), precisely requires this kind of institutional capability.
Zheng believes the key to the US-China tech rivalry will be the construction of city clusters. He stated that cities are the carriers of industry. Many founders of AI unicorn companies in Silicon Valley are first- or second-generation immigrants, including those who left China. He joked that the US-China semiconductor competition is, to some extent, a competition between 'Zhejiang people who wandered to the US' and China's domestic chip industry.
Zheng emphasized that China does not lack innovation capabilities; the core issue is how to ground innovation domestically and how to retain talent. This is exactly one of the questions the Shanghai (Yangtze River Delta) International Science and Technology Innovation Center must answer. The position of the Yangtze River Delta's tech and innovation level within the global mega-city cluster landscape will, to some extent, influence China's position in global competition.