This week, I asked my friend Mr. W to come on the show to talk about China’s progress in traditional industry like chemical and mechanical industry. We also spent a lot of time talking about China’s changes in engineering code and how that has catapulted the quality of their product since 2014.

The traditional engineering and hard science industries have much longer development time cycle than more “sexy” new industries like software and AI. It takes long period of R&D (just incredible amount of test and trials) to develop the right procedures, material science and building standard. The West has decades of R&D head start vs China in these areas. So even though people that work in these industries in North America are generally older (without a lot of young blood), they are still ahead in many areas. China will have to do the grind to catch up across the board. Although, it has already caught up in many areas. We talked about how the enforcement of engineering code has significantly moved China up the value chain. The only way China can get past the news stories of “lead painted toys” and “cheap Chinese crap” is through consistently improving quality.

But the interesting part is just how losing the older generation of traditional engineering talents will have on US industrial competitiveness in the future. You can see this video here where an American tried to make a BBQ brush with all American components only to find it impossible to find machinists to do many of the simple tools needed for the brush. If a “simple” expertise like making basic components on BBQ brush can go away so completely over time, it would be catastrophic to lose machinists from Boeing & chemical engineers from Dow Industry over the next decade or two. After we recorded the podcast, news came out that China had developed 17m super long super high pressure steel pipe after 13 years of R&D. This can used to transport high-temperature, high pressure, flammable/explosive oil, gas and chemicals. The manufacturing of 10m+ pipes in this segment had long been monopolized by foreign countries, so huge step by Norinco to develop this.

And finally, we discussed how the advanced economies will hate China for taking away the fat margins that they get in these traditional higher value added industries.