AI Agents Undercut China's Advantage

Rapid deployment of AI agents — cheap, composable, and widely distributed automation — makes technological catch‑up easier for rivals and narrows the payoff from capital‑intensive, state‑led industrial policy. That shift means China’s previous path to geopolitical leverage (scale + state investment in heavy industry and chips) may not deliver the same strategic returns it once did. — If true, this reframes how policymakers should think about industrial subsidies, export controls, and geopolitical competition: technology diffusion could blunt traditional levers of state power.