The European competition model and China's "farming style"
Jared Diamond's book used three symbols — guns, germs, and steel — to explain Europe's global dominance. At its core is a geographic-determinist reading, revealing how Europe shaped the modern power order through a logic of "violence — parasitism — technological gap."
By contrast, China was the first to invent gunpowder and steel-making, yet used them for different ends. Gunpowder mostly lit festival fireworks; steel was cast into farm tools rather than weapons. This reflects two very different civilizational operating logics. Europe behaved like an "adventure-game player," leveling up by grabbing new gear. China behaved like a "farming-style player," filling the map with canals and logistics networks.
Zheng He's fleets carried porcelain and agricultural manuals; the Spanish fleets carried muskets and Bibles. The contrast marks the fork in the road — one side sought trade and cooperation, the other sought to seize resources. China achieved internal equilibrium through hydraulic engineering and bureaucratic control, developing an inward-facing civilization of stability. Europe achieved outward resource extraction through technological violence, developing an outward-facing civilization of acquisition.
The inner core and material base of Chinese civilization
Chinese civilization can be read on two levels: the "meaning core" and the "material base." The meaning core is Confucian ethics, which builds a moral coordinate system through benevolence, righteousness, propriety, wisdom, trustworthiness, and the Mean, and extends horizontally from the individual to the nation through "cultivating the self, regulating the family, governing the state, and bringing peace to all under Heaven." This differs from Europe's vertical relationship between the individual and God.
Civilizational resilience is achieved through tools such as Chinese characters and historiography. Alien cultures are absorbed into the Chinese system, producing a fusion-and-transformation mode of "great capacity through tolerance," rather than Europe's conquest-and-conversion.
The material base begins with hydraulic technology. Dujiangyan turned Chengdu into a "land of abundance." The Grand Canal connected the north-south flow of goods. But water control is not just economic engineering — it is also a symbol of political legitimacy and a cultural belief: the state should be able to carry out great works "that benefit the present and last a thousand years."
Confucian ethics provided moral legitimacy for centralized rule; the state-run economy supported bureaucratic operations; the isomorphism of family and state maintained political stability; intensive agriculture avoided the Malthusian trap; cultural acculturation dissolved external shocks. Hydraulic engineering lowered the risk of system collapse triggered by environmental disruption.
Chinese civilization has run for thousands of years without a break. Its self-contained cultural suppleness defuses social tensions; its material rigidity holds the floor of development. Compared with Europe's one-directional, breakthrough toolkit, the Chinese system looks more like a self-repairing ecological terrarium — hard to break outward, hard to disintegrate from within.
Even so, "guns, germs, and steel" retained enormous destructive power during the early phase of modern globalization. Chinese civilization has run for five thousand years; Spain's global hegemony lasted only two hundred. That suggests the ultimate test of civilizational competitiveness is the balance between "meaning" and "force." Europe's strength lay in "breaking through geographic boundaries." China's strength lay in "erasing discontinuities in time."
The evolution of civilizations and the new contest
During the Industrial Revolution, Britain built a technological gap through the steam engine. In the twenty-first century, technological hegemony has evolved into absolute control over core industrial chains. Through sanctions lists the United States attacks semiconductors, AI, and other critical domains; restricting 0.03% of key components can be enough to paralyze China's chip R&D.
Today's "guns" are a composite military-financial-digital hegemony. The U.S. maintains more than 700 overseas military bases, dominates the SWIFT financial system, controls more than 90% of global search and social-network traffic, and sets the rules for AGI research.
Today's "germs" are manipulation of biological, narrative, and climate risk. The U.S. holds a monopoly on mRNA vaccine patents, steers information flow through social media, and in doing so exercises a kind of biotech hegemony.
Today's "steel" is the closed loop of technology, education, and supply chain — lithography machines and high-end chips, the gravitational pull of higher education, governance of global supply chains.
China's new competitiveness model
Building on this reading of competition, I propose a three-in-one system: steel, digital, and ecosystem. Behind Tesla's Shanghai plant lies a deep coupling of infrastructure and supply chain: the Yangtze River Delta's "four-hour industrial circle" sources 95% of parts within a 300-kilometer radius, and logistics costs are roughly one-quarter those of the Ruhr. SHEIN crawls fashion data in real time; a new item moves from design to shelf in seven days.
China shows strength in AI applications. Hangzhou optimizes traffic in real time through 100,000 road sensors; Shenzhen Customs' intelligent image-review system lets a CT scanner process a container in one second. DeepSeek's legal large model, trained on 210 million court rulings, reaches 91.7% accuracy on specific subtasks. Huawei's Pangu weather model has cut average typhoon forecast error by 20%.
China has a huge population base, vast geography, a full range of manufacturing categories, and a complete supply chain. Huaqiangbei's hardware ecosystem can source 80% of the parts for a smartphone within three hours; a smartwatch prototype can be built for 20,000 yuan. DJI started in Huaqiangbei and within ten years had taken 70% of the global consumer drone market.
Huawei's HarmonyOS ecosystem differs from Android's standardization. Its distributed architecture adapts to cars, appliances, IoT devices, and even smart cities. 700 million terminals in China already run it, forming a "hardware + OS + services" closed loop.
On infrastructure: China consumes 60% of the world's cement and 50% of its crude steel, and has built 70% of the world's ultra-high-voltage grid and 65% of its high-speed rail mileage. Chinese PV module costs have fallen 75% over the past decade; Ningxia's "PV — data center" direct-power model drives the carbon intensity of compute down to about half the U.S. average.
In the AI era, "steel" has moved from physical infrastructure into a "silicon-carbon symbiotic base." China will build 100 new intelligent computing centers by 2025, each with compute of more than 1000P. The ecosystem expands from supply chain to a super-loop of "data, talent, capital." Roughly 40% of the world's top AI scholars are ethnic Chinese, and Chinese universities graduate 500,000 AI-related students each year.
The digital dimension has moved beyond tool and become a "civilizational operating system." AI empowerment upgrades social governance and restructures industry, turning the digital layer from a "connector" into a "creator."
From an agrarian civilization to a modern one
For China to complete the leap from agrarian civilization to modern civilization, it still has to work through several core tensions:
First, the tension between technological self-reliance and global dependence. Localization rates remain low for high-end equipment and semiconductor manufacturing tools; large-model training relies on globally sourced open data, and high-quality Chinese-language corpora account for only 5% of the global pool.
Second, the imbalance between efficiency-first and inclusive development. Intelligent-tech development can widen regional and urban-rural divides, and the ecological costs of industrialization meet resource constraints during the green transition.
Third, the friction between institutional rigidity and innovation elasticity. Legal responsibility for AI-generated content is still unclear, and blockchain-era financial innovation has yet to find balance with risk control. Sixty percent of R&D funding flows to state-owned enterprises, but 70% of disruptive innovation comes from the private sector.
Fourth, the contest between civilizational agency and the globalization narrative. International standard-setting is still dominated by Western bodies like the IEEE; TikTok's overseas revenue is only 20% of ByteDance's total, and values exports have not yet been monetized.
Fifth, building a pluralist, co-governed ecosystem of social governance. Government needs to shift from "all-purpose manager" to "ecosystem collaborator," and social governance needs to move from a control mode to an ecosystem mode.
Sixth, the modern expression of traditional Chinese culture. "Harmony between humanity and nature" needs to be woven into dual-carbon policy, and "harmony without uniformity" used to re-engineer the spatial rules of globalization.
Whether the agrarian civilization's "wisdom of water governance" can merge with the digital era's "systems thinking" will decide whether China can find a new civilizational path that moves beyond the logic of "predation and confrontation," with development logic that flows from the inside out. Eco-logic is China's civilizational code; "steel, digital, and ecosystem" translates the philosophy of agrarian civilization into the system-coupling capacity of industrial civilization.
Originally published: Economic Observer · Microscope · 2025-03-30 · Read original →
Originally published in the "Economic Observer · The Walker’s View" column. The author is Executive President of the Guangdong SME Development Promotion Association. For reprints or citations, please contact the author or the Association Secretariat.