Economist Says AI, Biotech and Robot Exports Could Trigger ‘China Shock 3.0’

The world is approaching what economist Alicia Garcia-Herrero has described as “China shock 3.0”, a new wave of Chinese exports driven by artificial intelligence (AI), biotechnology and robots. She said this third wave could have a stronger impact than the current wave.

Garcia-Herrero, a senior fellow at Brussels-based think tank Bruegel and chief economist for Asia-Pacific at investment bank Natixis, said the process has already begun. “We are already at the starting point of the China shock 3.0,” she told the South China Morning Post from Taipei.

Her remarks came after a virtual panel hosted by the Washington-based Peterson Institute for International Economics (PIIE) on Wednesday. The discussion focused on the possible direction of China’s next major export expansion and the advanced technology sectors likely to drive it.

According to Garcia-Herrero, the third wave would focus on artificial intelligence, including both AI hardware and software. Biotechnology and robotics would also be central to this new phase of Chinese exports.

This would mark a shift in the type of products expected to lead China’s next export push. The proposed wave would not be limited to products associated with the current phase. Instead, more advanced technology sectors would move clearly into the centre of China’s international export strategy.

An expert also claims that Beijing is developing its own AI hardware and software with the ability to compete. The claim covers both the hardware used for AI and the software that supports it.

According to this claim, China plans to export these products once domestic demand has been met. That would place AI hardware and software among the products expected to lead the next stage of China’s export expansion.

The same export push is expected to include biotechnology and robots. Together, these sectors could form the main pillars of what Garcia-Herrero calls “China shock 3.0”.

Her assessment is that the coming wave could hit harder than the current one. The expected impact would come from China’s growing ability to produce advanced technology products and make them available beyond its domestic market.

The focus on AI, biotechnology and robotics also means that China’s technology capabilities may become important not only inside the country but also in outside markets. If the products are exported after domestic demand is met, China’s technology manufacturing capacity could have a wider effect on international markets.

The description of “China shock 3.0” therefore refers to a possible third wave of Chinese exports, with advanced technology at its core. AI hardware, AI software, biotechnology and robots would all be part of this shift.

Garcia-Herrero’s comments present the development as an emerging trend rather than a distant possibility. Her statement that the world is already at the starting point of the new shock suggests that the process has begun, even as the broader export wave is still taking shape.

The comments were reported by the South China Morning Post after the PIIE virtual panel. Han Li reported from Washington, DC.