Making sense of the interaction between geopolitics and middle-technology trap: evidence from China’s catching-up CNC machine tool industry

Abstract

This study proposes a framework to analyze the interaction between geopolitics and the Middle-Technology Trap, drawing on evidence from China's CNC machine-tool industry. Qualitative methods such as interviews have been utilized to identify geopolitical variables that have driven the development of the Chinese CNC machine tools industry. To explore the combined effects of the Middle-Technology Trap and the intense competition between China and the West, this article focuses on an industry that has been significantly influenced by the economic decoupling between China and the US, a phenomenon deeply rooted in recent great power competition. While several industries may illustrate the new status quo of the Middle-Technology Trap, the CNC machine-tool industry is particularly exemplary due to its close interrelation with geopolitics. Accordingly, this study presents a catch-up case that incorporates technology-oriented aspects and factors from strategic competition, underlining three scenarios that geopolitics could influence the result of addresing the Middle-Technology Trap, respectively technological decoupling, the relocation of supply chain, and industrial policy.