I. Reframing the “Great Divergence”: Not Race or Values, but Cost-Efficient Violence and Industrial Power
1. The Foundations of the Great Divergence: Power, Production, and Coercion
The historical “Great Divergence” between the Global North and the Global South was not enabled by racial superiority, cultural refinement, or the intrinsic legitimacy of Western values. Rather, it was driven by the emergence of industrialized violence and the systematic expansion of coercive capacity. Advances in industrial production allowed certain states to generate, equip, and sustain armed forces at unprecedented scale, fundamentally altering the balance of power between regions. The decisive advantage lay not in ideas alone, but in the ability to convert economic output into organized force.
This dynamic was reinforced by cost efficiencies in force projection. Industrialization reduced the relative expense of deploying violence across vast distances, enabling sustained military, naval, and colonial operations. As Samuel P. Huntington argued in The Clash of Civilizations and the Remaking of World Order (1996), Western dominance did not stem primarily from the universal appeal of democracy, individualism, or human rights. Instead, it rested on superiority in the organization, discipline, and application of force. The capacity to mass-produce coercive power—and to apply it effectively—was the critical enabler of global asymmetry.
Seen in this light, the Great Divergence emerges less as a moral or cultural triumph than as a structural outcome of industrial and military transformation. The decisive factor was the ability to harness production for violence and to project that violence efficiently. This material foundation, rather than ideological persuasion, explains how a small group of states achieved and sustained global dominance.
2. Industrialization and the Multiplication of Coercive Power
Industrialization functioned as a powerful multiplier of violence, transforming the scale, efficiency, and sustainability of coercive force. From the Age of Exploration onward—and with far greater intensity during the Industrial Revolution—advances in firearms, naval technology, and logistics systems enabled states to organize and project violence with unprecedented reach. These developments produced economies of scale not only in production, but in killing, surveillance, and control, fundamentally reshaping the global balance of power.
This technological and organizational shift created a durable structural advantage in colonization, resource extraction, and suppression of resistance. The dominance of the Global North rested less on the universal appeal of its moral or institutional frameworks than on a political economy that combined cheap, industrialized violence with expensive monopoly rents. Industrial capacity allowed coercion to be applied at low marginal cost, while control over trade routes, resources, and markets generated outsized returns. In this sense, industrialization did not merely support expansion—it made sustained global domination materially feasible.
II. China’s Rise as a Global Price Shock Rather Than a Rule-Making Project
China’s contemporary ascent represents a historically distinct form of global intervention. Unlike earlier hegemonic powers, China does not primarily seek to export a universal ideology, political system, or institutional model. Its influence is instead exercised through the large-scale transformation of global cost structures, particularly by compressing marginal costs across multiple foundational economic domains. The result is not a reordering of global rules, but a reconfiguration of global prices.
This dynamic is best understood as a relative price revolution rather than a civilizational or ideological challenge. By dramatically lowering production, infrastructure, and coordination costs, China alters competitive baselines for states and firms worldwide. In this sense, the trajectory is not a story of China replacing the West as rule-maker, but of reshaping the material conditions under which all actors operate. The primary impact lies in systemic cost compression, which reverberates through global supply chains and power relations without requiring institutional conversion or normative alignment.
III. The Five Pillars of China’s Global Price Revolution
1. A Productivity Shock That Rewrote the Terms of Trade
The contemporary productivity revolution has made manufactured goods cheap enough to fundamentally restructure global trade. A simple comparison illustrates the shift: in 1998, the value of a single mobile phone roughly equaled forty barrels of crude oil, whereas by 2025 that ratio had collapsed to approximately one or two barrels—a relative price decline on the order of twenty to thirty times. This dramatic compression reflects sustained gains in manufacturing productivity, scale, and supply-chain efficiency rather than temporary market fluctuations.
The consequences are structurally significant. Resource-exporting economies in the Global South can now exchange the same quantities of raw materials for vastly greater volumes of finished goods, raising living standards without requiring wholesale institutional reform or external conditionality. At the same time, China’s growth becomes less dependent on Western consumer markets, as lower production costs expand demand across a wider set of global buyers. This transformation is best understood as price-driven development: material welfare improves not through aid or governance mandates, but through a rebalancing of relative prices that alters incentives, trade flows, and economic leverage worldwide.
2. A Transportation Capacity Breakthrough Beyond Failing Infrastructure
A quiet transportation capacity revolution is emerging in contexts where conventional infrastructure has repeatedly failed. In many developing countries, railways and highways underperform or collapse under the weight of weak governance, corruption, and social fragmentation, turning large-scale infrastructure into a chronic bottleneck rather than a catalyst for development. These failures raise the cost of internal trade, limit state reach, and undermine the returns on industrial or agricultural productivity gains.
China’s response points to an alternative pathway: low-altitude logistics built around cargo and personnel drones. This model requires only minimal fixed infrastructure—primarily electricity, digital coordination, and landing or charging stations—while bypassing roads, customs choke points, and institutional frictions altogether. By decoupling transportation capacity from legacy infrastructure and governance constraints, low-altitude logistics can deliver outsized developmental gains. The result is a paradoxical outcome: the economic and social upside of this logistics revolution may be greater in the Global South than in China itself, where traditional infrastructure is already dense.
3. Distributed Power as an Alternative to Grid-Centered Development
An electricity revolution is unfolding that challenges the traditional reliance on centralized grids, particularly in regions where such systems have repeatedly failed. In many developing economies, grid expansion is constrained by weak institutions, state monopolies, and entrenched rent-seeking, leaving large populations without reliable power. These structural limits have long tied electrification to governance capacity, slowing development despite technological demand.
China’s advantage lies in the rapid collapse of costs across photovoltaics, wind power, and energy storage, combined with the deployment of modular off-grid and microgrid systems. Through Belt and Road–linked exports, clean and reliable electricity can now be delivered to regions lacking national grids, reducing dependence on centralized utilities and political gatekeepers. Energy thus becomes a deployable product rather than a long-term governance achievement. In this model, electricity functions as developmental infrastructure that no longer requires institutional prerequisites, unlocking productivity and welfare gains in environments previously excluded from grid-based modernization.
4. Open-Source AI and the Equalization of Cognitive Power
A computing power revolution is underway in which artificial intelligence functions as a tool of cognitive equalization rather than centralized dominance. At present, global AI capacity is heavily concentrated: the United States and China lead model development and deployment, Europe is constrained by regulatory overreach, and roughly 90 percent of public cloud infrastructure remains controlled by U.S.-based firms. This structure reinforces dependence through proprietary systems, data extraction, dollar-denominated billing, and opaque “black-box” models—a pattern increasingly described as cloud colonialism.
China’s emerging alternative shifts the axis of power away from centralized cloud control toward open, locally deployable intelligence. Open-source, low-cost model families such as the Qwen series are designed to run on modest hardware, optimized for edge computing and weak infrastructure. Their deliberate emphasis on multilingual fine-tuning—across languages such as Arabic, Swahili, Indonesian, and Hausa—extends high-level cognitive tools beyond elite, English-speaking environments. This lowers barriers to entry not only for firms and governments, but for individuals and communities historically excluded from advanced decision-support systems.
The broader impact is structural rather than ideological. When intelligence becomes cheap, local, and adaptable, governance capacity depends less on imported norms and more on the practical combination of information and execution. Access to AI-enabled reasoning, planning, and coordination no longer requires elite education or integration into Western cloud ecosystems. In this sense, open-source AI does not merely diffuse technology—it rebalances cognitive power by severing the link between advanced computation and centralized institutional control.
5. The Firepower Shift and the Economics of Precision Violence
A firepower revolution is underway, defined not by the disappearance of military strength but by the collapse in the cost of precision violence. Historically, military hierarchies were stabilized by high-cost weapons systems that conferred monopoly advantages on states able to afford them. Expensive platforms—strategic aircraft, large naval assets, and advanced missile systems—reinforced durable power asymmetries by pricing most actors out of effective competition.
That cost structure is now eroding. Drones, loitering munitions, and hypersonic delivery systems increasingly achieve performance levels comparable to legacy Western platforms at a fraction of the cost—often in the range of one to ten percent. Illustratively, a single advanced U.S. drone may cost on the order of tens of millions of dollars, while the interceptor required to neutralize it can cost only tens or hundreds of thousands. Similarly, hypersonic missiles capable of Mach 5–7 speeds and long-range strike are reported to be produced at costs measured in hundreds of thousands of dollars rather than tens of millions. The result is not absolute parity, but economically decisive asymmetry.
The strategic consequence is economic attrition rather than conventional military decline. High-cost platforms face persistent pressure from low-cost denial systems that invert traditional cost-exchange ratios. Power is no longer determined solely by technological sophistication, but by the ability to sustain conflict under unfavorable economics. In this emerging environment, precision violence becomes cheaper, more widely accessible, and structurally destabilizing for force postures built on expensive dominance rather than resilient cost efficiency.
IV. Rules, Not Technology: The INF Treaty and Missile Imbalance in Asia
The Intermediate-Range Nuclear Forces (INF) Treaty created a lasting structural missile asymmetry in Asia by design rather than by accident. Signed during the Cold War, the agreement prohibited the United States and the Soviet Union from developing or deploying land-based missiles with ranges between 500 and 5,500 kilometers. Crucially, the treaty applied only to its signatories and imposed no constraints on China, which was not a party to the agreement.
The strategic outcome was predictable over time. While the United States voluntarily constrained an entire class of land-based missiles for decades, China built a comprehensive missile force precisely within the INF-prohibited range. This enabled credible threats to regional targets such as Guam, Okinawa, and forward-deployed U.S. bases across the Western Pacific. The resulting imbalance was not driven by superior technology, but by asymmetric rule obligations. This rules-based disparity became one of the central reasons the United States ultimately withdrew from the INF Treaty in 2019, underscoring how legal frameworks can shape power distributions as decisively as weapons themselves.
V. From Heavy Institutions to Light Infrastructure: An Alternative Development Path
Conventional Western development theory has long assumed that industrialization depends on the prior establishment of “heavy” institutions: rule of law, strong bureaucracies, secure property rights, and extensive physical systems such as national grids, road networks, and courts. In practice, most states in the Global South have struggled to cross this institutional threshold. Weak governance, limited administrative capacity, and political fragmentation often prevent these prerequisites from forming at scale, locking development into a prolonged waiting period.
China’s approach points to a different logic—one based on technical bypass rather than institutional completion. Instead of demanding fully functional roads and railways, it offers drone-based logistics; instead of centralized and corruption-prone power grids, modular solar and storage microgrids; instead of universal formal education, AI assistants that extend cognitive capacity; and instead of comprehensive policing institutions, low-cost monitoring systems. These substitutes do not eliminate institutional weaknesses, but they reduce their binding constraints on economic activity and social coordination.
The result is a model that exports capability toolkits rather than institutional blueprints. Development becomes less about replicating an idealized governance structure and more about deploying functional capacity under imperfect conditions. Institutions still matter for long-term stability and equity, but technology can buy time—allowing productivity, coordination, and welfare gains to emerge before the full weight of “heavy” institutional reform is achieved.
VI. AI’s Power Hunger and the Infrastructure Constraint in the United States
A new reality has emerged in which artificial intelligence is inseparable from electricity. Modern data centers consume power at the scale of entire cities, making energy availability—not model quality—the critical limiting factor. In the United States, this demand collides with deep infrastructure bottlenecks: transformer shortages with lead times stretching four to seven years, overloaded transmission networks, and grid-connection queues that now dominate project timelines. As AI workloads scale, the electrical grid has become the decisive chokepoint.
U.S. technology firms have responded by internalizing what was once public infrastructure. Major players are building private gas-fired power plants, deploying mobile turbines, relying on large-scale energy storage to smooth peak loads, and even exploring the importation of complete power-generation units. High-profile projects illustrate the shift: xAI’s Memphis supercomputer relies on hundreds of megawatts supplied by on-site gas turbines, while OpenAI’s Texas-based Stargate project similarly incorporates a dedicated power plant. These moves have triggered lawsuits and regulatory scrutiny over Clean Air Act compliance and environmental justice, underscoring the tension between rapid AI expansion and existing legal and social constraints.
The broader implication is structural rather than technical. The binding constraint on AI progress in the United States is no longer algorithms, talent, or capital, but physical infrastructure—generation capacity, grid integration, and permitting timelines. As AI becomes ever more electricity-intensive, competitive advantage increasingly hinges on the ability to secure and deploy power at scale. In this environment, energy systems, not computational breakthroughs, define the pace and geography of AI development.
VII. Building AI-Ready Infrastructure Beyond the Cloud Dependency Model
China’s approach to exporting artificial intelligence emphasizes the delivery of “AI-ready infrastructure” rather than stand-alone software services. This integrated package typically combines clean energy generation and storage, modular data centers, localized AI models, and digital governance platforms. By bundling power, computation, and applications, the model addresses the core physical and institutional constraints that often limit advanced technology adoption in the Global South.
Concrete deployments illustrate the logic. In Ethiopia, industrial parks pair photovoltaic generation and energy storage with AI-driven quality inspection systems, enabling manufacturing upgrades without reliance on unstable grids. In the Gulf, partnerships such as UAE–Alibaba Cloud focus on Arabic-language natural language processing, embedding AI within local linguistic and regulatory contexts. In Chile, Huawei-supported edge AI clusters for mining operate with sub–10 millisecond latency, demonstrating how localized computation can meet demanding industrial requirements. Together, these cases point to a strategic shift: the creation of sovereign computing capacity rooted in local energy and infrastructure, rather than dependence on foreign software-as-a-service platforms and external cloud control.
VIII. From Rule-Making Dominance to Price-Driven Power
The strategic balance of power is shifting from a rules-based form of hegemony to one rooted in prices and accessibility. The traditional U.S.-led model has relied on high barriers to entry, the extraction of monopoly rents, and institutional leverage through mechanisms such as dollar dominance, intellectual property regimes, and technical standards. Power in this system flows from the ability to set rules that others must adopt in order to participate in global markets.
China’s emerging model operates on a different axis. By exploiting scale to drive cost collapse, modularizing systems to enhance resilience, and leveraging open-source diffusion, it lowers the threshold for adoption across multiple domains. Influence is gained not by enforcing compliance with institutional frameworks, but by making capabilities cheap, usable, and widely deployable. In this configuration, power increasingly belongs to those who can make essential technologies affordable enough to be used at scale, rather than to those who merely define the formal rules of access.
IX. The Firepower Paradox: Deterrence Without Monopoly
A new paradox is reshaping strategic balances: deterrence no longer requires exclusive control over advanced weaponry. The proliferation of low-cost precision strike systems has made anti-access/area-denial (A2/AD) capabilities accessible to middle powers, dramatically raising the economic cost of intervention for traditional hegemonic actors. As precision firepower becomes cheaper and more widely distributed, the ability to impose military outcomes through monopoly advantage diminishes.
This dynamic underwrites a form of multipolarity driven not by ideology or formal alliances, but by economic and technological realities. States can now impose credible deterrence at far lower cost, while powerful actors face escalating expenses to project force. In this sense, the strategic landscape is increasingly shaped by affordability and cost-exchange ratios, rather than exclusive technological possession or formal monopoly over military capability.
X. The Ultimate Contest: Who Defines Development?
A fundamental contest is emerging over the definition of development itself. The Western paradigm equates development with institutional convergence and the importation of technology, emphasizing rule of law, bureaucratic capacity, and adherence to externally defined standards. In contrast, China’s approach—practiced rather than proclaimed—frames development as the accumulation of capabilities, adaptive use of technology, and the pursuit of autonomy.
This divergence is reinforced by what can be called the Five-Force Revolution, a latecomer development operating system. By leveraging scale to reduce costs, modular design to limit systemic risk, and open-source approaches to accelerate localization, China’s model enables countries to achieve productivity and governance gains without first replicating Western institutional structures. The ultimate contest over development is thus not merely ideological, but structural: it revolves around whether progress is measured by adherence to prescribed rules or by the practical expansion of capabilities in diverse contexts.
Conclusion: A Price Revolution as an Operating-System Shift
China’s rise represents not a conventional price war, but a fundamental reset of global parameters. The United States’ system—characterized by high costs, entrenched rents, and steep barriers to entry—is being challenged by a low-cost, diffusive, and resilient alternative. The strategic contest of the future will not hinge on who is technologically “more advanced,” but on who can make the instruments of modernity affordable and accessible enough to achieve widespread adoption. In this sense, the ongoing transformation is less about innovation per se and more about redefining the economics of global development and power projection.