Henry Ford debuted an early icon of American industrial preeminence, the Model T, in 1908. At Shanghai’s annual auto show in April, China’s BYD Motors presented what might become the Model T of the 21st century, a full-featured electric vehicle dubbed the Seagull. Its $11,300 price tag is a third of what consumers have to shell out for the Chevy Bolt and roughly equal to China’s $12,500 per-capita gross domestic product, just as the Model T’s price was about equal to US per-capita GDP at its launch.

The Seagull, then, might just become the emblem of Chinese industrial preeminence in our century. The Middle Kingdom can produce it cheaply, because a new kind of automation, popularly dubbed the Fourth Industrial Revolution, powers its most advanced factories. Two new technologies—artificial intelligence and 5G broadband—link the digital world and the machines that make things. Manufacturing, mining, transport, warehousing: Everything to do with the production and movement of physical goods is on the cusp of a transformation comparable to the digital revolution of a generation ago.

This portends a winner-take-all market. In 2019, China exported just half a million cars a year, while Japan exported 4.5 million. Today, both Japan and China export 3 million cars a year—the Chinese have grabbed market share from Japan, Germany, and South Korea. BYD alone says it will increase car exports sixfold in 2023. China makes 27 million cars a year, compared to 10 million in the United States. With its vast domestic market and enormous economies of scale, China can do what Henry Ford did a century ago.

That leaves America with a stark choice. Either we lead this revolution, or we will be left behind, the way Britain was after World War II. America has already paid a steep price for allowing its manufacturing sector to decay. Countless American communities were ruined as manufacturing employment fell to barely 13 million today, down from a 1979 peak of 20 million. The erosion of industry is an important cause of the weakening of family ties and other social pathologies. It is about to get much worse—unless we take decisive action.

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