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Deja vu all over again?

In the 1970s, Japan became an economic superpower.

From the ashes of a war-torn economy rose two industries that ruled the world in terms of value, quality and performance.

Starting in the 1970s and growing during the years that followed, Japan's automotive and electronic industries set a benchmark that other nations struggled to match.

Brands such as Toyota, Honda, Sony, Panasonic soon became household names across the world and displaced traditional manufacturers in these segments such as Ford, General Motors, RCA, Zenith, Westinghouse and the like.

Right now, something very similar is happening and it appears as if history is about to repeat.

Of course it's now 2025, not the 1970s so things are a little different -- but still very much the same.

This time it's not Japan that is boxing above its weight and upsetting the established brands.

No, this time it's China.

China's EVs are doing to the auto industry what Japanese brands did some 50 years ago except they're doing it far more quickly and effectively.

Chinese car maker BYD has already blown Tesla's sales records out of the water and is now the world's number-one EV maker.

Whereas the Japanese car industry took more than a decade to gain huge market-share, China seems to have done this in a fraction the time.

However, it's not just cars where China is asserting its dominance, they're also disrupting one of the newest markets to emerge from the computer industry: Artificial Intelligence.

While most countries have been pouring billions of dollars into creating huge AI systems and planning to spend hundreds of billions more in the near future -- China has pulled the rug out from under them by releasing AI systems that run on the smell of an oily rag.

It started with DeepSeek but last week Baidu announced the release of ERNIE X1 which promises similar or better performance using platforms that cost half the price.

Not to be outdone, Alibaba also announced a new AI system called QwQ-32B (now there's a name that just rolls off the tongue!).

What is becoming abundantly clear is that China has become a real force to be reckoned with, in much the same way Japan did in the latter part of last century.

Where things go from here is far from certain but if we learn from history, chances are that China will continue to grow its market share in these industries through agressive discounting whilst continuing to improve quality and performance by further leveraging its mineral and intellectual capital to great effect.

Given the political instability that is so widespread across the globe right now, there are no certainties except that the next decade or two could be quite tumultuous and interesting -- to say the least.

Carpe Diem folks!

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