A popular joke going around lately goes like this:
The expected "inaugural years" for 2026 are as follows:
The Inaugural Year of Autonomous Driving
The Inaugural Year of Liquid Cooling
The Inaugural Year of Domestic HBM
The Inaugural Year of Edge - side AI
The Inaugural Year of Solid - State Batteries
The Inaugural Year of AI Applications
The Inaugural Year of Quantum Computing
The Inaugural Year of Compute - in - Memory Chips
The Inaugural Year of Brain - Inspired Computing
The Inaugural Year of Low - Altitude Economy
The Inaugural Year of Industrial and Commercial Aerospace
The Inaugural Year of Humanoid Robots
The Inaugural Year of Silicon Photonics
The Inaugural Year of Controlled Nuclear Fusion
The sheer number of "inaugural technological years" for 2026 may sound like a mockery, a sign of skepticism toward technology, and a reflection of the cynical mood amid the current economic transformation. But from my perspective, this atmosphere of "inaugural years" is more a symbol of the surging wave of technological innovation today.
The achievements of China's Made in China 2025 initiative speak for themselves, and the United States' Genesis Mission both serve to integrate the scattered resources of technological development, foster a thriving ecosystem of technological innovation, and demonstrate the forward - looking vision of elites in both countries in seizing this wave of technological explosion.
What has been a major concern for many people—the deflationary spiral—often turns out to be just an insignificant footnote to an era when viewed against the backdrop of such a technological boom. In hindsight, the rapid iteration of technology renders the so - called economic "chill" a fleeting memory.
Looking back at the U.S. in the 1920s a century ago, we can find striking parallels with China's current situation, as well as differences resulting from distinct stages of technological development. Overall, we can confidently assert:
China today is replicating America's "Roaring Twenties" down to the smallest detail.
The Twilight of Prosperity
The U.S. economic situation at the start of the 1920s bears a striking resemblance to China's current state:
With the outbreak of World War I, U.S. federal government spending soared from approximately $700 million in 1916 to a peak of $18.5 billion in 1919, an increase of nearly 26 times. The size of the military swelled from over 200,000 before the war to more than 4 million. There was an enormous demand for military uniforms, weapons, ammunition, ships, aircraft, food, steel, and chemicals.
However, after the war ended, the demand from the war - time economy that had supplied the entire European battlefield vanished overnight, leading to a rapid reversal of the supply - demand dynamic.
As the war came to a close, agricultural production in Europe gradually recovered, but economic purchasing power collapsed sharply. U.S. exports of agricultural products and raw materials began to plummet. Meanwhile, the demand for military rations, ordnance, and uniforms from the U.S. military disappeared as 4 million soldiers returned home.
Between 1920 and 1921, the U.S. endured a painful period of de - capacity and severe deflation. After the armistice in November 1918, government orders evaporated instantly: federal spending plunged 75% in fiscal year 1920 (from $18.5 billion to $6.5 billion), and a large number of orders for war - time factories were canceled or drastically reduced.
Wholesale Price Index: It plummeted from its peak in May 1920, dropping by a cumulative 36.8% - 45% by June 1921. This was the sharpest single - year decline in wholesale prices since the American Revolutionary War.
Consumer Price Index (CPI): It fell by 15.8% from June 1920 to June 1921, with an annual consumer price drop of approximately 11.3%.
Among these, the prices of agricultural products and raw materials collapsed the most severely. For example, wheat, cotton, corn, and pork prices nosedived. American ranchers, who had made huge profits from beef and cowhides during the war, saw their bankruptcy rate triple or quadruple that of the pre - war period, and thousands of ranches declared bankruptcy.
When mapped onto the current situation, the start of the U.S. 1920s teaches us a crucial lesson:
What truly harms you is not recession, but prosperity. Most of the supply capacity built up during prosperous times comes with high costs and is the first to be eliminated during a recession.
The hardship of this period was no less severe than China's current real estate deleveraging:
At its peak, the U.S. national unemployment rate approached 12%. Shipbuilding orders plummeted by over 90% in 1920. Steel mill operating rates dropped to 30% - 40%. The founder of General Motors went bankrupt due to inventory backlogs. DuPont, which produced explosives, slipped into losses after the war. The de - capacity process in agriculture dragged on throughout the 1920s, with tens of thousands of farms going bankrupt each year.
The price collapse, oversupply, and sky - high unemployment are essentially similar to China's prolonged economic readjustment today, differing only in duration.
The upsurge of prosperity left too many participants burdened with exorbitant costs. During the economic contraction, these costs became a long - lasting and heavy burden, leading to their elimination from the market.
The Silver Lining: A Supply - Side Technological Explosion
Yet, amid this painful period of economic readjustment, the rapid emergence of new technologies not only established the U.S. as the world's industrial hegemon before World War II but also laid the foundation for the decades - long economic dividends that persisted for 80 years after the war.
Fueled by the widespread adoption of electricity, which was comparable in impact to today's AI revolution, Ford Motor Company achieved a dramatic increase in industrial production efficiency. This made automobiles accessible to a growing number of Americans, and Ford transformed from the brink of bankruptcy into a U.S. industrial giant that dominated the industry for decades.
The popularity of automobiles, combined with the rapid expansion of railway and highway infrastructure, led a large number of Americans to travel south from northern industrial centers for vacations, triggering a real estate boom across Florida.
Cinemas, hotels, and residential buildings sprouted up everywhere. Many young people seized the opportunity presented by the massive development of Miami, Florida, to speculate in real estate pre - sales. People at that time called these speculators "binder boys"—young men who bought real estate with just a deposit and resold it quickly.
They paid a small "binder" (deposit) to secure land, with the full payment due within 30 days. However, they often resold the land to the next buyer within a few days to make a profit from the price difference. The same plot of land could be resold multiple times, generating only paper profits, and many never actually took ownership of the land. At the peak between 1924 and 1925, many binder boys rose from rags to riches as millionaires in a short span.
In fact, there were numerous examples of individuals who seized opportunities during the recession to achieve remarkable success:
John F. Kennedy worked as a stockbroker at a time when most people avoided the stock market, laying the foundation for his family's future fortune through various means.
Howard Hughes, who set a record for transcontinental flight, founded the predecessor of Baker Hughes, one of the top oilfield services companies in the U.S. today.
Similarly, China is home to countless daring entrepreneurs. Companies like Great Wall Motor, which are expanding globally, are now leading the charge in technological transformation and challenging outdated conventions with their growing wealth.
The 1920s Had Its Own OpenAI
One of the most significant examples is the Radio Corporation of America (RCA):
RCA's market value soared between 1920 and 1929. As a manufacturer of radios, it was the quintessential "tech stock" of the Roaring Twenties, comparable to Cisco or NVIDIA in its era, with its stock price skyrocketing hundreds of times from a low base.
RCA held the core patents for radios, and the surging sales volume painted a bright future for the company. Radios also evolved into an entirely new advertising platform. Major consumer brands began investing heavily in radio advertising, giving birth to the national advertising industry as a brand - new business model.
This mirrors the current state of AI development in China. In the stock market, some companies like Tencent are hesitant to fully embrace AI, while others like Alibaba have gone all - in on the technology. Upstream chip manufacturers such as Cambricon have seen their market value surge by trillions of yuan in a year, attracting a flood of investors.
Many people only see the bubble and its inevitable burst, but they fail to recognize the profound technological transformation and productivity gains brought about by radio, which were on par with today's large - scale AI models.
Firstly, news, price updates, weather forecasts, agricultural information, and business orders could be transmitted instantly to factories, farms, offices, and even battlefields.
The revolution in communication technology was the cornerstone of the U.S.'s over 5% annual productivity growth during that decade.
Secondly, radio enabled brands to quickly build nationwide recognition, making large - scale production more cost - effective and driving down costs. Advertising expanded from regional to national coverage, benefiting industries such as automobiles, home appliances, and cosmetics, and giving rise to numerous consumer giants.
The true dividends of radio did not materialize until the 1930s. This lag in productivity gains led to the underestimation of radio's impact at that time.
The current criticisms directed at China's GPU and large - scale AI models are similarly a reflection of outdated thinking.
Conclusion
The U.S. in the 1920s was a decade marked by disillusionment, frustration, unprecedented industrial growth, and legendary wealth - creation stories—parallels that are clearly visible in China today.
Yet, the most important lesson to be learned is that while the productivity gains from the supply - side revolution were real, their benefits often took time to materialize. During the Great Depression of the 1930s, radio emerged as an affordable form of entertainment for the masses.
The 1929 stock market crash caused RCA's stock price to plummet by 98%, but the radio technology itself was no bubble. It fundamentally transformed the U.S. economy and social structure.
Just as many people today focus solely on the high valuations and perceived bubbles in AI - related stocks while ignoring the potential for underlying productivity growth, radio in the 1920s left a lasting technological legacy despite the bubble's burst.
For China, which is mirroring America's "Roaring Twenties," the key questions to ponder are: which disappointments and frustrations will fade into obscurity, which technological impacts will outlast the bubbles, and most importantly, who will emerge as the next generation of wealth - creating legends amid this era of transformation.
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