This article is republished from アジア財経観察
By Yuanyin in Tokyo
In 2026, Asia is undergoing a profound economic restructuring.
In its July 2026 update to the World Economic Outlook, the International Monetary Fund raised its forecast for China’s economic growth to 4.6 percent, highlighting the certainty and stability that China continues to contribute to the global economy.
In March 2026, the Boao Forum for Asia released two flagship reports: Asian Economic Outlook and Integration Progress and Sustainable Development: Asia and the World. According to the reports, Asian economies are expected to account for 49.7 percent of global GDP and contribute more than 60 percent of worldwide economic growth, with China alone providing approximately 30 percentage points of that contribution.
Prosperity, however, is far from evenly distributed. India’s IT outsourcing industry is being disrupted by artificial intelligence, Japan’s industrial sector is facing multiple challenges, Hong Kong has emerged as the world’s leading family-office hub, and exports of China’s “new three” industries continue to surge.
Within this complex economic mosaic, the Hamilton Index provides a crucial piece of the puzzle.
In May 2026, the US-based Information Technology and Innovation Foundation, or ITIF, released the latest edition of its Hamilton Index. The report found that China accounted for 24.9 percent of global output across ten advanced industries, the largest share of any country, and ranked first in seven of the ten sectors.
Meghan Ostertag, the report’s lead author, provided an even more striking set of figures. Since 1995, China’s global share across these ten industries has surged from 3.5 percent to nearly 25 percent. On average, China’s output in these sectors has increased by more than 2,200 percent, compared with only about 200 percent in the United States.
“The global landscape of high-end advanced industries—once dominated by the United States, with Europe and Japan occupying central positions and firmly controlling both the rules and production capacity—has now been fundamentally reconfigured.”
This is not merely a quantitative change. It is a qualitative transformation.
The seven sectors in which China leads—computers and electronics, chemicals, machinery and equipment, basic metals including steel, motor vehicles, fabricated metal products, and electrical equipment—form a panoramic picture of the country’s strength in “hard manufacturing.”
The three sectors led by the United States—IT and information services, pharmaceuticals, and aerospace—represent its remaining advantages in “soft technology” and high-value-added industries.
The location quotient, or LQ, reveals an even deeper reality. China has an LQ of 1.36, meaning that advanced industries are 36 percent more concentrated in the Chinese economy than the global average. The United States has an LQ of only 0.88, 12 percent below the global average.
For the United States to match China’s level of industrial intensity, it would need to increase its advanced-industry output by 56 percent, equivalent to an additional US$1.5 trillion in production.
Other Asian economies also deserve attention. South Korea has an LQ of 2.17, the second highest in the world. Taiwan records an LQ of 2.63, the highest globally, while Vietnam ranks third with an LQ of 1.82.
Three Asian economies now rank among the world’s top four. The battleground for advanced industries has decisively shifted eastward.
Beneath the macroeconomic figures lie tangible technological breakthroughs.
In June 2026, Shanghai Pangood Power achieved the world’s first mass production of axial-flux motors in Lanxi, Zhejiang Province. The motors’ effective power density exceeded the target set in China’s 2040 technology roadmap by 43 percent, while both their weight and physical dimensions were reduced by 50 percent.
This technology spans three high-value growth sectors: new-energy vehicles, humanoid robot joints, and low-altitude aircraft. These are precisely among the most promising segments of the electrical equipment industry, in which China already accounts for more than 30 percent of global output.
From the “torrent of steel” to the “motor revolution,” Chinese manufacturing is moving from quantitative scale toward qualitative breakthroughs.
The report has attracted particular attention because it touches on a deeper issue: advanced industries are not merely an economic concern. They are also a matter of national security.
The founder of ITIF warned:
“If current trends continue, the loss of Western industrial leadership will define the future balance of economic and military power.”
This is precisely why the index is named after Alexander Hamilton. Industrial capacity is the infrastructure of national power.
Between 2012 and 2022, the share of advanced-industry output held by members of the Organisation for Economic Co-operation and Development fell from 64 percent to 58 percent, while China’s share rose from 19 percent to 24.9 percent.
Over the course of a decade, Western economies lost six percentage points, while China gained approximately the same amount.
To maintain its current position, China will need to continue advancing in three directions: sustaining the growth of its advanced industries while preventing excessive concentration of investment; closing its remaining gaps in semiconductors, foundational software, and other soft technologies as quickly as possible; and maintaining a careful balance of competition and cooperation with Europe, the United States, Japan, and South Korea.
The Hamilton Index represents only one perspective on Asia’s changing economic landscape.
From China’s role as an engine of global growth to the industrial pain caused by AI disruption in India, from Japan’s structural decline to Hong Kong’s rise as the world’s leading family-office centre, Asia is undergoing a far-reaching transformation.
And this transformation has only just begun.
Commentary
The Rise and Fall of Industries Is a Constant
A report published by an American think tank has used data to acknowledge China’s leading position in advanced industries. That recognition is news in itself.
Yet what deserves more attention than the question of “who ranks first” is the nature of the competition.
The contest in advanced industries is a marathon. It is not decided by momentary speed, but by sustained endurance. The rise of one player and the decline of another are normal features of industrial competition. What ultimately determines the outcome is which economy can continue evolving within its own field of strength.
The finish line of this marathon remains a long way off.
