A critical asymmetry exists in the US-China competition: It is far harder for the U.S. to rebuild its complex manufacturing ecosystems and tacit process knowledge than it is for China to improve its scientific research capabilities, where it is already making significant strides.

Critical manufacturing expertise is not easily codified in manuals; it's tacit knowledge embedded in experienced teams. Offshoring production leads to an irreversible loss of this 'process capital,' hindering a nation's ability to innovate and scale complex industries, as demonstrated by the transfer of German rocket scientists after WWII.

China offers a hyper-concentrated manufacturing ecosystem where suppliers are neighbors, supported by world-class infrastructure. This dramatically speeds up prototyping and production, turning complex international logistics into a simple "walk down the street."

Apple's deep reliance on China is not just about cost but a 25-year investment in a manufacturing ecosystem that can produce complex products at immense scale and quality. Replicating this unique combination in India or elsewhere is considered fanciful.

When asked if AI commoditizes software, Bravo argues that durable moats aren't just code, which can be replicated. They are the deep understanding of customer processes and the ability to service them. This involves re-engineering organizations, not just deploying a product.

The belief that China's manufacturing advantage is cheap labor is dangerously outdated. Its true dominance lies in a 20-year head start on manufacturing autonomy, with production for complex products like the PlayStation 5 being 90% automated. The US outsourced innovation instead of automating domestically.

China achieved tech superpower status not through invention, but by mastering mass manufacturing and process knowledge. It allows the U.S. to create the initial spark (0-to-1), like solar PV, and then China creates the "prairie fire" by scaling it (1-to-N), ultimately dominating the industry.

Investor Henry Ellenbogen favors two types of competitive advantages. First, hard-to-replicate physical assets like distribution networks, which are messy and time-consuming to build. Second, “soft” moats built on elite human systems for talent development, operational excellence (like the Danaher Business System), and sharp capital allocation. These are harder to see but just as powerful as physical scale.

While the West may lead in AI models, China's key strategic advantage is its ability to 'embody' AI in hardware. Decades of de-industrialization in the U.S. have left a gap, while China's manufacturing dominance allows it to integrate AI into cars, drones, and robots at a scale the West cannot currently match.