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Palmer Luckey, the billionaire founder of defense technology company Anduril Industries and Oculus VR, is sounding the alarm on America’s dependence on China — and his warning goes far beyond cheap labor.
In a recent interview with the Hoover Institution (1), Luckey said China has become the place where much of the world’s most important engineering and manufacturing work gets done.
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“I used to make millions of virtual reality headsets in China,” Luckey said, noting that he has spent significant time in Shenzhen. “If you want to get stuff done and you want to build things, it is the place to be.”
According to Luckey, China’s advantage is not simply being a low-cost manufacturing hub. He argued that the country has built deep technical expertise across critical industries.
“Their people are just genuinely extremely good. They have the world’s best battery engineers,” he said. “They have many of the world’s best metallurgists, many of the world’s best optical engineers.”
Then came the warning that should make Americans pay attention: “American companies have been hollowed out,” Luckey said.
He argued that many U.S. companies no longer know how to actually build the products they design. In his view, America has shifted toward high-level concept work, while the difficult process of turning ideas into manufacturable products has increasingly been sent overseas.
That is where China comes in. Luckey said Chinese engineers are now doing much of the hard work of manufacturing, iteration, testing and production.
“They are the real engineers,” he said.
That is a brutal assessment. But it speaks to a much larger anxiety in America: The country may still own the brands, the patents and the corporate headquarters, but China increasingly controls the supply chains, materials, manufacturing know-how and engineering muscle needed to turn ideas into physical products.
‘Not in control of your own destiny’
The concern becomes even more serious when national security enters the picture.
“If you don’t control your raw materials, if you are dependent on your largest strategic adversary for everything that underpins your quality of life, you are fundamentally not in control of your own destiny,” Luckey said.
