Prestige Diffusion Theory: China's Uneven Transition from Concentrated Academic Power to Distributed Engineering Excellence

The rise of China in engineering, architecture, urbanism, and construction is one of the most significant academic and technological transformations of the twenty-first century. This article proposes Prestige Diffusion Theory to explain how China modernized its higher education and research system across five phases: foreign knowledge acquisition, concentration of prestige in elite institutions, diffusion of expertise through the national system, redistribution of talent through competitive mobility, and the emergence of distributed excellence. The most recent evidence from 2024 through 2026, including Nature Index data, Ministry of Education outbound mobility figures, NSFC funding records, and documented AI-enabled academic fraud, both supports and significantly complicates this theory. Diffusion is happening, but so is strategic re-concentration at the apex. Talent mobility is occurring, but is driven as much by oversupply and precarity as by healthy career design. Generative AI is equalizing genuine research capability while simultaneously industrializing fraud. Demographic decline is compressing the same regional institutions that diffusion was supposed to strengthen. The article presents the theory, revises it against current evidence, and extracts lessons for other countries attempting comparable academic transformations.