What's behind 'China Squeeze' fallacy?

BEIJING - First came "China shock." Then followed "Chinese overcapacity." Now, some Western agitators have invented a new label: "China Squeeze."

A May 2026 paper from the Peterson Institute for International Economics argues that China's strength in labor-intensive manufacturing is narrowing the path to industrialization for poorer countries, highlighting competition from Chinese goods in the global and emerging markets and the foreign access to Chinese consumers. The narrative turns industrialization into a game of musical chairs: If China keeps its seat, another country must go without one.

That mistakes market share for proof of exclusion, competitiveness for misconduct, and division of labor in global supply chains for a contest among self-contained economies.