What's behind 'China Squeeze' fallacy?
Fair competition
The first mistake is the counterfactual. If China exported less, would developing countries necessarily export more?
A shirt not made in China would therefore not automatically be made in the poorest available country. It might be produced in another established manufacturing center, made with more automation or not sold at the same price.
The "squeeze" narrative also weighs competition more than demand. China exports manufactured goods while importing large quantities of commodities, agricultural products and components. Its machinery and equipment can lower production costs elsewhere, while robust Chinese demand sustains imports from around the world.
A 2025 International Monetary Fund study found that China has made significant contributions to global economic growth and spillovers. Trade among developing economies has expanded fast, as South-South trade has surged tenfold over the past three decades and now accounts for more than one-third of global commerce, UN Trade and Development reported in 2025.
