Enabling, not squeezing

China's development enlarges the global industrial pie for shared prosperity across the Global South

A persistent narrative has gained traction among certain Western policy circles and think tanks: China's manufacturing capacity is "squeezing" the industrial space of other developing nations. Under this framing, global manufacturing is portrayed as a fixed, zero-sum pie in which one nation's export expansion inherently denies others the chance to industrialize.

This view relies on an outdated model of international trade. It fundamentally misinterprets the dynamic realities of modern global value chains and ignores how industrial upgrading actually occurs. Far from pulling up the development ladder behind it, China is constructing critical structural steps, through intermediate capital exports, greenfield foreign direct investment and joint production ecosystems, that lower the threshold of industrialization across the Global South.

Expanding market access and sharing development dividends are key measures through which China supports the shared prosperity of the Global South. A landmark development is China's zero-tariff policy, effective May 1, covering 53 African countries with which it has diplomatic ties. China is the first major economy to grant unilateral, comprehensive duty-free access to these African nations.

China is taking concrete actions to help African nations better integrate into the global market and unlock their development potential. According to China's General Administration of Customs‌, in May and June, China's imports from Africa totaled 193.8 billion yuan ($28.8 billion), marking a 23.5 percent year-on-year increase. The import volumes of African specialty agricultural products and semi-processed mineral goods have steadily risen. The structure of China-Africa trade continues to improve: Chinese imports can match Africa's distinctive products and resource endowments; Chinese exports can deliver its high-quality equipment, mature technologies and full industrial chain capabilities. The partnership — characterized by complementary supply and demand, integrated industries and interconnected markets — is growing ever more robust.

The zero-sum argument also overlooks a profound structural shift in global trade statistics. China's export architecture has evolved from final consumer goods toward intermediate components, advanced machinery and green technology. According to data released by the National Bureau of Statistics, China's equipment manufacturing sector became a major driver of the country's export growth in the first half of 2026, with exports of mechanical and electrical products increasing by 20.1 percent. Based on data released by the Ministry of Industry and Information Technology, exports of wind turbine generators, lithium batteries and automobiles have registered growth in the first half of this year.

This development provides other developing economies with competitively priced capital inputs. Critics often worry that relying on imported intermediate goods leads to premature deindustrialization or locks some developing nations into low-value assembly. Yet history demonstrates that almost every modern industrial power, including China during its early reform era, began by mastering processing and assembly before moving up the technological ladder. Importing cost-effective components, energy systems and industrial machinery lowers operational baselines for local manufacturers.

Furthermore, this mechanism generates a vital macroeconomic benefit: input-cost disinflation. Instead of forcing emerging markets into capital-intensive, high-risk import substitution from scratch, cost-effective goods act as a structural anti-inflationary buffer. Local industries gain immediate price competitiveness, enabling domestic capital to focus on downstream processing, customized manufacturing and regional market distribution. The emerging pattern is a highly collaborative division of labor where China supplies intermediate goods, partner countries process and assemble and both benefit from joint global exports.

Trade flows alone, however, tell only half of the story. The transition from simple commerce to long-term economic integration is powered by direct capital deployment. Data highlights a pivot in cross-border investment: China's non-financial direct investment in Belt and Road partner nations surpassed $39.67 billion in 2025, accompanied by over $257.98 billion in signed construction contracts.

This capital is no longer limited to basic infrastructure or sovereign loans. It is increasingly directed into physical greenfield production. From manufacturing complexes in Egypt's Suez Canal Economic Zone to multi-billion-dollar green ammonia and renewable energy programs in Ethiopia, capital is being anchored directly inside host countries. Dedicated industrial parks act as ecosystem anchors, generating local employment, transferring operational skills and converting raw materials into processed, value-added exports on-site. Greenfield investment ensures that host nations do not remain passive consumers, but steadily construct durable domestic industrial capacity.

In this sense, China and other Global South countries are complementary and mutually reinforcing partners working hand-in-hand, rather than competitors in homogeneous rivalry. China serves as an important enabler of industrialization and the green transition across the Global South.

The assertion that China's industrial power "squeezes" other Global South countries fails to withstand empirical scrutiny. Industrial growth in the 21st century is not achieved through isolation or protectionist barriers, but through deep integration into global value chains. By supplying cost-effective intermediate goods, mitigating domestic inflationary pressures, and committing direct capital to greenfield industrial ecosystems, China is expanding the global industrial pie. When integrated with various dynamic multilateral platforms, this model demonstrates that South-South cooperation is fundamentally transformational, building the steps for shared, long-term economic prosperity.

China's development is an opportunity, not a challenge, for the world. Committed to an open strategy of mutual benefits and win-win cooperation, China can empower global economic recovery through its own high-quality development.

Today, aligning with China's development opportunities, deepening practical cooperation with China, and participating in the Belt and Road Initiative have become significant choices for many countries around the world. Multilateral platforms such as the Forum on China-Africa Cooperation, the China-Arab States Cooperation Forum and the China-CELAC Forum have delivered tangible results.

Strategic cross-regional frameworks, such as the historical ties connecting Portugal and the broader Portuguese-speaking world (representing more than 270 million consumers), offer an additional blueprint for trilateral economic cooperation. As an EU member state with deep corporate networks across Latin America and Africa, Portugal can combine Chinese capital equipment and advanced technologies with local engineering, logistics, and management expertise. Coupled with the institutional clearing mechanisms of Forum Macao, this trilateral model can ensure that South-South trade is supported by balanced, multi-party supply chains to help deepen cooperation in global production capacity, technological innovation, infrastructure connectivity and green development.

The author is the secretary-general of the Portugal-China Chamber of Commerce and Industry.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.