Rise of China's manufacturing: global opportunities

The language used to describe a country is never entirely neutral. It influences how facts are selected, how responsibilities are attributed, and which policies eventually appear acceptable. This is why the recent popularity of the terms "China Shock 2.0" and "China squeeze" deserves closer examination.

The first suggests that China aims to dominate technologically advanced industries, including electric vehicles, batteries, and solar equipment. The second claims that China has not abandoned labor-intensive manufacturing even though it has moved up the technological ladder, thereby reducing the space available for poorer countries to industrialize.

The problem with such claims is the attempt to turn specific economic pressures faced by a country into a broad accusation against China's productive capacity. It is unusual for a country to be reproached simultaneously for succeeding in advanced manufacturing and for remaining competitive in traditional industries. The underlying implication is that China should neither advance nor remain where it is.

Describing the present transformation as a "shock" also implies that China's industrial competitiveness emerged suddenly. That's not true. It is the result of several decades of investment in infrastructure, education, technical training, scientific research, industrial planning, and logistics.

The country has built dense productive networks in which component manufacturers, universities, research institutions, logistics operators, and digital platforms interact with final producers. Companies seeking to upgrade their products can source new components and reorganize production in a remarkably short period. Scale matters, but so do coordination and the ability to turn knowledge into production.

The International Energy Agency says Chinese electric vehicles have a significant cost advantage over those manufactured in advanced economies. Much of this difference is due to efficiency, automation, and access to integrated supply chains. Industrial policy is also an important factor, but that is not exceptional to China.

No major industrial economy has developed strategic sectors without any government support, which could come in various forms, including public procurement, research funding and tax incentives. It's a double standard to treat industrial policy which supports technological development in the West as legitimate, while branding it as unfair in China.

Those who accuse China of "overcapacity" overlook a fundamental question: How great are the global needs for green transition? A large chunk of the global population still lacks access to adequate energy infrastructure, and the world is far behind its climate commitments. According to the IEA, in 2025, global lithium-ion battery deployment was six times as high as in 2020, with average battery prices declining by 8 percent.

China's manufacturing scale and technological progress contributed significantly to this reduction. Its solar industry has similarly helped make renewable energy available to countries and communities that previously could not afford it. A solar panel is more than just a trade statistic. It supplies electricity to a rural school, a hospital, or a small agricultural producer, improving the everyday lives of different groups.

From the perspective of the Global South, the availability of affordable technologies is not a secondary issue. It can determine whether environmental modernization remains an aspiration or becomes a reality.

The so-called "China squeeze" argument is harder to substantiate because it rests largely on a hypothetical scenario. It presumes that, without China's presence, other low — and middle-income countries would have captured the markets currently served by Chinese manufacturers. But production would not have automatically shifted to any country with cheaper labor. Before starting or expanding their business in a country, companies also consider factors such as energy supply, transport infrastructure, financing, technological capacity, workforce qualifications, regulatory predictability and access to markets. Automation has further reduced the importance of labor costs in these decisions.

It is therefore politically convenient but analytically insufficient to blame China and Chinese exports for the challenges some developing countries face in expanding low-skilled manufacturing.

It might even divert attention from the necessary domestic reforms and the entrenched international inequalities that have constrained industrialization in the Global South for decades.

The popularity of "China Shock 2.0"and "China squeeze" says more about the present international order than it does about China.

For a long time, industrial and technological power was concentrated in a few Western economies. China's rise has changed that. What is sometimes presented as fear of China's "overcapacity" reflects their discomfort with a world in which productive and technological capabilities are more widely distributed.

That China's rapid industrial development has become a subject of critical discussions is not completely unexpected, but discussions should begin with evidence rather than labels. Competitiveness is not misconduct, and industrial success should not be treated as an offense against the international system.

China's productive capacity, in fact, can contribute to the development of other societies. For example, Chinese manufacturers not only account for a large share of electric vehicle sales in Brazil due to the affordability of their products, but have also established plants in Brazil, integrating Chinese technologies and Brazil's strengths in biofuels to develop vehicles that meet the demand of the largest car market in South America.

The most promising outcome of China-Brazil cooperation is not the passive importation of finished products but the establishment of productive partnerships capable of generating employment, training, research, and locally adapted innovation.

Ultimately, the key question for countries should not be how to prevent China from succeeding, but how to seize the opportunity to further facilitate their own development.

The author is a Brazilian sinologist, professor of international law at Fluminense Federal University, an invited professor at Macao Polytechnic University, and a specialist in China-Brazil relations and global governance.

The views don't necessarily reflect those of China Daily.

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