China is ready to lead the global economy

China, Made in China

In the past two years, the West has increasingly accused China of dumping its goods at uncompetitive prices in Western markets, with a particular focus on new green technology industries such as solar power, wind turbines, and, most notably, electric vehicles (EVs). While it’s true that China has historically provided substantial financial support to its EV manufacturers and subsidized EV purchases until the end of 2022, attributing China’s competitive edge solely to these subsidies is a gross oversimplification.

Three primary factors contribute to China’s competitiveness in these sectors:

Electric vehicles, alongside solar panels and wind turbines, have been integral to the ‘Made in China 2025’ initiative launched in 2015. China’s approach to EVs exemplifies its long-term strategic planning, a stark contrast to the short-term focus prevalent among Western manufacturers. Unlike China, Western firms, with the notable exception of Tesla, have clung to the profitability of internal combustion engine products. The Western automotive industry, particularly in Europe and the US, remained complacent, focusing on immediate profits rather than investing in future technologies. This myopic strategy has left them playing catch-up.

China, on the other hand, recognized early on the potential of EVs and renewable energy as the future of the automotive and energy industries. This foresight allowed China to build a robust infrastructure and develop a comprehensive ecosystem for these technologies. The Western manufacturers are now scrambling to adapt, having been blindsided by their own reluctance to move beyond conventional technologies. The result is a significant technological and market gap that the West is struggling to bridge.

China’s market is enormous and the most competitive globally. This hyper-competitive environment is often overlooked in the West, challenging the stereotypes about socialist economies. The dynamic and complex nature of China’s economy belies these outdated prejudices. In the EV sector, intense competition means most firms won’t survive, underscoring the fierce market dynamics at play. This relentless competition has driven innovation and efficiency, forcing companies to constantly improve to stay relevant. The Western perception of China as a monolithic, state-controlled economy fails to recognize the entrepreneurial vigor and competitive spirit that characterize its market.

In much of the 20th century, the US market was similarly dynamic and competitive, particularly compared to Europe. However, over time, Western markets have become less competitive and more consolidated, stifling innovation. In contrast, China’s market has remained a crucible of intense competition, fostering a culture of continuous improvement and adaptation. This environment has been particularly beneficial for the EV industry, where rapid advancements in technology and manufacturing processes are critical for success.

China prioritizes its industrial sector, representing every major industry globally. This capability allowed China to supply the world during the pandemic, unlike the West, which has long neglected its industrial base. The US, for example, is grappling with the decline of its shipping industry and the crisis at Boeing, its sole commercial aircraft producer. The West’s financialization, driven by profit maximization, has led to a deterioration of its manufacturing sector. The focus on short-term financial gains over long-term industrial health has left Western industries vulnerable and less resilient.

China, meanwhile, has maintained a steadfast commitment to its industrial sector, ensuring it remains competitive and capable of meeting both domestic and global demands. This strategic focus has enabled China to emerge as a leading industrial powerhouse, with the ability to produce a wide range of products, from consumer electronics to heavy machinery. During the COVID-19 pandemic, this industrial capacity proved invaluable as China was able to quickly ramp up production and supply critical goods to the world.

China is redefining industrial processes. The success of BYD, an innovative and efficient company that combines car manufacturing and battery production, exemplifies this transformation. BYD’s model is poised to dominate the global EV industry, similar to how Ford revolutionized mass production in the early 20th century. China’s economic revolution spans beyond a single company or industry, encompassing new green industries like wind turbines and solar power, which, together with innovative consumption and living standards, are ushering in a new era of human development. China’s forward-thinking approach is positioning it far ahead of the West, which will increasingly depend on Chinese green technology products to achieve carbon neutrality.

Instead of accusing China of unfair practices, the West should learn from China’s strategies. Ultimately, the West will have no choice but to adapt or risk being outcompeted across multiple sectors. The process has already begun, albeit slowly. The US and some European countries are beginning to consider industrial strategies inspired, whether acknowledged or not, by China. ‘Made in China 2025’ was not taken seriously in the West, rooted in the assumption that China was a developing country unable to innovate, destined to rely on cheap labor and Western technology. This miscalculation ignored China’s capacity for technological advancement.

Accusations against China obscure the reality that it is merely doing what any developing country in its position would do: learn and innovate. The West, in a bid to forestall China’s technological rise, is resorting to protectionism by blocking Chinese access to advanced technology. This effort, however, is as futile as King Canute’s attempt to stop the tide. The West will inevitably fail to halt China’s ascent.

China’s industrial strategy and long-term planning have positioned it as a global leader in green technology. Western countries must recognize the value of strategic foresight and competitive markets, learning from China’s example if they hope to remain relevant in the rapidly evolving global economy. The future belongs to those who prepare for it today, and China has made it clear that it is ready to lead.


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