中文
By Warwick Powell
Lead: The world should see China's technological advances as an opportunity for collaboration, not a threat to resist.
In his address at the Summer Davos meeting in Dalian, Chinese Premier Li Qiang struck a confident and collaborative tone. He pushed back against the so-called "China Shock 2.0" narrative — the idea that China's rapid advances in electric vehicles (EVs), solar, batteries, AI, robotics and other frontier technologies are flooding global markets through unfair subsidies and threatening other economies. Instead, Li framed China's progress as "China Opportunity 2.0": a source of affordable advanced technologies, shared innovation benefits and high-return investment prospects for businesses worldwide.
This is more than just diplomatic rhetoric. It reflects a deeper structural reality in China's economy that mainstream, mainly Western, critiques often miss. Recent Western claims of excessive supply, chronic overcapacity and insufficient domestic demand paint a picture of imbalance and distortion. Yet these arguments rely on aggregate, one-dimensional thinking that collapses when confronted with the multi-sectoral dynamics actually at work.
China's restructuring is best understood as a dynamic, demand-led process of structural transformation. Drawing on classical insights, we see an economy continuously re-proportioning resources across different sectors. Productivity growth surges in some areas while demand composition evolves according to rising incomes and Engel's Law. Legacy subsystems like real estate and traditional manufacturing mature or contract, while newer ones — high-tech manufacturing, digital services and green technologies — expand. Transitional mismatches such as localized underutilization or price pressures are features of this process, not evidence of systemic failure.
Capacity utilization illustrates the point. Overall industrial utilization remains stable in its long-run 72-74% range, with high-tech and strategic sectors operating at much higher levels while continuing to expand. These variances are exactly what one expects in a system where old industries are phased out, new ones built and production methods continuously upgraded. "Overcapacity" in one subsystem is often transitional capacity that can be reallocated, upgraded or integrated into expanding domestic and international demand, not proof of wasteful investment.
Premier Li stressed that China's competitiveness stems from innovation, a vast domestic market and corporate investment, not subsidies alone. Behind this lies the refinement of industrial chains: complete, resilient ecosystems that reduce coordination costs, accelerate learning and improve production efficiency. The result is a system that generates greater complexity and value while managing waste.
This framework extends naturally beyond national borders. These industrial subsystems are logical constructs, not geographically confined. Global value chains are their international expression. China's export strength in frontier technologies is not a zero-sum "shock" but an invitation to collaborative value creation. Affordable, high-quality Chinese capital goods, intermediates and final products lower costs for industries worldwide, enabling capital rotation and productivity gains in partner economies.
The real opportunity lies in mutual leverage. Foreign firms and governments can invest directly in China's growth areas, where profit potential remains high due to scale, innovation speed and policy support for new productive forces. They can also import competitively priced Chinese intermediates and capital goods to upgrade their own industrial chains — reducing costs in EVs, renewables, electronics and automation while freeing domestic resources for higher-value activities. And they can attract Chinese capital and partnerships abroad through joint ventures, technology collaboration and infrastructure projects, extending Chinese industrial chains outward and creating jobs, skills transfer and market access in host countries.
This dynamic is already visible in China's expanding global trade. In the first five months of 2026, China's total goods trade reached 20.68 trillion yuan, or roughly $2.9 trillion, up 15.3% year on year, with imports growing faster than exports — 20.5% versus 11.8%. Trade with Belt and Road Initiative partner countries, particularly in the Global South, rose 13.6%, accounting for more than 51% of China's total trade. China has implemented zero-tariff treatment for all 53 African countries with which it has diplomatic relations, effective May 2026, significantly boosting two-way flows in agricultural goods, resources and manufactured products.
This momentum is also evident in Southeast Asia. In the first four months of 2026, China's exports to ASEAN surged 19% year on year. The country's EV exports hit a record $9.2 billion in May, up almost 50% from the previous year, driven by surging demand from ASEAN markets. The Hormuz crisis, which disrupted oil and LNG supplies to the region, sharply accelerated the shift to electrification. Thailand, Indonesia, the Philippines, Vietnam and Malaysia have all seen surging imports of Chinese EVs and solar panels, with governments rolling out incentives, expanding charging infrastructure and in some cases banning new fossil-fuel vehicle registrations. Chinese capacity in batteries, solar modules and EV components has enabled this rapid pivot, turning an energy crisis into an accelerated green transition that reduces fossil fuel dependence and builds more resilient local energy systems.
Chancay Port in Peru, operational since late 2024, has accelerated this trend: in its first year it handled more than 500,000 TEUs and 2.4 million tons of cargo, slashing transit times to Asia and boosting Peruvian exports to China while facilitating efficient imports of Chinese capital goods into Latin America.
Meanwhile, Chinese outward foreign direct investment in EV and clean energy manufacturing continues to expand globally, supported by the country's persistent trade surplus — which reached record levels of around $1.2 trillion in 2025 — generating substantial capital available for rotation into overseas capacity development. A gradually appreciating renminbi further enhances the attractiveness of outbound investment by increasing the domestic purchasing power of retained foreign earnings. Major examples include CATL's gigafactories and battery plants in Hungary, Spain and multiple sites in Southeast Asia; BYD's EV assembly plants in Thailand, Brazil and Hungary; and significant projects in North Africa, including Morocco and Egypt, for batteries and components.
Beyond clean tech, Chinese capital supports broader industrial transformation — including refinery upgrades and petrochemical complexes in Nigeria, Zambia and Chad, as well as integrated industrial parks in Southeast Asia and Latin America. These investments are typically anchored in prior BRI commitments to core energy, transportation infrastructure and special economic zones, which provide the foundational logistics, power and regulatory frameworks that enable higher-value manufacturing and local economic upgrading. This outward extension of industrial chains allows partner countries to capture more value locally through jobs, skills transfer and downstream industries, while turning potential competition into complementary, mutually reinforcing growth.
Such two-way flows cannot be understood through a purely national lens. The global economy is an interconnected system where investment, policy and trade drive structural change across borders. Rising Chinese wages and shifting consumption patterns reinforce this trend. As domestic demand grows in services and high-value goods, it complements rather than competes with global markets.
Critics who focus solely on subsidies or aggregate imbalances overlook these dynamics. They treat "capital" as homogeneous and consumption as fungible, ignoring sectoral differences and the need for continuous structural adaptation. China's approach — steering autonomous demand, refining industrial chains and using distribution policy to shape demand composition — manages the dynamic effective demand condition more effectively than aggregate rebalancing prescriptions.
Premier Li's message at Summer Davos was clear: China remains committed to constructive opening-up. This is not mere openness for its own sake but one grounded in robust domestic restructuring that generates genuine opportunities. For global businesses and policymakers willing to move beyond shock narratives, the invitation is practical: engage with China's evolving subsystems to co-create value across borders.
Yet this invitation comes at a time of mounting global headwinds and uncertainty. U.S.-led tariff escalations, export controls and unilateral sanctions have disrupted established value chains, undermined multilateral trade rules and injected volatility into critical sectors from semiconductors to clean energy. European anxieties over de-risking and supply security have added further friction. In this environment, collaboration with China becomes not just economically advantageous but essential for global stability and security.
A recent Pew Research survey across more than 30 nations found that no more than 23% of respondents believe the United States would "do the right thing" in international affairs — a sharp collapse of trust in America's role as the post-Cold War anchor. This vacuum demands that major countries like China step up as responsible actors, offering predictability, investment and technology cooperation. Deepening engagement with China's industrial chains and subsystems provides a stabilizing counterweight: reliable supply of affordable green technologies, capital rotation through outward foreign direct investment and mutually beneficial trade growth that supports development in the Global South and beyond.
The coming years will test whether the world — and particularly the so-called advanced Western world — embraces "China Opportunity 2.0." Doing so requires discarding outdated aggregate tropes in favor of a multi-sectoral, composition-focused understanding. China's experience shows that structural transformation, when actively coordinated, creates space for both domestic prosperity and international collaboration. The competitiveness Li highlighted is real. Yet the opportunity for mutual gain awaits those who choose to engage with these dynamics, rather than stand against them.
Warwick Powell is an adjunct professor at Queensland University of Technology.
