China's production capacity: An opportunity, not a threat

Editor's note: Shao Xia is a commentator on international affairs for CGTN. The article reflects the author's opinions and not necessarily the views of CGTN.

Some Western politicians and media outlets have been hyping up the "China Shock 2.0" narrative, claiming that China's expanding production capacity poses a threat to other countries and may even undermine the global trading system.

Whether labeled 1.0 or 2.0, such rhetoric reflects anxiety in some Western circles about China's resilience in foreign trade. The facts and figures, however, tell a different story.

From 'Made in China' to 'Intelligent Manufacturing in China'

It is widely recognized that the essence of free trade lies in comparative advantage: Each country focuses on what it does best, exchanges goods on that basis, and all parties benefit. Whoever produces better and more efficiently naturally gains a larger share of the market.

Over past decades, "Made in China" products have spread across the world, allowing consumers to enjoy more affordable goods. Meanwhile, China completed in just a few decades an industrial upgrading process that took others centuries, moving up from the bottom of the "smiling curve" toward intelligent manufacturing and modern services at both ends of the value chain.

Today, China boasts the world's most complete industrial system. As of 2025, China's manufacturing value‑added accounted for nearly 30% of the global total, with the country ranking first in overall manufacturing scale for 16 consecutive years. From a single screw to a complete vehicle, from a silicon wafer to an entire photovoltaic power station, China's full‑chain industrial clustering has made "China speed" and "China efficiency" benchmarks that are difficult to replicate.

When Chinese renewable‑energy vehicles shine at international auto shows, when China's high‑speed rail standards become international references, and when Chinese cultural and creative products integrate Eastern aesthetics into global branding, it is clear that "Intelligent Manufacturing in China" has entered the higher end of the global value chain. Chinese brands are increasingly shifting from functional suppliers to innovators that combine technology with cultural value.

Quality production capacity is not overcapacity

In a globalized world, quality products never lack markets. According to the International Energy Agency, global electric vehicle sales are projected to reach 45 million in 2030 in the Announced Pledges Scenario, which aligns with meeting climate targets, while demand for photovoltaic installations will continue to surge. From this perspective, high‑quality green capacity is far from excessive – it is in short supply.

Even when Chinese electric vehicles are sold in Europe at prices significantly higher than those in the domestic market, demand still exceeds supply. Chinese companies are therefore working at full capacity to fill a massive global supply gap.

Moreover, China exports not only products, but also technology and solutions. In Azerbaijan, Chinese‑built photovoltaic power stations have helped advance the country's renewable‑energy targets. In Jordan, China's green‑energy cooperation projects are contributing to its economic modernization vision by turning desert sunlight into tangible development gains. Since 2022 alone, Chinese enterprises have announced overseas clean‑energy investments totaling $210 billion, underscoring that China is helping to "create jobs," not "take jobs."

Facts speak louder than rhetoric. When Chinese electric vehicles are in short supply across Europe, Southeast Asia and the Middle East, and when Chinese photovoltaic products light up homes in countries of the Global South, this reflects market choice and popular support. China's quality production capacity has become one of the most sought‑after "hard currencies" in the global economy.

What China's production capacity means for the world

China's production capacity serves as a stabilizing anchor for global demand. Many countries, particularly developing ones, have urgent needs in infrastructure construction and energy transition that Chinese capacity helps meet. In 2025, China's steel exports to Saudi Arabia supported the country's "Vision 2030" transformation plan by filling domestic supply gaps. Chinese new‑energy vehicle exports also met strong demand in markets such as the United Kingdom, Australia, Mexico and the Philippines.

For developing countries, importing Chinese intermediate goods is often a critical step toward industrial upgrading. Vietnam, for example, has become the world's second‑largest mobile‑phone exporter by relying on integrated circuits, lithium‑ion batteries and liquid-crystal display (LCD) panels imported largely from China, attracting global brands to invest locally. In Thailand, nearly 80% of China's exports consist of production equipment and intermediate goods essential for Thai manufacturing and exports.

China's production capacity also acts as a stabilizer against global inflation. While some Western commentators talk about alleged "overcapacity," consumers in Western countries continue to purchase Chinese goods with their own money because they face rising living costs. Affordable Chinese products help ease inflationary pressure while injecting competition and vitality into markets.

The "China Shock 2.0" narrative is therefore an exaggeration. The world is big enough for all countries to develop together. Recent visits to China by many foreign leaders show that engagement with China remains a rational choice. Viewing China's development objectively and seizing opportunities for mutually beneficial cooperation is the right path forward.

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