Over the past few years, the United States has imposed tariffs and export controls. Multinational companies have adopted “China plus one” strategies. Supply chain resilience has become a boardroom obsession. Yet China’s exports have continued to grow, helping to cushion its weakening domestic economy. Its goods trade surplus reached a record $1.2 trillion in 2025. But it would be a mistake to assume that this can carry on indefinitely. Increasingly, what is economically efficient is no longer politically tenable.
Most countries do not simply want to buy Chinese electric vehicles, batteries, solar panels, machinery and robots. They want factories of their own. They want their workers to acquire new skills and their suppliers to move up the value chain. They want technology and know-how. For years, Western companies complained that access to China’s enormous market came with demands for technology transfers. Now, China finds itself on the other side of the table, being asked to share its own expertise.
China’s real advantage lies no longer in cheap labor or subsidies, but in the accumulated learning embedded in perhaps the densest industrial ecosystem the world has ever seen. What China can now export is not just what it makes, but what it has learnt about how to make it.
The important question now is whether that learning can travel. Neither Brazil nor Indonesia can recreate Shenzhen by decree. But they need not retrace the 30 years China spent building it. They can build on what China has already learnt. Chinese companies can bring machinery, engineers, production processes and supply-chain expertise with them. Local workers learn; local suppliers improve.
Such a shift is already under way. In Brazil, BYD is moving from importing cars to manufacturing them locally and developing local suppliers. In Hungary, it is pairing its first European passenger-car factory with a research and development center that will work with Hungarian universities and companies.
At first glance, this may sound like a loss for China. Why give up production at home? Why train tomorrow’s competitors? Because the alternative may be worse. Countries increasingly want options. They do not want their economic future to depend overwhelmingly on any single supplier, Chinese or American.
America retains formidable advantages at the technological frontier. China’s constraints have pushed its ecosystem in a somewhat different direction: toward efficiency, lower-cost deployment, open models and rapid downstream application. Chinese developers have strong incentives to spread their models widely, allow others to adapt them and capture value from the ecosystem that grows around them. The world’s most downloaded family of open AI models is Chinese: Alibaba’s Qwen.
From China, with love
Openness is not simply an act of generosity. It can also be an economic strategy. Open systems surrender some rents at the core while creating larger markets for applications, integration and services. If China cannot monopolize the technological frontier, it can compete by making technology cheaper, more adaptable and more ubiquitous.
China has now reached the other side of that development process. By 2050, the most important measure of China’s economic success will not be how much it sells to the rest of the world, or how much of the world’s manufacturing remains within Chinese supply chains or whether a Chinese model tops every AI benchmark. It will likely be whether China’s success can help generate success for other countries.
The question for the next few decades is whether China can do the same for others.
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