Neither tariffs nor export controls will stop China’s industrial engine
The first “China shock” was fairly easy to understand. Beginning in the 1990s, cheap Chinese goods poured into global markets, displacing large parts of lower-end manufacturing across the world. Now, China shock 2.0 seems to be under way, with China taking the lead in electric vehicles (EVs), batteries, solar panels, semiconductors and other more technologically sophisticated industries. This is…
China's industrial expansion is occurring in areas of less cutting-edge technology, making it a production story rather than a trade story. China has become a leading supplier of mature technologies like batteries, semiconductors, and software that are widely used across the global economy. Automobiles, for example, showcase how China's industrial expansion is driven by mature technologies rather than just the newest innovations.
Germany's automobile industry has shifted production to China, showing that electrification has changed the source of value, technology, and strategic dependence. China's dominance in battery production is based on mature lithium iron phosphate technology, not just cutting-edge advancements. The semiconductor industry in China has seen significant growth, with a substantial increase in global capacity for mature chips, which are essential for many modern technologies.
China's industrial expansion is supported by substantial capital investment in technologies that are already proven and widely used, rather than solely focusing on advanced technologies. Mature technologies are not obsolete, but they are becoming increasingly important to China's position in the global industry. Many sectors of the modern economy, such as machinery, electrical equipment, and transport equipment, now account for over half of China's exports, highlighting the increasing significance of mature technologies in China's industrial growth.
Written by urgent.news from Reuters Business via SCMP's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
