Illustration: Liu Xidan/GT

For a while, some people have been peddling the "China Shock 2.0" narrative, which portrays China's advancement in high-tech sectors - such as electric vehicles, batteries, semiconductors and artificial intelligence - as a disruptive force. Some commentators point to state subsidies and industrial overcapacity, suggesting that these are fueling a surge of low-cost Chinese exports that threaten to undercut global producers, weaken competitiveness and destabilize markets. Some even frame China's development as a strategic challenge and call for stronger industrial policies, enhanced trade defenses and tighter technology controls. 

But is this narrative rational - or a distortion of facts? 

Looking beyond goods: the full picture of global exchange

A narrow focus on trade in goods misses the complex reality of today's deeply intertwined global economy. A full assessment must include trade in services and the earnings of multinational companies - areas where Western economies hold a strong advantage.

In 2024, the US recorded a service trade surplus of over $27 billion with China, while the EU's service surplus exceeded $50 billion.

Foreign-invested enterprises in China account for one-third of the country's total trade and half of its exports in machinery, electronics and high-tech products. Nearly 40 percent of European companies' sales in China are shipped back to Europe. In 2023, EU-invested firms in China generated revenues of over $960 billion and more than $80 billion in profits - far surpassing the earnings of Chinese companies in Europe.

Focusing solely on China's surplus in goods trade while ignoring its substantial deficits in other areas presents a distorted picture.

Cost efficiency that benefits global consumers

China's high-quality, competitively priced products help stabilize global industrial and supply chains, reduce living costs for consumers worldwide, and ease inflationary pressures faced by many economies. In The Wall Street Journal, an article written by University of Chicago economist James Heckman and University of Pennsylvania economist Hanming Fang cited research that shows every 1 percent increase in US imports from China reduces US prices by roughly 1.9 percent. According to analysis by Barclays Investment Bank, Chinese electric vehicles - benefiting from lower-cost batteries, mature supply chains, economies of scale and vertically integrated production - cost nearly 40 percent less than those from overseas automakers, making green technology more accessible globally.

Contributing to a more balanced global economy

More broadly, China's growth is helping rebalance the global economy in several ways.

First, China's smart manufacturing sector has diversified global supply chains and provided more affordable alternatives for developing countries. For instance, Chinese telecommunications companies are delivering high-quality, cost-effective and reliable network infrastructure worldwide. In Africa alone, Chinese firms have laid over 200,000 kilometers of fiber-optic cables, serving over 900 million people and helping to bridge the digital divide.

Second, trade with China has strengthened the export capabilities of many developing economies. With over 1.4 billion consumers, China has become the largest export destination for many trading partners. By 2024, ASEAN exports of steel and non-ferrous metals to China had more than doubled compared to 2019, while shipments of agricultural products, food and beverages, and mineral fuels all experienced growth exceeding 50 percent.

Third, China's modernization offers a valuable frame of reference for other developing nations. While Western modernization has largely followed a linear path, latecomer countries must navigate simultaneous transitions - including industrialization, urbanization, digitalization and green development. Having undergone a comprehensive cycle of industrial transfer, upgrading and relocation, China has amassed experience that directly addresses the needs and challenges faced by other developing countries, and is willing to share this experience with other Global South countries. 

A strong commitment to green development

China has demonstrated robust commitment to addressing climate change by establishing the world's largest and most rapidly expanding renewable energy system. As of July 2025, non-fossil energy constituted 60.8 percent of China's total installed power capacity. In 2024, renewable energy generation reached 3.46 trillion kWh - approximately one out of every three kilowatt-hours consumed nationwide was sourced from clean power.

On September 24, China announced its new Nationally Determined Contributions (NDCs): By 2035, net economy-wide greenhouse gas emissions will be cut by 7-10 percent from its peak level. Non-fossil energy will make up over 30 percent of total energy consumption. Installed wind and solar capacity will be more than six times the 2020 level, with an aspirational target of 3.6 terawatts. 

Forest stock will exceed 24 billion cubic meters. New-energy vehicles will become the mainstream of new sales. China's emissions trading system will cover key high-emitting industries. A climate-resilient society will be essentially put in place.

Compared with China's NDC submissions in 2015 and 2020, this update is a step change. For the first time it covers the entire economy and all greenhouse gases - not just carbon dioxide - signaling a shift from single-sector carbon control to economy-wide governance, and from carbon mitigation alone to broader, sustainable development goals.

In light of the above analysis, the "China Shock 2.0" narrative proves to be not only misleading but dangerously myopic, as it blinds us to the transformative structural shifts which are reshaping the global economy and forging a credible path to a sustainable future.

The author is an observer of international affairs. opinion@globaltimes.com.cn