Illustration: Liu Xidan/GT

A cylindrical battery plant operated by a South Korean company in Nanjing, East China's Jiangsu Province, has returned to full-capacity operations, according to the Yonhap News Agency, which some analysts take as a sign that expectations for industry growth are firming. The episode sits within broader dynamics linking regional supply chains and the Chinese market, and provides a useful entry point for looking at how foreign manufacturers adjust to changes in demand amid China's industrial development.

At a broader level, South Korea's exports to China, together with South Korean corporate investment, point to a wider pattern of industrial interdependence. China's imports from South Korea reached $110.87 billion in the first five months, up 56.5 percent year-on-year, according to China's General Administration of Customs.

China has become a destination for a wide range of South Korean industrial components. Semiconductor exports have drawn particular attention, as they are reported to have been a major contributor to South Korea's overall export growth. These components, including chips and other intermediate goods, enter China's production supply chains, where some are absorbed into domestic manufacturing and consumption, and some are incorporated into goods that are later re-exported to global markets.

These developments, taken together, form part of the day-to-day interaction between global supply chains and the Chinese market. The interaction is continuous, taking place frequently across sectors.

The interaction between South Korean and Chinese supply chains is only one element of this wider picture. Similar dynamics are evident elsewhere. According to the Mission of China to the European Union, European companies with local operations in China not only supply products to the Chinese market but also export approximately 40 percent of their output to Europe and other parts of the world. Alongside other examples, this points to closely linked global production networks.

In recent years, China's industrial development has advanced rapidly, with gains in areas such as electric vehicles (EVs). This has contributed to export growth. But at the same time, the expansion has generated substantial demand for intermediate goods and components, creating opportunities for enterprises, including foreign-invested firms, as well as for exports to China. According to the Xinhua News Agency, China's imports of manufactured intermediate goods increased by nearly 40 percent in the first five months.

This creates an interesting feedback loop. China's industrial development supports export growth in certain sectors, while also generating import opportunities through demand for intermediate goods and components, alongside rising domestic consumption associated with industrial upgrading. On a broader level, this reflects both China's continued opening at a higher level and the increasingly dense interconnections of global supply chains, shaped by the international division of labor and the underlying forces of globalization.

Some international commentary has sought to frame China's exports as a "shock," while overlooking the opportunities embedded in China's role within global supply chains. That framing is detached from the basic reality of deeply interconnected global production networks.

It has long been noted that in a mature system of global production, many final goods are the outcome of supply chains spread across multiple economies. 

In recent years, China's trade in intermediate goods has continued to expand, providing strong support for global industrial cooperation. As of 2025, China had remained the world's largest exporter of intermediate goods for 12 consecutive years.

This is reflected in both China's imports and exports. China is increasingly described as a "factory of factories." According to the China Youth Daily, the share of intermediate goods in China's exports rose from 41.9 percent in 2017 to 47.4 percent in 2025. A commentary published previously by the People's Daily noted that through intermediate goods trade and cooperation within global industrial chains, Chinese manufacturing has helped drive worldwide technological advancement and industrial upgrading. Meanwhile, demand from China's manufacturing sector for chips and other components has also promoted rapid development and upgrading in industries such as integrated circuits.

Returning to the cylindrical battery mentioned at the outset, a component linked to EV production, it provides a micro-level lens through which to view the broader dynamics of China's supply chains and the opportunities embedded within them. These opportunities are part of the wider interconnections of global supply chains and are likely to expand further as China continues to deepen its opening-up.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn