China faces an asymmetric playing field — the U.S., Europe, Russia, Japan, and India can trade sensitive technologies among themselves, but China is systematically excluded. This creates a global industrial ecosystem where China is now the world’s sole manufacturing superpower.
The Manufacturing Superpower Asymmetry
Richard Baldwin’s observation is striking: China now produces more than the next nine manufacturing powers combined, a concentration of productive capacity unparalleled in modern history[1]. Unlike Britain in the 19th century, whose industrial supremacy rested on textiles, steel, coal, and shipbuilding but never reached such a scale relative to its rivals, China’s dominance extends across a broad array of sectors. Similarly, the United States in the mid-20th century approached comparable dominance, producing nearly half of the world’s manufactured goods in the aftermath of World War II. Yet that was a period when much of Europe and Japan lay in ruins, providing the U.S. with a unique, largely uncontested advantage.
China’s industrial hegemony today, by contrast, emerges in a context of thriving global competitors. Its position is not the result of devastation elsewhere but is built on sheer scale, labor mobilization, deliberate industrial policy, and deep integration into global value chains. The country has leveraged these factors to achieve a level of productive concentration and global influence unmatched by any nation in peacetime history. In doing so, China represents the first industrial superpower whose dominance is grounded in competitive integration rather than external destruction, reshaping the global economic landscape in both scope and scale.
Asymmetric Playing Field: The Lock-Out
China’s status as the world’s sole manufacturing superpower carries a profound paradox. While the United States, Europe, Japan, Russia, and even India freely circulate sensitive technologies among themselves through consortia, joint ventures, and defense-industrial alliances, China is systematically excluded from these networks. It is barred from participation in initiatives such as the International Space Station, pre-Wassenaar high-tech flows under COCOM, advanced semiconductor equipment ecosystems like ASML lithography, and increasingly, cutting-edge AI and quantum collaborations. This exclusion is not incidental but structural, reflecting a deliberate partitioning of global technological governance.
As a result, China occupies a unique yet constrained position in the world-economy. It dominates the midstream of global production, supplying assembly, intermediate goods, and low- to mid-tech products, yet it remains denied access to upstream inputs—high-end chips, aerospace-grade engines, and advanced lithography—that underpin technological leadership. In world-systems terms, China functions as the industrial base of the global economy, sustaining the productive backbone of the world, while simultaneously being treated as a semi-peripheral “outsider” in the governance of critical technologies. This asymmetry underscores a fundamental tension: China’s manufacturing might is unmatched, yet its access to the frontier of innovation is deliberately circumscribed.
The Structural Burden of Being Alone
China’s industrial ascent carries a unique structural burden: unlike other advanced industrial powers, it cannot rely on shared networks of technological development. In much of the world, projects such as Boeing’s aircraft programs, Airbus, the Ariane rocket, and the F-35 fighter jet involve dozens of countries pooling expertise, capital, and supply chains. These multilateral ecosystems allow industrial powers to distribute costs, accelerate innovation, and mitigate risks collectively. China, by contrast, faces systematic exclusion from these Western-led consortia and must therefore replicate entire industrial and technological ecosystems domestically. This isolation fundamentally shapes the pace, cost, and nature of its industrial development.
The historical consequences of this structural isolation are evident in major Chinese projects. The Y-10 aircraft, for instance, failed in part because China lacked a fully networked supply chain capable of supporting the complex interdependencies of modern aviation. Its successor, the C919, is making incremental progress, but only through painstaking substitution of each foreign supplier, a process that requires immense technical effort and careful project management. The Tiangong space station stands as another striking example: built entirely alone, without the benefit of multilateral partnerships that underwrite comparable programs elsewhere, it underscores China’s capacity to achieve technological milestones independently, albeit at higher cost and over longer timelines.
This enforced autonomy has profound implications. China’s industrial rise is inevitably slower and more resource-intensive than that of powers integrated into global technological networks. Yet, the very necessity of building systems from the ground up fosters an unparalleled degree of self-reliance. By shouldering the full weight of innovation, China gradually accumulates indigenous capabilities across sectors, laying the groundwork for industrial sovereignty. In this sense, the structural burden of being excluded has paradoxically become a source of strategic resilience: the very isolation that once limited progress now compels the creation of independent ecosystems capable of sustaining long-term technological leadership.
Industrial Gravity and Global Dependence
Paradoxically, while China is systematically excluded from key international technology networks and industrial consortia, the global economy remains heavily dependent on its manufacturing capacity. China now contributes over 30 percent of global manufacturing value added, a scale that is difficult to overstate. Its dominance spans critical sectors such as rare earths, solar panels, batteries, shipbuilding, textiles, and electronics assembly. This concentration of production capacity means that even where the United States, Europe, and other industrialized nations seek to reshore supply chains or rely on “friendshoring” strategies, they remain unable to substitute China’s output in the short term.
The structural asymmetry creates a paradoxical dynamic: the world is strategically dependent on a country that it simultaneously seeks to exclude. China’s unparalleled scale and efficiency in producing intermediate goods and key components render decoupling practically impossible without significant disruption to global supply chains. This interdependence underscores a fundamental tension in contemporary geopolitics and industrial strategy: while access to China is often politically contested, the global economy cannot function smoothly without it. The result is a delicate balance in which China, despite technological and diplomatic isolation, wields immense influence through sheer industrial gravity.
The Core–Periphery Tension
China’s position within the global economic system is both complex and evolving, reflecting a paradoxical status when viewed through Wallerstein’s World-Systems Theory and Arrighi’s analysis. Historically, during the Mao era, China was firmly in the periphery, largely isolated from international industrial networks and heavily dependent on foreign technology. Following the post-1978 reforms, China began its rapid industrialization and integration into global trade, moving into the semi-periphery. Today, China occupies a hybrid position: it is the industrial workshop of the world—a role traditionally associated with core countries—while simultaneously remaining excluded from the governance of high-end technologies and international consortia, particularly in sectors such as semiconductors, aerospace, and advanced financial services. This duality—core in production but semi-periphery in control—creates a structural tension that shapes both its domestic policies and its geopolitical strategies.
In practical terms, China exhibits core-like characteristics in many areas of advanced manufacturing and technological innovation. It leads in electronics, AI, 5G, and renewable energy, and its global initiatives, such as the Belt and Road Initiative, reflect growing influence in finance and infrastructure across multiple regions. At the same time, it faces enduring semi-periphery constraints, including reliance on foreign suppliers for critical high-end technologies and uneven domestic development across regions. These limitations underscore that China, while highly influential in production and investment, has not yet achieved the fully autonomous technological and institutional capacities that define classical core countries like the United States, Germany, or Japan.
This core–semi-periphery contradiction underpins much of the current geopolitical friction. The United States seeks to maintain its technological dominance, while China strives to overcome strategic chokepoints in semiconductors, aerospace, and AI, signaling an effort to ascend the hierarchy of global technological governance. Scholars increasingly recognize that China’s semi-periphery status is dynamic and evolving; the country demonstrates that upward mobility within the world-system is possible, challenging the rigid dichotomy between core and periphery in Wallerstein’s original formulation. Its experience illustrates that a nation can simultaneously occupy a central role in global production while striving to expand its control over high-end technological and institutional domains, reshaping the contours of the contemporary world-system.
Historical Analogy: The U.S. in the 19th Century
A useful historical analogy for understanding China’s current technological trajectory is the experience of the United States in the late nineteenth century. At that time, Britain sought to restrict American access to advanced machinery, skilled engineers, and critical designs, attempting to maintain its industrial supremacy. Despite these barriers, the United States leveraged its vast internal market, abundant natural resources, and resilient institutional framework to build a robust, independent industrial system. American inventors, engineers, and entrepreneurs, such as Edison, Tesla, Westinghouse, and Bell, demonstrated remarkable ingenuity, often reverse-engineering foreign technologies or developing entirely novel solutions. Knowledge still diffused into the U.S. through immigrants, patent filings, scientific publications, and informal channels, ensuring that technological progress continued even under restrictive conditions.
Protectionist policies played a crucial role in nurturing domestic industry. Tariffs and government incentives, far from stifling innovation, provided the U.S. with the economic space to develop homegrown capabilities. Over time, these factors allowed the United States not only to catch up to Britain but to surpass it in many industrial sectors by the early twentieth century. The combination of market scale, resource endowments, human capital, and institutional support created a dynamic environment where domestic innovation could flourish despite deliberate attempts by a dominant foreign power to constrain it.
China today faces a similar set of challenges and opportunities. Western countries, particularly the United States, have imposed export controls and restrictions on semiconductors, advanced AI chips, and high-end manufacturing equipment with the intention of slowing China’s technological advancement. Yet China possesses a massive industrial base, extensive research and development infrastructure, and a vast domestic market, providing it with structural advantages akin to those that supported U.S. industrial growth in the nineteenth century. Chinese universities, research institutes, and firms are increasingly capable of developing indigenous alternatives to restricted technologies, and learning-by-doing, reverse engineering, and incremental innovation allow the country to adapt and improve upon both domestic and limited foreign inputs. State-directed programs, such as “Made in China 2025” and targeted chip subsidies, further accelerate capability building in strategic sectors, echoing the protective and supportive role of nineteenth-century U.S. policy.
Just as Britain’s attempts to embargo the United States could not prevent it from rising to technological prominence, modern export controls and restrictions are unlikely to halt China’s long-term technological ascent. While such measures may temporarily slow progress, China’s combination of scale, innovation networks, institutional support, and strategic investment provides it with the tools to build parallel technological ecosystems. Over the long term, these factors suggest that China, like the United States a century ago, can convert external constraints into an opportunity for self-reliant development and sustained industrial advancement.
The Strategic Paradox Going Forward
China faces a profound strategic paradox as it navigates the evolving global industrial and technological landscape. Its immense scale and productive capacity mean that it cannot be contained indefinitely; the sheer gravity of its economy draws other nations into its orbit, creating structural dependencies that are difficult to avoid. At the same time, pursuing a largely autonomous path imposes significant costs, particularly in the realms of innovation and advanced technology, as China must replicate, internalize, and indigenize systems that Western powers often share freely among themselves. The tension between being too large to ignore and too isolated to rely on external innovation defines the strategic challenge confronting China today.
For the West, attempts to exclude China from high-tech networks and advanced industrial consortia may slow its climb up the value chain, yet these measures have unintended consequences. By forcing China to internalize critical knowledge and develop independent technological ecosystems, exclusion accelerates domestic capability building, thereby reducing the long-term leverage that other powers might hope to exert. The result is an emerging bifurcation of the global industrial order: one network centered on the United States, Europe, Japan, and India, characterized by cooperative high-tech production and shared innovation, and a separate, China-centered ecosystem linked to the Belt and Road Initiative and South–South partnerships. This is not the era of China as the “workshop of the world,” as in the 1990s and 2000s, but the rise of China as the world’s only full-spectrum industrial state.
This transformation underpins China’s dual circulation strategy, which seeks to strengthen domestic resilience while leveraging international integration. The strategy simultaneously reduces China’s dependence on G7 and other developed nations and increases their dependence on China, effectively creating reciprocal economic leverage. By keeping the Chinese economy open to foreign companies—the “great international circulation”—while reinforcing its domestic market—the “great domestic circulation”—China ensures that its economic partners become reliant on its market even as it consolidates its own internal capacity. In doing so, the strategy positions China to navigate global technological and geopolitical constraints, allowing it to pursue high-value innovation internally while maintaining a central role in the global economy.
Over time, this dual approach may reshape global industrial dynamics, as China becomes both an indispensable market and a self-sufficient technological hub. While Western powers seek to limit China’s influence, the internalization of critical capabilities may ultimately reduce external leverage, making containment increasingly costly. The resulting industrial bifurcation points to a world in which two parallel systems coexist: a cooperative high-tech network anchored in the West, and a China-centered autonomous ecosystem, each with its own technological standards, supply chains, and spheres of influence. The strategic paradox is thus systemic: China’s scale guarantees relevance, but its enforced autonomy compels innovation and self-reliance, reinforcing its position as a full-spectrum industrial power while reshaping the architecture of global production.
Conclusion
Richard Baldwin highlights a historic uniqueness: China today possesses a fully developed industrial system of unmatched scale. At the same time, it is systematically excluded from the collaborative high-tech networks that bind the established industrial core. This creates a paradoxical situation in which China is both essential and marginalized — the world’s only manufacturing superpower, yet denied the inclusion and acknowledgment typically granted to dominant industrial powers.
References:
[1] “China is the world’s sole manufacturing superpower: A line sketch of the rise”,Richard Baldwin, 17 Jan 2024, https://cepr.org/voxeu/columns/china-worlds-sole-manufacturing-superpower-line-sketch-rise