China has been engaged in global economic competition for decades, and it is now approaching first place in terms of GDP while already setting the tone in strategic markets — from carbon-free energy and battery storage to electric vehicles. Its 5% growth in 2025 surpasses global growth (3.2%), US growth (2.2%), and European growth (1.4%), while the country concentrates more than 30% of global manufacturing output.
Abstract
- China leads global manufacturing with over 30% of world output, dominates key sectors including solar panels, batteries, and electric vehicles, and recorded a record trade surplus of one trillion euros in 2025. Its 5% GDP growth outpaces most major economies, while patent filings and advances in AI and humanoid robotics signal continued technological ambition.
- Beneath these headline figures, structural tensions persist. Overcapacity, a deflating real estate sector, and a widening gap between coastal and interior economies create significant domestic pressures. A high household savings rate and weak consumer demand constrain rebalancing efforts, presenting both opportunities and strategic risks for regional business partners in ASEAN and Thailand.
China’s trade surplus reached a record one trillion euros in 2025, and the country now accounts for 20% of global exports. For businesses across Southeast Asia and Thailand, these are not abstract statistics — they define pricing, supply chains, and competitive dynamics across virtually every sector.
Yet behind these headline figures lie deeper structural realities that investors and business leaders in the region would do well to understand.
The Long March to Industrial Domination
China’s industrial ascent since the late 1970s has produced an independent, fully integrated industrial system of remarkable depth and scale. The numbers speak for themselves:
- China produces 70% of the world’s solar panels
- 80% of batteries sold globally are manufactured in China, with 90% of the materials sourced domestically
- Half of all 100% electric vehicles worldwide are made in China
- 90% of civilian drones sold globally come from Chinese factories
- China controls more than 90% of the global vitamin C market, a critical food additive
In 2024, China filed 1.8 million patent applications worldwide — more than three times the US figure of 501,831 and four times Japan’s 419,132.
For ASEAN economies, including Thailand, these figures reinforce China’s position as both an indispensable supplier and an increasingly direct competitor in advanced manufacturing.
Artificial Intelligence and the Robotics Frontier
Chinese leaders have made no secret of their ambitions in artificial intelligence. The launch of DeepSeek V4 — a 1.6 trillion parameter open-source model costing seven to nine times less to run than its American competitors, and built on Huawei’s domestically produced GPU chips — sent a clear signal to global markets.
China is pursuing a dual innovation model: entrepreneurial AI driven by universities and start-ups on one hand, and a Party-State-directed ecosystem where civilian and military capabilities reinforce each other in semiconductors, aeronautics, telecommunications, and AI on the other.
Humanoid robotics is the next frontier. China’s Ministry of Industry and Information Technology has identified humanoid robots as the next disruptive industrial product after computers, smartphones, and electric vehicles. Unitree, the Chinese market leader, delivered approximately 5,500 bipedal humanoid robots in 2025 and expects sales of 10,000 to 20,000 units in 2026. In April 2026, a Chinese humanoid robot completed a half-marathon in Beijing in under 51 minutes — faster than any human on record.
China and the Rest of the World: The New Silk Road Effect
Through its Belt and Road Initiative launched in 2013, China has steadily secured markets and raw material supplies across Asia, Africa, Europe, and Latin America via bilateral partnerships. For Thailand and ASEAN more broadly, this commercial expansion is not a distant geopolitical abstraction — Chinese capital, Chinese platforms, and Chinese supply chains are woven into the regional economy.
This commercial hegemony extends to digital technologies and operates through networks of influence that are as powerful as they are discreet. The strategy, critics argue, creates structural dependencies through unbeatable price competitiveness backed by state subsidies across entire industrial sectors.
The question for the region is whether that dependency deepens or whether the shift in trade policy in Europe and the United States accelerates a rebalancing — and where ASEAN positions itself within that realignment.
The Other Side of the Chinese Economy
China’s growth story has a less visible side that shapes the risks for regional partners and investors.
While GDP growth regularly exceeded 10% before 2010, it has declined steadily since 2011, reaching 5% in 2025. Since the COVID-19 pandemic, the economy has been weakened by disinflation driven by overcapacity across multiple sectors — agri-food processing, textiles, steel, clean energy, and automotive manufacturing, which is operating at only 50% of capacity. Factory closures in building materials and furniture have accelerated since the deflation of the real estate bubble from 2022.
The result is a tale of two economies: a coastal China of 500 million people where salaries and living standards are comparable to Western countries, and an interior economy of more than 800 million people living in developing regions with significantly lower incomes — including factory workers at BYD earning as little as USD 1.49 per hour.
The Employment Paradox
Perhaps the most underappreciated structural challenge is the jobs gap. As digital processes and automation displace workers, China must simultaneously create 12 million new jobs annually for rural migrants and young graduates. Analysis by the Rhodium Group finds that for the same sales value, traditional sectors generated six times more employment than the emerging advanced technology industries now being championed by Beijing.
Young Chinese are pushing back. The “996” work culture — 9am to 9pm, six days a week — is increasingly rejected by a younger generation that prefers shorter hours and lower consumption. The 2026–2030 five-year plan acknowledges this social malaise, but stimulating domestic demand and consumer confidence cannot be decreed, as the failure of the 2024 stimulus package demonstrated.
The household savings rate of 35% reflects not prosperity but anxiety — about retirement, healthcare, and a welfare state far less generous than those in developed economies. This structural caution on consumption remains a brake on the domestic demand that China urgently needs to rebalance its economy.
What This Means for Business in Thailand and ASEAN
China’s technological dominance presents ASEAN businesses and investors with a dual challenge: capitalising on the cost advantages and supply chain depth that Chinese industry offers, while building resilience against the strategic dependencies that come with it. As Washington and Brussels accelerate their own industrial policies, Southeast Asia finds itself at the centre of a global realignment in technology, trade, and investment flows.
The trajectory is clear: China will continue to invest aggressively in AI, robotics, green energy, and digital infrastructure. For Thailand — a regional manufacturing hub navigating its own industrial upgrade — understanding the full picture of Chinese technological power, including its internal contradictions, is not optional. It is essential.
Sources: Rhodium Group (2026), OECD Economic Outlook Vol. 2025 Issue 2, IEA Global EV Outlook 2025
