A Bloomberg report on Saturday claimed China, citing Goldman Sachs economists, is squeezing developing nations by dominating both low- and high-tech manufacturing. The article bluntly characterizes China’s strategy as a “beggar-thy-neighbor” threat to the global economy.
Dressed up in the language of data and economics, this narrative is less a neutral assessment and more a repackaged version of the old “China manufacturing threat” storyline.
Its political intent is hard to miss: to recast China not only as a challenger to the US and Europe, but also as a spoiler of other developing countries’ prospects – thereby justifying a broader coalition in support of decoupling policies against Beijing.
For years, parts of the Western commentariat have relied on zero-sum thinking to explain China’s rise.
A decade ago, the refrain was that China had “stolen American blue-collar jobs.” Today, the script has been updated: China is now supposedly “stealing” Africa’s industrialization, Southeast Asia’s export growth and Latin America’s development space.
The claim that “China is crowding out other developing countries” is simply another layer of rhetorical wrapping around a broader strategy of “de-risking from China.”
The problem is that this story does not hold up against the facts. In recent years, Chinese outward direct investment and industrial cooperation have expanded rapidly. Chinese companies have established industrial parks and production bases in Vietnam, Indonesia, Mexico, Egypt, Ethiopia and many other countries, bringing not just capital and equipment, but also technology, management expertise, and, crucially, jobs.
Across Africa, Southeast Asia, the Middle East and Latin America, Chinese-built railways, ports, power plants and telecom networks are providing critical infrastructure that many countries had long lacked.
The statement that China is “taking its industries abroad” is much more accurate than saying it is “clinging to low-end manufacturing at home.”
Key segments of Chinese-linked industrial chains are being reconfigured across borders. Many emerging economies are actively drawing on elements of China’s development experience to upgrade their own manufacturing. Through this kind of chain extension, developing countries can plug into global production networks more quickly by leveraging Chinese capacity, while also exporting more in complementary sectors. That is a pathway to faster industrialization, not a roadblock.
This is what the West is most worried about: The development of manufacturing in more developing countries will ultimately shake the West’s dominance in more fields.
It is not a result of Chinese competition, but of the long-standing division of labor dominated by advanced economies and the resurgence of protectionism in the West. For decades, a small group of rich countries has controlled key technologies, standards and financial rules, keeping high-value, high-margin activities at home while offloading labor-intensive and resource-intensive segments abroad. Many developing economies have been stuck at the bottom of global value chains as a result.
Now, under the banners of “national security” and “de-risking,” the US and some of its allies are erecting new tariff and technology barriers, championing “friendshoring” and building “small yards and high fences” to restructure supply chains in ways that explicitly sideline China and, in practice, also limit the policy autonomy of many Global South countries. Western efforts to “contain China” are increasingly being projected into the wider developing world, seeking to weaken trade and industrial ties between these countries and China. That is what a genuine beggar-thy-neighbor strategy looks like – and it is a more credible explanation of who has historically taken the “jobs and opportunities” of the developing world.
China, by contrast, has sought to offer an alternative through initiatives such as the Belt and Road Initiative and the Global Development Initiative – built on principles of extensive consultation, joint contribution and shared benefits. This approach does not pretend that there are no interests at stake; instead, it recognizes that sustainable cooperation is in all parties’ long-term interest and that development rights should be more equally shared.
China’s development has never been an isolated success story. It has unfolded alongside, and increasingly in partnership with, the broader developing world. Sharing opportunities, supporting partners and contributing to global growth through concrete actions, not slogans, is the strongest possible response to any “China threat” narrative. GT
