Arkebe Oqubay PROVIDED TO CSST

Workers rush to complete a batch of inflatable paddle boards at a production workshop in Lianyungang, Jiangsu Province, July 31. Photo: VCG

The “China Shock 2.0” narrative has gained currency in Western debate, featuring in European Commission President Ursula von der Leyen’s annual State of the European Union address on September 16. Its politicization of trade and economic issues has drawn criticism and prompted debate among experts and observers worldwide. In a recent exclusive interview with CSST, Arkebe Oqubay, a former senior minister and special adviser to three successive prime ministers of Ethiopia and a British Academy Global Professor at SOAS University of London, argued for reframing “China 2.0” around the shared task of building a greener, fairer world. Drawing on a Global South perspective, he proposed “China Convergence 2.0” as an alternative narrative.

Economic narratives should stick to facts

CSST: The “China Shock” narrative is hardly new. How does “China Shock 2.0” compare with “China Shock 1.0”? To what extent does the “shock” label misrepresent the reality of China’s integration into the global market?

Oqubay: A narrative describing China’s economic rise as a “shock” has become familiar shorthand in mainstream Western media. It was first applied to the manufacturing growth of the early 2000s that led to China’s rise as the world’s manufacturing powerhouse after China joined the WTO. Now extended to electric vehicles, batteries, solar panels, and artificial intelligence, the “China Shock 2.0” framing treats China’s industrial progress primarily as a source of disruption and threat to be managed or contained. From the vantage point of the Global South, and indeed from the perspective of many economies still striving to industrialize, a different reading is possible. China’s trajectory represents not a shock but a convergence: the closing of the gap between the industrialized and the industrializing world, and a source of public goods that a fragmented global economy urgently needs.

The counterfactual embedded in this reasoning—that Western economies would be better off had China not industrialized—rests on a narrow accounting exercise. It isolates the effect of import competition on specific manufacturing communities while setting aside the much larger gains that flowed to consumers, downstream industries and the wider global economy. For decades, China’s manufacturing scale kept consumer goods prices low across advanced economies, effectively subsidizing the purchasing power of lower- and middle-income households in the West. It also supplied intermediate inputs that made other industries more competitive and absorbed capital and technology, generating returns for investors and firms well beyond its borders.

CSST: What are the flaws and limitations in the reasoning behind “China Shock 2.0”? Why should audiences outside China be wary of this narrative?

Oqubay: Economic historians such as Adam Tooze have observed that the prolonged hardship in some deindustrialized regions of the United States and Europe reflects, in considerable part, a domestic policy failure—an absence of adequate retraining, regional investment and redistribution—rather than an inevitable consequence of Chinese competition. Every episode of industrial transition, including those experienced by Britain, the United States, Japan and South Korea in earlier periods, produces localized dislocation; whether that dislocation becomes lasting hardship or a manageable transition largely depends on domestic institutional choice, not an inherent property of trade with a rising economy.

A purely disruption-centered accounting also tends to omit a poverty-reduction dimension. China’s integration into the global trading system coincided with the withdrawal of several hundred million people from extreme poverty—among the largest reductions in material deprivation recorded in human history. A fair evaluation of China’s role in the global economy would need to weigh this global equity dimension alongside the localized costs borne by specific communities in the industrialized world, rather than treating the latter as the whole of the story.

The hazard in the “China Shock” reasoning, then, is not that it identifies real adjustment costs—these are genuine and deserve serious policy attention—but that it generalizes from a partial account to a civilizational verdict on China’s development, and in doing so risks legitimizing policy responses (tariffs, investment restrictions, technology controls) whose costs will ultimately be borne by consumers and by developing countries seeking to replicate China’s catch-up trajectory.

Moving beyond zero-sum mindset

CSST: Some scholars argue that the “China Shock 2.0” narrative stems from anxiety over a changing global order. What insights can economic research offer in assessing this narrative? Does developing a more impartial economic narrative require us to re-examine some fundamental assumptions about economic development and globalization?

Oqubay: Economic catch-up and industrial upgrading—the shift of an economy from low-value to higher-value, higher-technology activity—have long been treated in development economics as the defining achievement of successful late development, from Alexander Gerschenkron’s work on economic backwardness to Albert Hirschman’s account of linkages, and Alice Amsden’s studies of Korean industrialization. When Britain, Germany, the United States and Japan undertook this shift, it was generally understood as a legitimate and even admirable process of catching up. The striking feature of the current moment is that a similar shift by China—from textiles and toys towards EVs, batteries, solar technology and advanced computing—is increasingly described in the vocabulary of threat rather than achievement.

A more desirable scenario, in this light, need not require the abandonment of legitimate competitive concerns, but it would involve rethinking several premises. First, whether upgrading by any nation should be treated as inherently threatening, rather than as a normal—indeed necessary—feature of a functioning open global economy in which more countries can produce sophisticated goods. Second, how established economies might adapt to and draw benefit from an environment of more diffuse technological capability, rather than treating diffusion itself as a loss. Third, how a more equitable and resilient global economic architecture might be built—one in which the terms of trade, technology transfer and industrial policy space are negotiated multilaterally, rather than determined unilaterally by whichever economy currently holds the technological lead.

CSST: China has consistently called for joint efforts to address global challenges and build a better future for humanity. The zero-sum thinking underlying the “shock” narrative hinders such cooperation. How do you view calls to move beyond zero-sum competition and deepen international cooperation?

Oqubay: Climate change, pandemic preparedness and green transition are not challenges that any single economy, however large, can resolve unilaterally. They require the pooling of technology, finance and manufacturing capacity across borders. A zero-sum framing of China’s rise—in which its gains are assumed to automatically constitute other countries’ losses—sits uneasily with these challenges, because it treats the diffusion of low-cost green technology, for instance, as a competitive threat rather than as the kind of global public good that a climate-constrained world requires.

The concept of a community with a shared future for humanity, together with initiatives such as the four global initiatives, can be read as an attempt to articulate cooperative alternatives to zero-sum competition—emphasizing sovereign equality, non-interference and mutual benefit rather than conditionality. Whatever view one takes of these initiatives individually, their underlying logic points to a broader proposition: that the global diffusion of productive capacity, including that of China and other emerging economies, is compatible with and potentially essential to collective progress on shared challenges.

In practical terms, moving beyond zero-sum competition is likely to involve rebuilding confidence in multilateral institutions such as the WTO, expanding channels for technology and knowledge transfer to the Global South, and treating industrial capacity as a resource that can be mobilized for shared objectives such as decarbonization, rather than as an asset to be hoarded or denied to others.

Prospects for Global South

CSST: How do China’s economic transformation and industrial upgrading relate to the broader rise of the Global South? Looking beyond the narrow focus of the “China Shock” narrative, how would you assess China’s economic rise?

Oqubay: For countries seeking to decarbonize without making the green transition unaffordable for ordinary households, affordable Chinese electric vehicles, solar panels and batteries represent something closer to a lifeline. There is also a resilience dimension: diversifying energy and industrial supply away from a narrow set of fossil-fuel-exporting economies reduces the vulnerability of energy-importing countries to the kind of commodity shocks experienced repeatedly over the past decade.

As for technology diffusion more broadly, much of the postwar global technology order has been organized around proprietary control—intellectual property regimes that allow a relatively small number of firms, concentrated in a handful of advanced economies, to set the price and pace at which technology reaches the rest of the world. Insofar as Chinese manufacturing has tended to commoditize and lower the cost of frontier technologies, from solar cells to batteries to certain categories of computing hardware, it has acted in a manner not unlike the effect open-source software has had on proprietary computing. For developing economies seeking to leapfrog stages of industrialization, this access and diffusion effect matters considerably.

The more productive framing may not be “China Shock” but something closer to convergence: a structural catch-up process that, like earlier waves of industrialization, generates real adjustment costs for specific communities, yet—managed through better domestic policy and more genuinely multilateral global institutions—offers the world a broader and more equitably shared route towards a greener and more resilient economy. Hence, “China Convergence 2.0,” rather than “China Shock 2.0,” seems a sensible interpretation.

Edited by YANG XUE