In response to growing rhetoric from the West over the so-called China Shock 2.0, experts say this narrative serves primarily as a political shield for protectionist policies rather than an objective economic assessment. They warn that such framing could undermine the multilateral trading system and drive up global costs. Rather than viewing China’s industrial advancement with hostility, those nations should instead adopt a more sophisticated collaborative mindset, leveraging China’s robust supply capabilities to generate shared global benefits, experts urged. During the three-day G7 Summit, European Commission President Ursula von der Leyen said, without naming China directly at first, that “some countries produce too much and do not consume enough”, claiming it has been “increasingly dangerous for the stability of the global economy”. She then explicitly singled out China, labeling its trade surplus with the European Union “unsustainable”.
Her remarks mirror the “China Shock 2.0” narrative that has been gaining traction. Last month, the Center for European Reform, a Europe-based think tank, published a report claiming that “a new China Shock is reverberating across global goods markets”. During the G7 Summit, many Western media outlets also leveraged this narrative to justify trade policies targeting China.
Jian Junbo, Director of the Center for China-Europe Relations at Fudan University’s Institute of International Studies, pointed out that the “China Shock” narrative largely focuses on the alleged trade imbalances, specifically concerning China’s goods trade surplus with the West. Sun Chenghao, Director of the U.S.-Europe Program at Tsinghua University’s Center for International Security and Strategy, noted that the recent Western hype around the so-called China Shock 2.0 is in essence a political construct. “It layers together Western anxieties over lost industrial competitiveness, the rising costs of a green transition, and a broader strategic competition with China. They reframed these issues into a ‘security threat’ narrative, repackaging for public consumption.”
The original “China Shock” thesis, coined by Western economists, alleged that China’s post-WTO export boom disrupted U.S. labor markets. Sun said that the underlying logic of the current version hasn’t changed much. “Both versions externalize the internal challenges of Western economies – industrial restructuring, income inequality, and technological competitive pressures – and blame them on Chinese manufacturing.”
Tu Xinquan, Dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, agreed. He said the so-called China Shock is simply a natural outcome of market economics and competition. “Developed countries have grown accustomed to holding the technological upper hand for decades,” Tu said. “Now, when they face a real competitor, they seem reluctant to embrace the free market principles they’ve preached for decades.” Far from being a detriment, experts said that China’s industrial upgrading, which offers high-tech products at lower costs, is a boon for the global economy, enhancing world productivity and welfare.
James Pethokoukis, Senior Fellow at the American Enterprise Institute for Public Policy Research, a Washington-based think tank, highlighted this positive impact in a December article. He noted that while China’s rapid growth reduced the U.S.’ share of the global GDP, it simultaneously helped U.S. consumers by making a wide range of goods cheaper to buy and easier for U.S. companies to produce. The U.S., he concluded, became “absolutely richer” even as it appeared “relatively smaller, economy-wise”. “China’s massive, integrated production capacity, combined with intense domestic competition, allows it to produce high-tech goods at remarkably low cost,” said Tu. “This, in fact, benefits the entire world, as it significantly lowers product prices, thereby enhancing their accessibility and affordability. This is particularly evident in renewable energy products, including solar power, wind energy, and electric vehicles.”
Official data shows that Chinese wind turbines, solar panels, and new energy vehicles (NEVs) are exported to over 200 countries and regions globally, driving down global wind and solar power generation costs by over 60% and 80%, respectively. Sun warned that the West’s pan-securitization of normal industrial competition would, in the long run, escalate global production costs, diminish consumer welfare, fragment supply chains, and further erode the WTO-centered multilateral trading system. Experts advocate a more rational and objective perspective on China’s industrial and economic development, urging exploration of international cooperation for global prosperity. Jian from Fudan University said: “What they call a shock is really just competitive pressure, which is inherently beneficial for the growth and prosperity of the global market.” Blocking such normal competition, he argued, would be detrimental to overall economic development, the China Daily reports.
