China using state power to tighten global supply chain dominance: Report

New Delhi [India], May 17 (ANI): China is expanding state support beyond key sectors such as electric vehicles, semiconductors and clean energy, and extending industrial policy across almost every part of its economy, according to a report by the US Chamber of Commerce.
The report said that this shift is strengthening China's position in global manufacturing and deepening the world's dependence on Chinese supply chains.
The report, titled "China's Next-Generation Industrial Policy", said Beijing is "doubling down" on state-led economic intervention instead of retreating amid domestic and international pressures.
"China's industrial strategy is evolving in two significant ways. First, it is becoming more systemic and pervasive, extending across all layers of production, from upstream inputs and industrial equipment to downstream applications, services, and frontier technologies," the report said.
The report warned that the new phase of China's industrial strategy is accelerating "trade dominance", increasing "foreign dependencies on Chinese supply chains", and helping Chinese firms rapidly expand in global markets.
According to the report, China's earlier industrial strategy under the "Made in China 2025" programme had already helped the country reduce import dependence and strengthen its position in sectors such as electric vehicles and communications equipment.
"A comprehensive assessment commissioned by the U.S. Chamber... confirmed that outcomes tracked the original ambitions to a striking degree," the report noted.
"China made substantial progress in reducing import dependencies, displacing foreign firms in domestic markets, and building globally competitive positions in sectors ranging from new energy vehicles to information and communications equipment," the report added.
The report said China is now extending policy support across mature industries, critical minerals, industrial machinery, artificial intelligence, quantum technology and future energy systems. It added that Beijing is not cutting industrial capacity despite overcapacity concerns, but instead pushing firms to lower costs and gain more global market share.
"Even in mature industries facing overcapacity and severe price pressures, Beijing is providing continued support and pushing firms to upgrade production technologies to gain market share and lower production costs, rather than cutting capacity," the report said.
The report also highlighted China's growing focus on artificial intelligence and frontier technologies, saying the country is using government-owned enterprises and public procurement to create large-scale demand for new technologies.
"AI has emerged as a central pillar, but the broader pivot to demand creation represents a step change in the leadership's willingness to fund commercialisation of cutting-edge technologies," it said.
The report further stated that China's manufacturing trade surplus has nearly doubled since 2019 to around USD 2 trillion, driven by strong exports and import substitution.
It added that China's dominance is increasingly moving beyond finished products into upstream manufacturing segments such as chemicals, machinery and industrial equipment -- areas traditionally led by advanced economies.
According to the report, the number of products where China accounts for more than half of global exports nearly doubled between 2021 and 2024, rising from 192 products to 315 products.
The report warned that advanced economies could face long-term erosion in manufacturing competitiveness if current trends continue.
"In aggregate, up to USD 650 billion -- equivalent to around 12 per cent of G7 manufacturing exports -- could be directly exposed to Chinese market share gains by 2030 if they continue at the current pace," the report said.
It also cautioned that global responses remain "fragmented and largely uncoordinated", while the "window for effective policy response is narrowing." (ANI)