China’s 90% Model: How Beijing reshapes US industries
China’s 90% Model: How Beijing reshapes US industries
A new book warns Beijing’s strategy builds massive capacity, undercuts via currency, and reshapes global trade, impacting American manufacturers.
China, the largest economy in Asia, has evolved into a global manufacturing powerhouse. A new book explains a strategy Ram Charan describes as the '90% Model' that, he argues, shows how Beijing built vast industrial capacity while steering currency policy to boost exports. The model centers on creating enough capacity to meet about 90% of global demand in a targeted sector, then undervaluing the currency and flooding markets with subsidised exports to overwhelm rivals.
Charan argues this approach has already hollowed out multiple industries in the United States and points to a wide range of sectors where the playbook has made an impact—apparel, furniture, toys, consumer electronics, basic chemicals, rare earth processing, pharmaceutical ingredients, telecom infrastructure, lithium batteries, and solar panels—while signaling new targets in automobiles, defence, semiconductors, critical minerals, pharmaceuticals, chemicals, and telecom.
The veteran adviser emphasizes that almost all high-quality, high-tech manufacturing capacity was built in the last decade, financed by trillion-dollar trade surpluses sustained through currency manipulation. He suggests that return on capital is not the driving force; the objective is to capture market share and tilt the global competitive landscape in favor of Beijing’s producers.
For CEOs and policymakers, the book reads as both a warning and a guidance manual. It prompts US leaders to rethink production incentives, supply chains, and the protection of strategic industries, while urging corporate decision-makers to reassess markets and competitive strategies in a rapidly shifting global economy. The overarching message: as China scales new heights in capacity, the United States faces a pivotal moment to defend its manufacturing base and adapt its trade playbook.
