Caixin
Dec 16, 2023 10:30 AM
WEEKEND LONG READ

Weekend Long Read: Lessons From China’s Push to Go Global

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Zhou Qiren, senior professor of economics at Peking University’s National School of Development, speaks at one of the sessions at the 14th Caixin Summit on Nov. 9 in Beijing. Photo: Caixin
Zhou Qiren, senior professor of economics at Peking University’s National School of Development, speaks at one of the sessions at the 14th Caixin Summit on Nov. 9 in Beijing. Photo: Caixin

In 2017, I coined the term “breakout theory,” which suggested that China’s economy was encircled. The question that remained was whether it could break out.

At the time, global competition looked something like a sandwich. On top, there were the countries that controlled original technologies and products, giving them unique competitive advantages. At the bottom, there were the emerging market economies with more competitive cost advantages. And stuck in the middle, struggling to ascend or descend, were numerous companies in China, where early reforms and years of rapid growth no longer conferred a cost advantage. These companies found it difficult to compete both with the low-cost rivals below them, and the innovative firms above them. They made the rapid-growth that China had become used to no longer tenable.

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