1. The World Economic Forum’s Global Risks Report indicates that economic risks have largely disappeared from the top concerns for the next two to ten years, replaced by geopolitical conflict, misinformation, climate change, and social fragmentation. [para. 1] This shift means traditional economic tools like interest rates and inflation are losing explanatory power, as asset prices and trade flows are now driven by energy shocks, sanctions risk, and supply chain restructuring under great-power rivalry—a new era of “geopolitical pricing.” [para. 2][para. 3] The world is moving from “efficiency first” to “security first,” from a unified global market to a fragmented, multipolar marketplace. [para. 4]
2. In this new paradigm, price competitiveness is no longer the top priority for global buyers. Over the past 18 months, greater weight has been placed on supply stability, industrial system completeness, cost-control capability, and sustained product innovation. Markets are willing to pay a premium for stable supply rather than simply chasing the lowest cost. [para. 5][para. 6] Geopolitics is unpredictable, but Chinese companies retain four foundational advantages in this landscape. [para. 7]
3. First, China’s durable manufacturing strength remains formidable: its manufacturing trade surplus reached $1.9 trillion in 2024, while America’s manufacturing deficit was $1.3 trillion. [para. 8][para. 9] Second, China leads in applied frontier technologies; for example, highly cited research in batteries is 10 times that of the U.S., and in optical-fiber communications five times, with a rising share of R&D spending coming from private companies. [para. 10][para. 11] Third, China occupies a unique position at the intersection of AI and hardware, with globally leading hardware capabilities in intelligent electric vehicles and robotics, while software gaps are narrowing compared to the smartphone era. [para. 12][para. 13] Fourth, China’s AI models are inexpensive, lightweight, and open-source, offering cost-effectiveness for Global South markets, whereas American models pursue superintelligence. [para. 14] Going global is now mandatory for Chinese companies in computing power, platforms, and models. [para. 15]
4. In the age of geopolitical pricing, companies must consider policy shifts, geopolitical conflict risk, overseas route security, currency stability, and sanctions risk before traditional factors like labor costs or tax rates. [para. 16] Compliance has become productivity—it now requires satisfying host-country regulations and accounting for third-party sanctions costs, and it is the precondition for trust and market access. [para. 17] IMF data projects China will continue running trade surpluses and exporting capital through 2030; last year outbound direct investment reached $150 billion for the first time, making China’s position in the global economic system irreplaceable. [para. 18]
5. The network effects of global manufacturing still center on China, and preserving full industrial-chain capability combined with a global network is the key to mitigating geopolitical risk. [para. 19] Geopolitical conflict is a fixed reality, forcing a reconsideration of corporate growth boundaries. Core competitiveness, global supply chains, AI deployment, compliance capability, and stable supply resilience together form the strategic framework for Chinese companies in the new era. [para. 20] This commentary is adapted from remarks by Zhu Min, former IMF Deputy Managing Director, at a Caixin event during the 2026 Summer Davos Forum. [para. 21][para. 22]
AI generated, for reference only
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