There is no sign that China’s export juggernaut is slowing down. China’s auto exports, for example, have grown more than tenfold since 2020 and are estimated to reach 10 million vehicles this year. The country posted a record trade surplus of $119.1 billion in August alone, putting it on track to surpass the $1.2 trillion surplus of 2025. The “China shock” is now an everyday reality in multiple sectors, from electric vehicles to power generation.

Accusations that China is exporting excess capacity have echoed across the United States, the European Union, and Southeast Asia, though China has vehemently rejected this. The concerns are understandable: It is hard to compete with Chinese industrial might, and local industry stakeholders worry about everything from job losses to dependence on Chinese suppliers.

There is no sign that China’s export juggernaut is slowing down. China’s auto exports, for example, have grown more than tenfold since 2020 and are estimated to reach 10 million vehicles this year. The country posted a record trade surplus of $119.1 billion in August alone, putting it on track to surpass the $1.2 trillion surplus of 2025. The “China shock” is now an everyday reality in multiple sectors, from electric vehicles to power generation.

Accusations that China is exporting excess capacity have echoed across the United States, the European Union, and Southeast Asia, though China has vehemently rejected this. The concerns are understandable: It is hard to compete with Chinese industrial might, and local industry stakeholders worry about everything from job losses to dependence on Chinese suppliers.

But the conventional view that China’s dominant position in the global market is the result of the central government’s long-term strategic planning and top-down industrial policy tells only half the story. Beijing is not fully in control of the bulldozer of Chinese manufacturing, and the results have sometimes been far beyond what the government wanted or planned for.

In 2004, for instance, when the State Council, China’s central government, announced the launch of the high-speed railway program, its original plan was to build 12,000 kilometers of track by 2020. China ended up with nearly 38,000 kilometers by the end of that year.

The explanation lies at the local level. Once the policy initiative was launched, persistent, intensive lobbying by provinces, cities, and counties ensued, driven by their own interests in securing railway lines within their jurisdictions. The central government subsequently revised its railway construction plans several times, effectively accommodating local demands.

Beijing’s original ambitions for its domestic auto industry differed markedly from what emerged in practice. The original plan was to consolidate the market around a small number of large state-owned enterprises, such as First Automotive Works (FAW), and their joint ventures with foreign partners, positioning them as........

© Foreign Policy