China’s ascent is perhaps best understood through specific industries where it has made remarkable strides. Here we examine three key sectors – renewable energy (solar), information technology/electronics, and automotive (electric vehicles) – each illustrating China’s progression from follower to leader and the implications for global competition.

Renewable Energy (Solar Power as a Case Study)

Few industries showcase China’s value-chain mastery like solar photovoltaics. In the 1990s, China had a tiny, rurally-focused solar program, mostly using foreign technology[8][29]. Today, China is indispensable in solar power: it hosts over 80% of all manufacturing capacity for solar panels and components[7][14], and it installs more solar capacity each year than the rest of the world combined[30].

China’s dominance in solar emerged through a combination of learning, scale, and state support. In the early 2000s, Germany and other European countries created a surge in demand for solar panels with generous subsidies for rooftop solar[31]. Chinese entrepreneurs seized this opportunity: they partnered with German firms, imported production equipment, and ramped up manufacturing to supply Europe’s boom[32][33]. Local governments in China, eager for industrial development, offered tax breaks and cheap land, while the central government identified solar as a “strategic industry” critical for the future[34]. By the late 2000s, Chinese manufacturers like Suntech, Yingli, Trina Solar and others had dramatically expanded capacity. The result was a massive oversupply – by 2013, for every 1 unit of global demand, China had built capacity to supply 2 units[35]. This glut, while financially painful for some, caused solar panel prices to plummet ~80% from 2008 to 2013[8], making solar energy far more affordable worldwide.

Crucially, Chinese firms didn’t stop at low-end assembly. They moved upstream: producing high-purity polysilicon, silicon wafers, and solar cells, not just final modules. Each step saw Chinese companies achieve world-scale operations, often with government financing support. For example, China invested over $50 billion since 2011 in new PV manufacturing capacity, 10× more than Europe, creating 300,000+ jobs across the solar value chain[36]. By controlling raw materials to final assembly, China gained cost leadership and supply security. As of 2021, China had a dominant >80% share in every stage of solar panel production[7]. It also became home to the top suppliers of the specialized equipment used to make solar panels[37] – indicating that even the manufacturing know-how and machinery increasingly reside in China.

For Western and other nations’ solar industries, China’s rise was a double-edged sword. On one hand, global solar adoption accelerated thanks to cheap panels “Made in China” – a boon for climate efforts. On the other, many Western solar manufacturers were outcompeted and shuttered. The U.S. solar industry, which invented many PV technologies and held early patents, lost its leadership as Chinese firms scaled up[38]. American and European solar panel makers struggled to match the low prices; several went bankrupt amid the onslaught of Chinese imports[39]. This led to trade disputes – the U.S. and EU imposed tariffs on Chinese solar panels in the 2010s, alleging state subsidies and dumping. China responded by increasing domestic solar deployment (creating local demand to absorb production) and by shifting some production to third countries like Malaysia and Vietnam to evade tariffs[40].

Today, China not only exports solar hardware; it also heavily invests in renewable projects abroad (often as part of its Belt and Road Initiative). Meanwhile, within China, renewables have scaled astonishingly: in 2023 alone, China added as much new solar capacity as existed in the entire U.S. at that time[41][30], doubling its new installations from the previous year. Solar power has thus become a pillar of China’s industrial and energy strategy – providing a growing domestic market for its equipment manufacturers and helping reduce China’s reliance on imported fossil fuels.

For Western economies, China’s solar dominance is a wake-up call on how quickly an emergent player can capture an advanced industry. It underscores the unique advantages of China’s model: strong government-industrial coordination, willingness to invest at scale (even at the cost of temporary overcapacity), and the ability to leapfrog – China moved from a minor player to the global leader in under 15 years. Western firms are now partnering with Chinese suppliers or scrambling to rebuild domestic manufacturing capacity for solar (often with government incentives, as seen in recent U.S. and EU policy moves). The solar case also highlights a broader pattern: China often enters an industry through cost disruption, then progresses to innovation leadership. Initially, Chinese solar panels were based on Western designs, but now Chinese firms are innovating new cell technologies and improving efficiency through their own R&D. This progression is being replicated in other green tech like batteries and wind turbines.

Information Technology & Electronics

China’s role in IT and electronics is pervasive – from the smallest smartphone to large telecom networks, Chinese manufacturing (and increasingly design) is involved. In the late 20th century, East Asian economies like Japan, South Korea, and Taiwan became known for electronics production. China joined that club decisively after the 1990s, eventually surpassing all in scale.

Manufacturing Hub: By the 2010s, an estimated 70–80% of the world’s consumer electronics (phones, PCs, TVs, etc.) were assembled in China or by Chinese-owned factories. Companies like Foxconn (which produces iPhones in Chinese factories), Pegatron, Flextronics, and a host of Chinese contract manufacturers made China the electronics workshop of the world. This was enabled by China’s supply chain depth – e.g., Shenzhen’s electronics markets and factories could supply everything from circuit boards to casings almost on demand. China’s share of global electronics exports kept climbing, and it became the top exporter of high-tech products (though often the core intellectual property was foreign). Even today, despite some diversification, the vast majority of smartphones, laptops, and other gadgets are made in China. The Statista/CSIS data shows China’s manufacturing value-add in electronics and tech has grown to dwarf that of any other country[23].

Component Mastery: Initially, critical components (microchips, advanced displays, precision optics) were imported from the U.S., Japan, Taiwan, or Europe for assembly in China. Over time, Chinese firms began making more components domestically: BOE Technology is now one of the world’s largest makers of LCD and OLED displays (supplying screens for Apple and Samsung devices), SMIC and others fabricate an increasing share of chips (though still behind cutting-edge leaders), and numerous Chinese firms lead in intermediate products like printed circuit boards, camera modules, and electronics chemicals. By moving upstream, Chinese companies captured more value. For example, China went from importing most solar-grade silicon to producing the majority of it itself; similarly, in smartphones, Chinese companies supply items like batteries (e.g. CATL and BYD produce high-end batteries for electronics and EVs globally). Semiconductors remain a weakness – China still relies heavily on imported advanced chips – but the government is pouring resources into catching up, given semiconductors’ strategic importance.

Chinese Tech Brands: A major shift in the 2010s was the emergence of Chinese brands in consumer electronics: not just as low-cost alternatives, but as innovators in their own right. Huawei deserves special mention – originally known for telecom equipment, Huawei entered the smartphone market and by 2018 became the world’s second-largest smartphone vendor behind Samsung. By 2020, Huawei briefly claimed the #1 spot in global smartphone shipments[27], a stunning achievement for a company virtually unknown to consumers a decade prior (its rise was eventually hampered by U.S. sanctions). Likewise, Xiaomi (founded 2010) leveraged online marketing and fan engagement to become a top-3 global smartphone maker within a few years, focusing on high specs for price. These firms showed that Chinese brands could be cool, not just cheap. Chinese PC makers (Lenovo, Huawei’s laptop line, Xiaomi notebooks) also gained global market share, often undercutting competitors on price-performance. Even in home appliances, brands like Haier, Midea, and Hisense have gone global, sometimes via acquiring Western brands (Haier acquired GE Appliances in 2016). Their products compete well in quality while generally offering better value on cost – eroding the old perception that only Western or Japanese brands are trustworthy.

Telecom and Networking: In the less visible B2B realm, Chinese tech also took leadership. Huawei and ZTE built significant portions of telecom networks across Africa, Latin America, Europe, and Asia, offering reliable gear often at lower cost than Ericsson or Nokia. By the late 2010s, Huawei had roughly 28% of the global telecom equipment market (and a lead in 5G technology rollouts)[22], until geopolitical backlash restricted its presence in some countries. This illustrated how Chinese firms moved from being technology followers to sometimes being first movers – Huawei’s 5G R&D was ahead in certain aspects, forcing Western rivals and governments to react.

Innovation Landscape: China’s sheer scale in manufacturing is now translating into an edge in emerging tech innovation. For example, in drones, Chinese company DJI leveraged China’s electronics supply chain to create affordable, high-quality consumer and professional drones, grabbing ~70% of the global drone market by mid-2010s. In supercomputing, China has built some of the world’s fastest supercomputers (using a mix of imported and domestic chips) and leads in some applications of AI due to abundant data and talent. Chinese tech startups, often backed by large domestic venture capital pools, are experimenting in areas like AI software, quantum computing, robotics, etc., sometimes outpacing Western firms in deployment (for instance, the scale of facial recognition or fintech applications in China is unparalleled).

For Western economies, China’s presence in IT and electronics presents a complex scenario. On one hand, Western firms profited enormously by offshoring production to China – it lowered costs for companies like Apple and Dell and delivered cheaper gadgets to global consumers. Western chip companies (Intel, Qualcomm, etc.) found in China a huge market for their semiconductors as Chinese device makers boomed. On the other hand, China’s rise has eroded certain Western industries (e.g., nearly all consumer electronics manufacturing left the U.S. and Europe). It also created strategic vulnerabilities – as seen recently, Western countries worry about supply disruptions (like if a conflict or trade war cuts off access to Chinese-made electronics or critical components). The pandemic and geopolitical tensions prompted initiatives in the U.S. and EU to “reshore” or “friend-shore” some manufacturing of semiconductors, batteries, and pharmaceuticals, to reduce dependence on China.

Moreover, Western tech companies face aggressive competition from Chinese firms in emerging markets. For example, European mobile phone makers (Nokia, Ericsson on handsets, or later even Samsung in certain segments) lost out to Chinese Android phone manufacturers in many developing countries by offering similar features at lower price points. Even in developed markets, Chinese brands (until restricted) made inroads – OnePlus and Xiaomi gained a cult following among tech enthusiasts globally. This competition has generally benefited consumers but squeezed margins for incumbents. It challenges Western companies to continuously innovate and differentiate, as competing on cost with China is extremely difficult given China’s scale and ecosystem advantages.

In summary, China’s IT/electronics sector shows a pattern of integration then innovation: integration into global supply chains, then innovation to climb the ladder. The West’s relationship with this sector is entwined – cooperative (through trade and investment) yet increasingly competitive as China’s capabilities converge with or surpass those of Western firms in many domains.

Automotive Industry (The Electric Vehicle Revolution)

Chinese automaker BYD’s booth at the Guangzhou Auto Show (Nov 2023). Once known for joint-venture production of foreign models, China’s auto industry is now exporting its own brands and leading in electric vehicle innovation[42][43].

The automotive industry vividly illustrates China’s leap to the forefront, particularly via electric vehicles. For decades, China’s auto sector was large but not globally influential: foreign automakers like Volkswagen, GM, and Toyota dominated Chinese car sales through joint ventures, and Chinese domestic brands were seen as low-end and rarely sold outside China. That is no longer the case.

From Imitation to Innovation: In the 1990s and 2000s, China’s government required foreign automakers to partner with local companies to access the Chinese market. This policy aimed to transfer know-how to Chinese firms. Indeed, companies like SAIC, FAW, and Dongfeng (major state-owned automakers) learned manufacturing techniques and quality control from their JV partners. However, attempts to create strong indigenous gasoline car brands lagged – Chinese models often couldn’t match the reliability or performance of Toyota or Ford. By 2010, foreign brands still commanded the higher end of the market, while domestic brands competed mainly on price in lower tiers.

The electric vehicle (EV) revolution changed this dynamic, offering a “reset” of technological leadership. China identified new energy vehicles as a strategic priority early; generous subsidies, research programs, and infrastructure investments (like nationwide charging networks) were rolled out in the 2010s. Dozens of EV startups emerged (Nio, Xpeng, Li Auto, etc.), alongside established companies like BYD pivoting to electrics. Because EV technology (battery, electric motors, software) was a relatively new field, Chinese firms were not as far behind the West as in combustion engine tech – and in some cases, they were ahead in battery tech due to domestic battery industry strength. BYD, for example, had years of experience in battery R&D and used that to build electric cars with good range and reasonable cost.

Leadership in EVs: By the early 2020s, China became the world’s largest EV market by far, accounting for over 50-60% of global electric car sales. Chinese consumers enthusiastically adopted EVs, in part due to government incentives and license plate restrictions that favored electrics in big cities. This huge home market gave Chinese EV makers a chance to scale up. BYD leveraged scale to drive down battery and manufacturing costs, and by 2022–2023 it overtook Tesla in total volume of electric passenger cars sold (including plug-in hybrids)[6]. Other brands like Wuling (with its ultra-cheap Hongguang Mini EV) demonstrated innovation in catering to local needs – that $5,000 mini EV became one of the best-selling electric cars in the world by unit count, showing Chinese companies’ ability to innovate not just in high-end but in frugal engineering for mass affordability.

China’s battery industry is another pillar: companies like Contemporary Amperex Technology (CATL) are the world’s largest battery manufacturers, supplying not only Chinese EV makers but also foreign ones (Tesla sources batteries from CATL in China, for instance). This gives Chinese industry control over a critical component of the EV value chain. Chinese firms also invested heavily in securing raw materials like lithium and cobalt globally, aiming for an end-to-end hold on the EV supply chain, from mines in Africa to battery plants in China to cars on the showroom floor.

Auto Exports Surge: Historically, China exported very few cars – most production was for the vast domestic market. This too has changed. In 2023, China dethroned Japan as the world’s largest car exporter, shipping about 4.9 million vehicles abroad (a 58% jump from 2022)[42]. About one in three of these exported vehicles was a new energy vehicle (battery electric or hybrid)[44]. Chinese brands have begun penetrating markets in Europe (where BYD, MG – a revived British brand now Chinese-owned – and Great Wall’s Ora EVs are expanding), Southeast Asia, the Middle East, and Latin America. Several factors propelled this export push: slowing growth at home, excess capacity, competitive EV products, and opportunistic moves like supplying gasoline cars to Russia when Western firms exited that market in 2022[45].

Chinese automakers can compete strongly on price and increasingly on quality/features. Reviews of the latest Chinese EVs in Europe often praise their tech features (many Chinese EVs come with advanced driver aids, sleek infotainment, etc.) albeit sometimes with criticism on ride and handling – but the gap is closing. And in certain segments (like electric buses), Chinese manufacturers (e.g. BYD, Yutong) have a significant global market share already, thanks to early scale achieved in China’s domestic rollout of electric public transport.

Western carmakers now find themselves in a challenging position. Companies like Volkswagen and GM, which long profited from China’s market, are suddenly losing share there as Chinese EV startups and established domestic players out-innovate in electric models. For example, foreign brands’ share in China has plummeted in the EV segment – brands like Tesla do well, but many others are struggling to compete with domestic offerings tailored to Chinese tastes (e.g., cars with in-car karaoke, WeChat integration, etc.). One statistic in mid-2023: Chinese domestic brands captured over 50% of the overall auto market in China for the first time in modern history, signaling consumers’ shifting preference towards local makes largely because of EVs.

Comparatively, Japan’s and Korea’s auto industries rose in the 20th century by mastering combustion engine tech and exporting reliable cars (Toyota, Honda, Hyundai, etc.), eventually establishing strong brands. China is attempting something similar but in the EV era. It has certain advantages: a gigantic home market to achieve scale (China produces over 30 million vehicles a year, about 1/3 of world output[46]) and strong state support, as noted. But it also faces challenges: global brand perception and distribution networks take time to build. Some past attempts of Chinese gasoline cars in Western markets faltered on safety or emissions standards. EVs may give a fresh slate, but Western protectionism could rise (already Europe in 2023–24 is considering tariffs or investigations into Chinese EV subsidies).

Nonetheless, the trajectory is clear that China has moved into the driver’s seat (pun intended) of the auto industry’s future. Western carmakers are responding by accelerating their own EV plans and lobbying for industrial policy support at home. Competition will likely benefit innovation: a kind of “Sputnik moment” for Detroit and Wolfsburg to catch up to Shenzhen and Shanghai in electrification. For consumers worldwide, one implication is more choice and possibly more affordable EVs sooner – e.g., a family in Europe might soon choose between a Volkswagen EV or a comparable (but cheaper) BYD or XPeng model. This scenario was unthinkable 15 years ago, when Chinese cars were absent abroad; it’s reality now due to China’s concerted climb up the value chain.

Other Sectors and Broad Impact

While solar, electronics, and autos are highlighted, similar stories can be told in appliances, rail transport, chemicals, pharmaceuticals, e-commerce, and more. In high-speed rail, for instance, China built the world’s largest network in about 15 years, and now its companies export trains and rail systems (competing with Siemens and Alstom). In e-commerce and fintech, Chinese innovations like Alipay and WeChat Pay led the world in mobile payments adoption, arguably ahead of the West in cashless society implementation. In heavy industries like steel and shipbuilding, China has for some time been number one in output – though those are more classic scale industries, the innovation now is to move those up the value chain (e.g., producing higher-grade specialty steels, more advanced ship types and marine engines).

The cumulative effect of these sectoral shifts is that China’s economy has transitioned from primarily low-cost manufacturing to a more balanced mix including high-tech manufacturing and services. Exports from China now include commercial drones, advanced machinery, and high-speed trains – products once solely the domain of G7 economies. In many fields, Western companies now find their toughest competitor is Chinese – backed by a vast home market, often lower costs, and increasingly good technology.