The Wheeler Institute welcomed economist Keyu Jin, to explore China’s rise as an economic superpower. The session, moderated by Hélène Rey Lord Bagri, Professor of Economics at London Business School, part of the Wheeler Institute’s new event series Global Routes.
Jin’s presentation delved into the themes from her latest book, The New China Playbook: Beyond Socialism and Capitalism, in which she challenged prevailing Western assumptions about the Chinese economy and presented a more nuanced vision of how China’s unique political-economic model could shape its economic future.
China’s Dominance in Global Manufacturing and Strategic Sectors
One of the most striking points Jin highlighted was China’s global dominance in manufacturing, with double the manufacturing capacity as the United States, its nearest competitor. China commands a strong manufacturing advantage in industries that could define the future. It holds over 75% market share in lithium-ion batteries, dominates 60% of the global solar panel market, and leads in electric vehicles (EVs). These numbers highlight China’s deliberate strategy to position itself at the heart of global production, moving beyond low-cost labour to becoming a key player in advanced technologies and green energy.
Keyu Jin Challenges Western Assumptions
In China, while politics was centralised, the economy was decentralised, with local governments playing a crucial role in implementing policies. This fostered competition and innovation, as seen in the solar panel boom from 2005 to 2019, where local incentives spurred rapid growth, surpassing the bureaucratic hurdles often faced by Western economies. Jin critiqued Western views of China as outdated, highlighting the misconception that it had a monolithic economy.
Generational shifts
Keyu Jin discussed how China’s generational shifts have played a large part in influencing China’s economy and society:
- Post-60s Generation: Embracing Western ideas, this generation emerged during China’s economic reforms and played a key role in its globalisation.
- Post-70s Generation: Valuing stability over political freedom, they prioritised financial security after witnessing rapid industrialisation and the Tiananmen Square protests.
- Post-80s Generation: Known as the “Buy a House” Generation, they focused on homeownership as a status symbol amid rising property prices.
- Post-90s Generation: Confident in China’s global leadership, they embraced consumerism and technology while celebrating national achievements.
- Post-00s Generation: Growing up digitally, they remained optimistic about China’s superpower status. Their views highlighted the complexities of Chinese society, where economic aspirations and national pride coexisted, challenging Western interpretations.
Economic Potential and Structural Challenges
Despite China’s dominant global presence, Jin emphasised that there’s still significant untapped potential within the country. China’s Total Factor Productivity (TFP), a measure of economic efficiency, indicating room for improvement in how efficiently the economy uses its resources. Additionally, China’s service sector, which represents 47% of employment and 50% of GDP, remains underdeveloped compared to advanced economies, providing another avenue for growth.
However, China faces a structural challenge with 900 million people earning less than $300 per month, there is a significant income disparity, even as the urban middle classes thrive. To continue its economic rise, it must address these imbalances and unlock the productivity of its lower-income population.
Role of the Private Sector and Government Regulation
During the event, a key question was whether China’s policies stifled the private sector. Jin highlighted that the government valued the sector’s role in economic success. While regulatory crackdowns, especially in technology and education, drew attention, she noted that innovation was prioritised first. In her book, she described this as a balancing act between state control and market forces. Recent crackdowns on retail investment aimed to protect unsophisticated investors, reflecting a focus on fostering growth while maintaining order.
Geopolitics and Competition with the U.S. Dollar
In response to China’s relationship with the U.S. dollar, Jin explained that with geopolitical tensions, China’s approach to international trade and currency competition is likely to be gradual and deliberate. There are efforts to reduce reliance on the U.S. dollar in some trade agreements, the Chinese government does not appear to be pursuing an aggressive strategy to supplant the dollar.
She highlighted how China’s leadership prioritises peace and economic stability, with the goal of achieving its annual GDP target of 5% growth. To reach this target, three times the current stimulus amount seen in recent years would be needed.
The future of China on the global stage according to Keyu Jin
China’s economic model challenges simple categorisation, seamlessly integrating state control with dynamic market forces that defy conventional wisdom. As it solidifies its leadership in critical sectors and reshapes global economic landscapes, understanding this multifaceted approach becomes imperative. Addressing income disparities and unlocking untapped productivity will be vital for sustaining growth and stability. The world must adapt to this evolving reality, recognising that China’s rise presents both challenges and opportunities for rethinking global economic dynamics.
About the speakers
Keyu Jin (Chinese: 金刻羽) is an Associate Professor of Economics at the London School of Economics and a Young Global Leader at the World Economic Forum. Hailed by Tony Blair (former Prime Minister of the United Kingdom) as ‘a brilliant thinker’, Jin’s research has been vital in changing conversations on global trade imbalances, international asset prices and China’s economic growth model. Her latest book, The New China Playbook: Beyond Socialism and Capitalism, has been praised by critics as a ‘myth-dispelling, comprehensive guide to the Chinese economy and its path to ascendancy’.
Hélène Rey is the Lord Bagri Professor of Economics at London Business School. Until 2007, she was at Princeton University, as Professor of Economics and International Affairs. Her research focuses on the determinants and consequences of external trade and financial imbalances, the theory and empirics of financial crises and the organization of the international monetary system. She was elected President of the European Economic Association in 2022.
About the author
Donald Innocent-Ike, MBA2025 is an Outreach and Communications Intern at the Wheeler Institute for Business and Development. After graduating from Georgia Institute of Technology with a Bachelor’s degree in Electrical Engineering & Economics and a Master’s in Computer Science & Quantitative Finance, Donald worked as a Graduate Research Assistant, before becoming an Associate at Trust Securities in Atlanta. He has a keen interest in finance, development, business as a force for good, particularly in emerging markets.