China's rise as a manufacturing superpower is one of the most consequential structural transformations in modern economic history. Over the past four decades, the country has evolved from a peripheral industrial economy into the central node of global production networks. Today, it accounts for roughly one-third of global manufacturing output, surpassing the combined production of the next nine largest manufacturing economies.

This shift is not merely quantitative; it reflects a qualitative reconfiguration of global industrial geography, supply chains and technological leadership. The relative decline of the United States' share of global manufacturing value-added, now under 17 percent, illustrates how decisively the balance of industrial power has tilted.

Forecasts suggesting that China could approach 45 percent of global industrial output by 2030, while the US share may fall to around 11 percent, point toward an emerging world economy increasingly structured around Chinese productive capacity.

Such dominance is rooted in a development model that historically emphasized scale, infrastructure and export-oriented industrialization. Massive investments in transport networks, logistics systems, and industrial parks enabled firms to exploit economies of scale and cluster efficiencies. State coordination reduced transaction costs, while access to an abundant labor force ensured globally competitive pricing. Over time, this combination fostered dense supplier ecosystems capable of rapid innovation and flexible production.

The transformation of China's trade position further underscores this structural shift. Since 2012, it has overtaken the US as the largest trading partner of 150 countries worldwide.

This is reflected in its vast cross-continental volumes: for example, in the first two months of 2026, China-ASEAN trade surged 20.3 percent to 1.24 trillion yuan ($180 billion), while in 2025, trade reached about $348 billion with Africa, over $565 billion with Latin America, $1.1 trillion with ASEAN, over $200 billion with South Asia, demonstrating its deeply integrated global trading network.

This development signals a profound reorientation of international economic linkages. Yet China recognizes that the earlier growth paradigm, heavily reliant on debt-financed infrastructure and real estate investment, faces diminishing returns. Infrastructure saturation, rising financial risks, and declining marginal productivity of capital have reduced the effectiveness of this model. In response, policymakers have advanced a new strategic framework centered on "high-quality development," which prioritizes innovation, environmental sustainability, and technological upgrading. Clean technologies occupy a central place in this vision, functioning both as engines of growth and as instruments of industrial transformation.

China's pre-eminence in clean energy manufacturing is already striking. It produces roughly 80 percent of the world's solar panels, about 60 percent of wind turbines, and a similar share of lithium-ion batteries.

These figures indicate not only production scale but also a supply-chain ecosystem across critical components such as polysilicon processing, rare-earth magnet fabrication, and battery materials refining. The economic contribution of this sector is increasing substantially: according to a study by the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief, in 2022, China's clean energy economy was valued at about 8.4 trillion yuan ($1.2 trillion).

By 2025, it had nearly doubled to 15.4 trillion yuan, accounting for roughly 11.4 percent of the country's GDP, a figure comparable to the economic size of Brazil or Canada.

In 2025, the "Three New" — solar power, electric vehicles and lithium-ion batteries — and other clean energy technologies contributed more than one-third to China's economic growth and drove over 90 percent of new investment growth. In the same year, China invested 7.2 trillion yuan in clean energy, roughly four times the amount invested in fossil fuel extraction and coal power during the same period.

This rapid expansion suggests that green industries have transitioned from policy priorities to core drivers of national economic growth.

EVs and power batteries were the largest contributors to China's clean energy economy in 2025, accounting for about 44 percent of total sector value. China produced 16.6 million EVs, up 29 percent year-on-year. Of these, about 3.4 million were exported, accounting for 21 percent of total output, while exports grew 86 percent year-on-year. The solar power sector contributed 19 percent of clean energy industry value, generating 2.9 trillion yuan in economic value.

The strategic logic behind this transition is multifaceted. First, clean technology manufacturing offers higher value-added potential than traditional heavy industry, supporting productivity growth. Second, it aligns with global de-carbonization trends, ensuring that Chinese firms remain competitive in markets increasingly shaped by environmental regulations and carbon-reduction targets. Third, it positions China as a standard-setter in emerging industries, enabling it to influence global technological norms and supply chains in ways that reinforce long-term economic leadership.

China's current trajectory reflects a transition from quantity-driven expansion to quality-oriented development. Its manufacturing strength has already reshaped global economic hierarchies, and its leadership in clean technologies positions it at the forefront of the next industrial era.

Yet this transformation faces demographic constraints, employment challenges, and financial risks in the face of global uncertainties. The coming decade will therefore be crucial: if China can harness innovation and green industry to sustain productivity gains while navigating structural headwinds, it may consolidate its position as the central pillar of the world economy. Otherwise, the global system could enter a more fragmented and uncertain phase, with implications extending far beyond China's borders.

The author is a professor and chair at the Centre of Chinese and Southeast Asian Studies in Jawaharlal Nehru University, New Delhi.

The views don't necessarily reflect those of China Daily.

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