Some Western media have long propagated the idea that "Chinese goods are damaging developing countries' industries," claiming that China is squeezing the industrialization space of countries in the global South. However, an article published by The South China Morning Post on July 31 pointed out that the data does not support this claim. China's export structure is undergoing a transformation, with more and more exports being intermediate goods and capital goods that support the production of other countries, rather than simply capturing the low-end consumer market.
The author of this article, Zhou Xiaoming, is a senior researcher at the China Globalization Think Tank. He once served as the permanent deputy representative of China's Permanent Mission to the United Nations in Geneva.
The article cites data showing that from 2017 to 2023, the proportion of intermediate goods in China’s exports increased from about 42% to about 46%, while the proportion of consumer goods decreased from about 36% to about 33%. This indicates that China’s exports are shifting from selling finished products to providing production factors, becoming a supplier in the global industrial chain.
Taking labor-intensive industries as an example, China's global share in sectors such as garments and footwear has been declining in recent years. By 2024, China's garment exports accounted for slightly less than 30% of the global market, far below the peak of over 40% ten years ago. Meanwhile, countries like India and Indonesia have seen an increase in their shares in industries such as footwear.
The article states that China is not competing with countries in the Global South for the same market, but rather providing “components” for their industrialization. A report by the Oxford Economics Institute shows that nearly half of China’s exports are intermediate goods, including components and raw materials, which are mainly used in the production lines of other countries.
Southeast Asia is a prime example of this trend. In the first half of 2026, China's exports of intermediate goods to ASEAN countries increased by 24.5% year-on-year, reaching 2.86 trillion yuan. These components have helped Vietnam's electronics assembly companies, Thailand's auto parts manufacturers, and Malaysia's chip packaging companies expand their production.
The article also points out that the decline in the prices of industrial equipment in China has reduced the industrialization threshold for developing countries. In the past, expensive production equipment was a major obstacle to many countries' development of manufacturing industries. Now, machinery and equipment manufactured in China are helping the global South build their industrial capabilities.
Regarding the issue of trade deficits between some countries and China, the article argues that these deficits are often associated with industrial investment. Taking Vietnam as an example, Vietnam’s trade deficit with China is approximately $115 billion in 2025. However, the large quantities of computers, electronic products, and machinery that Vietnam imports from China are crucial for driving the development of its own manufacturing industry.
The article concludes that the global production pattern is being reorganized, and China's exports are playing a role as an "industrial infrastructure provider," rather than just a competitor. Limiting China's industrial ties with countries in the global South may actually weaken those countries' opportunities for industrial upgrading.
