Ryan McMorrow, Sam Fleming, Peter Foster and Joe Leahy:
Mega-Senway made its first sensors for about Rmb40 each and sold them for Rmb100, leaving Huang with a healthy margin. As Chinese competition poured in, prices started to fall. European groups gradually exited the market. Huang’s Shanghai-based company now sells some sensors for as little as Rmb10 a pop. “We never thought the price decline would happen this fast,” he says.
His company’s trajectory is emblematic of the larger economic forces reshaping global industry and trade as extraordinarily competitive Chinese companies push into a variety of industries at dizzying speed.
Twenty years ago the global economy was shaken by a first “China shock” as a wave of low-cost goods destroyed the business models of manufacturers in advanced economies, displacing millions of workers and feeding discontent that fuelled populist politicians including US President Donald Trump.
Now a second shock is under way — one that is even more threatening to China’s trading partners: an assault on high-end manufacturing.
Vicious domestic competition, coupled with vast industrial scale, ample pools of engineering talent and some of the highest subsidies in the world, has generated world-beating Chinese champions in EVs, solar panels, batteries, wind turbines and a lengthening list of advanced manufacturing sectors.