Scale and Stability: China’s Enduring Assets

The notion that the Chinese century is over before it began often echoes through Western policy circles, revealing more about American political psychology than China’s actual trajectory. A few years ago, fears of inevitable conflict and economic usurpation dominated discourse; today, we witness an oscillation towards American triumphalism. Despite facing serious headwinds—a troubled property sector, demographic challenges, and mounting Western trade barriers—China possesses two interlocking strategic advantages that Western analysis consistently underestimates: unmatched economic scale and perceived political stability. These twin pillars, in spite of the certain difficulties China faces, operate jointly to create durable strategic advantages that should not be underestimated in the Western debates which too often focused narrowly on short-term setbacks rather than China’s enduring structural strengths.

Scale and Domain-Specific Technological Leadership

China’s scale provides distinct competitive advantages in today’s global landscape, but its position has evolved beyond mere manufacturing capacity to selective technological leadership. With a population of 1.4 billion and manufacturing output accounting for roughly 29% of global production in 2024, China possesses unparalleled scale that enables both absorption of external shocks and rapid commercialisation of technologies (UN Statistics, 2023). Such scale now increasingly translates into genuine technological leadership in specific domains, rather than simply imitation or incremental improvement.

The electric vehicle (EV) sector demonstrates such evolution most clearly. Chinese manufacturers now account for approximately 60% of global EV sales, with firms like BYD surpassing Tesla in global delivery volumes in early 2025 (IEA, 2024). Their dominance extends beyond manufacturing to innovation: BYD’s Blade Battery technology, which improves safety while reducing costs, passing the ‘Nail Penetration Test’ without giving off any smoke or fire (BYD, 2023). Furthermore, Chinese firms now lead in battery chemistry, with CATL’s development of sodium-ion batteries potentially revolutionising energy storage. The full supply chain integration from mining to battery production to vehicle assembly creates resilience against external shocks while enabling Chinese manufacturers to undercut Western competitors by 20-30% on comparable models.

Source: https://www.iea.org/reports/global-ev-outlook-2024/trends-in-electric-cars

However, China’s technological leadership remains uneven across sectors. In artificial intelligence, Chinese firms have made significant advances in applications like facial recognition and large language models, but still trail Western leaders in foundational AI research and innovation (Stanford, 2024). Export controls imposed by the United States and its allies strictly limit China’s access to the most advanced semiconductors and AI accelerator chips, preventing Chinese companies from acquiring cutting-edge hardware essential for training and deploying top-tier AI models. This gap is most evident in high-end chip manufacturing, where China’s domestic capabilities are still several generations behind industry leaders like TSMC and Samsung.

Moreover, in sectors where China possesses scale advantages, dominant market share often triggers protectionist countermeasures from trading partners. The European Union’s 2025 imposition of up to 35% tariffs on Chinese EVs exemplifies such defensive responses (Reuters, 2025). Domestic market saturation presents another challenge, with inventory levels rising 40% year-on-year and price competition intensifying across budget segments (Deloitte, 2025).

Despite these constraints, China’s combination of scale and selective technological leadership provides strategic flexibility few competitors can match. When European markets began restricting imports, Chinese manufacturers promptly redirected vehicles to Southeast Asian markets, increasing regional exports year-on-year since 2018 (Wolf; Chen, 2025). Such adaptability, enabled by robust domestic demand, diversified export channels, and genuine technological advantages in certain sectors, illustrates how China’s evolved position functions simultaneously as a shield against external pressure and a springboard for strategic competition.

Political Stability as Strategic Leverage

While scale provides China with economic resilience, its projected political stability serves as a powerful diplomatic asset in an era marked by increasing global uncertainty. The perceived stability, whether real or carefully manufactured, has become a central component of China’s international engagement strategy.

China has systematically cultivated an image of reliable partnership, deliberately positioning itself as a steady counterpoint to perceived Western volatility. The messaging has been remarkably consistent across diplomatic channels, with President Xi Jinping repeatedly emphasising China’s role as a “reliable partner and friend” during regional forums. As former Italian undersecretary Michele Geraci observed, foreign investors have come to value the “predictable environment” that China’s regulatory framework projects, particularly in contrast to policy shifts in Western democracies (Global Times, 2025)

The Trump administration’s unpredictability, especially regarding tariffs and trade agreements, inadvertently strengthened China’s stability narrative. While successive US administrations demonstrated significant policy reversals on initiatives like the Trans-Pacific Partnership, Chinese infrastructure commitments remained largely consistent despite regional political changes, economic headwinds, and international tensions. The contrast has proven particularly effective in Southeast Asia, where nations seeking predictable economic relationships increasingly hedge their strategic bets (ASC, 2024)

The Belt and Road Initiative (BRI) demonstrates how China leverages stability perception alongside financial incentives. As documented by the Oxford China Policy Lab, when Honduras severed ties with Taiwan in 2023 and formally recognised Beijing, it promptly received nearly £276 million in development financing through the BRI (Oxford China Policy Lab, 2025). Research reveals a consistent pattern: countries that align with China’s positions receive substantially more development projects and financial support than those maintaining ties with Taiwan or expressing reservations about China’s territorial claims (Dreher et al, 2021).

Even China’s slowing economic growth has been framed within a narrative of deliberate, managed development. Five percent annual growth represents a substantial decline from historical double-digit expansion, but compared to Western economies, it still offers international partners considerably more reliable growth opportunities. The narrative of planned, sustainable growth, coupled with clearly articulated industrial policies in strategic sectors, has allowed China to continue attracting partners despite its economic challenges.

Nevertheless, questions remain about whether these relationships represent genuine alignment or merely transactional arrangements. Some suggest that many of China’s partnerships remain primarily financial in nature, with support contingent on specific diplomatic concessions rather than shared values or strategic vision. China’s stability narrative also faces growing credibility challenges as its domestic economic model evolves. The property sector crisis, financial volatility, and regulatory unpredictability have complicated the image of China as a source of unwavering stability.

Conclusion

China’s twin advantages of scale and stability create durable strategic assets that will outlast current economic challenges and Western containment efforts. Neither advantage is absolute nor unconstrained; scale provokes counterbalancing forces and stability narratives face credibility challenges. However, the synergy between these two advantages provides China with unique resilience and strategic patience. While Western analysis often oscillates between alarmism and complacency, China’s consistent leveraging of scale and stability suggests a more enduring competitive position than either extreme would indicate. As the EV and BRI examples demonstrate, China possesses the capacity to adapt these advantages to changing circumstances, even as it navigates their inherent limitations. The adaptability, rather than any single metric of power, may ultimately determine China’s long-term trajectory in an increasingly contested global order.

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