Opinion | China needs to show it can compete on more than price
More companies need to follow the likes of BYD and Huawei and build brands, invest in technology and deliver differentiated products and services
Too much supply and weak demand are pushing prices down. The deflationary pressure is building not just on company profits, but on the growth model that China has relied on for decades.
The Chinese government has been shifting towards a growth model driven by innovation since at least 2014. We are now seeing the results of that shift in sectors like electric vehicles, semiconductors and high-end manufacturing – where Chinese companies are no longer just competing on price, but leading on technology, production capacity and global market share. Still, the pressure to cut prices remains widespread, especially among firms that have yet to transition away from volume-led growth.
The next phase of China’s transformation depends on getting more companies to follow the lead of innovation powerhouses like BYD, Huawei, Haier and DeepSeek. That means moving beyond low-cost competition and continuing to build brands, invest in technology and deliver differentiated products and services.
01:58
China GDP figures beat market forecasts despite looming US tariff risks
For years, many Chinese firms competed in overseas markets by offering cheaper goods. At home, where competition is fierce, the focus has been on scale and volume. This model worked reasonably well when demand was strong. But with global trade under pressure from tariffs and domestic spending still weak, production is outpacing demand.