For two decades China was the world's factory floor, churning out cheap, labor intensive exports. That story is flipping. In 2025 China accounted for 14.8% of global merchandise exports but just 9.8% of imports, a gap that captures a real shift: the country is climbing into advanced manufacturing and competing on quality, not just price. That climb creates winners and losers simultaneously inside China itself. AI hardware and electronics makers are expanding margins fast, while autos and solar manufacturers are getting crushed by the same oversupply and price competition that's now squeezing global rivals too. Outside China, the real question for investors isn't whether this shift is happening, it's whether your portfolio companies are using cheaper Chinese technology to boost their own margins or getting run over by it. BlackRock is staying selectively neutral on Chinese equities, leaning into physical AI and advanced manufacturing exposure rather than buying the broad index.

Finsum: When a country moves from cheap exporter to genuine competitor, the investable question stops being whether China is growing and becomes which of your holdings just lost pricing power to it.