Reference News Network, August 7 report - An article titled "China's Unbeatable New Production Model Export" was published on the website of The Japan Times on August 4. The author is Hu Xinhao, a director of Hong Kong Concept Capital. The following is a translated version of the article:

U.S. Treasury Secretary Bensont claimed that the U.S. cannot allow China to "return to prosperity through exports." Such remarks reflect Washington's growing concern that China is reversing global trade.

However, a more urgent issue is not what China is exporting, but how it is exporting. The global cost structure is indeed being reshaped, but behind it lies a more hidden and complex force: continuous productivity improvements. China is not only exporting more goods, but also exporting a new production model driven by automation, artificial intelligence, and state-guided industrial optimization.

At the end of the 20th century, China rose as the world's factory, relying on labor and scale advantages. But now, China aims to achieve a new dominance through smart infrastructure. Artificial intelligence is no longer limited to applications or chatbots, but is embedded in all aspects of the real economy, from robotic arms, warehouse fleets to automated production lines. For example, Xiaomi's smart factory in Beijing can assemble 10 million smartphones annually, with fully automated, unmanned production throughout the process.

This technology-driven ecosystem is not limited to a single factory. DeepSeek, an open-source large language model, is not only used for programming but also deployed in logistics and manufacturing optimization. JD.com is automating its supply chain network, while Foxconn is developing modular, AI-driven micro-factories.

These examples reflect a widespread culture of industrial optimization. In the context of the Chinese government's vigorous development of new quality productivity, AI pilot zones are being expanded, and factory upgrades receive subsidies; the local funding provided by cities such as Hefei and Chengdu is comparable to national projects in other regions.

This strategy echoes Japan's approach in the 1980s. At that time, automation, lean production, and industry integration helped Japanese companies defeat global competitors. However, China's approach goes further, combining artificial intelligence with economies of scale and feedback loops, which is an ongoing cycle of optimization and competition.

The stage of global competition is ruthless. Surviving enterprises will be more streamlined, more adaptable, and have more advantages than traditional enterprises. Chinese successful electric vehicle manufacturers have entered the European market in this way, with product pricing that local enterprises find difficult to match. On the surface, this process seems chaotic, but in reality, it is similar to natural selection. China is consciously driving industrial evolution, nurturing a large number of competitors, and letting the market screen them.

Therefore, Chinese industry has transformed efficiency into a tradable asset, which is reshaping the global pricing landscape. Once this shift truly takes root, enterprises around the world will have to adjust their pricing strategies, labor deployment, and supply chain configurations.

When the U.S. and its allies implement tariffs, subsidies, and export controls, the real competition is about integrating artificial intelligence into the real economy. This is not about who can build the smartest chatbot, but who can build the smartest factory, and who can sustainably replicate their model on a large scale.

Even if the Chinese model is not applicable everywhere, it raises important questions for policymakers in various countries: How can other countries compete against systems that can produce more, faster, and cheaper—systems whose advantages come not from lowering wages, but from creativity?

China is changing the rules, not through tariffs, but through industrial transformation. If the previous wave of globalization pursued cheaper labor, the next wave will pursue smarter systems. Intelligence will no longer exist only in the cloud, but also in machines, warehouses, and 24-hour non-stop assembly lines.

Now, China's most important export is not products, but processes. And this will redefine the nature of global competition. (Translated by Yang Ke)

Original: https://www.toutiao.com/article/7535714406211273226/

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