China's massive trade surplus is driven less by its manufacturing strength and more by its failure to stimulate domestic consumption. Weak internal demand forces the economy to rely on exports, a stark contrast to its balanced trade position in 2018.

Despite a property downturn subtracting nearly 1.5 percentage points from GDP, China's economy is buoyed by a hyper-competitive manufacturing sector. With cost advantages of 20-40% in key high-tech sectors, its export growth is outpacing global trade, creating a resilient but unbalanced economic picture.

China cannot pivot to a consumption-based economy because its citizens' wealth is trapped in a collapsing property market. With 60% of household wealth in real estate and prices falling, families cannot borrow against their homes to spend. This structural problem locks China into an export-focused model until at least 2027.

Uber's CEO argues China's EV dominance is a product of a unique hybrid model. The government sets a top-down strategic goal, but then over 100 domestic companies engage in "brutal," bottoms-up competition. The winners, like BYD, emerge battle-tested and highly innovative.

With its domestic, investment-led growth model broken, China has pivoted to an export-heavy strategy. This significant shift creates new vulnerabilities as it must fight for a shrinking pie of global demand amid rising protectionism.

China's domestic crackdown on real estate and local debt has forced a pivot to an export-driven growth model. Exports now constitute a third of GDP, the highest since 1997, while investment's contribution has plummeted. This is a reaction to domestic constraints, not a strategic choice.

China's economy presents a stark contrast: a collapsing domestic property market versus a remarkably resilient export sector. Despite tariffs, exports remain strong because China continues to improve product quality and price competitiveness, maintaining global manufacturing dominance.

China's economic model, driven by internal provincial competition, creates massive overcapacity. This is intentionally turned into an asset by dumping subsidized products (like EVs) into foreign markets below cost. The goal is to eliminate foreign competitors, create dependency, and convert domestic economic chaos into international power.

Contrary to the view of a monolithic state, China's economic strength comes from intense competition between its provinces. This hyper-local market forces companies to become incredibly resilient, and only the strongest, like BYD, survive to dominate globally.