For decades, American policymakers and business leaders assumed that integrating China into the global economy would moderate its politics and align its interests with the West. Ram Charan argues that the assumption was dangerously wrong. China, he says, has executed a deliberate strategy to dominate global supply chains, hollow out Western industry, and convert economic leverage into geopolitical power.
Charan is a longtime advisor to CEOs who has worked across major industries for six decades. He has also advised more than 50 Chinese companies and served on boards in China. He is a Harvard Business School Baker Scholar, where he earned a doctorate and authored 36 books, including the bestseller Execution. His latest book outlines what he calls China’s “90% model,” a systematic plan to capture overwhelming global market share.
“This is reality,” Charan says of China’s economic strategy. “This is an economic war to destroy the capabilities of the West, of the democratic countries. It has happened. It is happening.” The model, he explains, centers on producing 90% of goods to meet “the total demand of the world,” selling below marginal cost with a “depreciated currency,” and running the country “as a corporation like GE where you take losses if you have to and then you collect trade surplus across the globe.”
Last year, he notes, China accumulated “1.2 trillion hard currency cash,” which he says can be used for military buildup, technology acquisition, and political influence abroad. “It is a brilliant strategy,” he says. “I would give them an A-plus for this as strategy and execution.”
Charan traces the model’s roots back to 1949, arguing that Chinese leaders absorbed lessons from Singapore’s Lee Kuan Yew about scaling manufacturing and acquiring Western technology. Over time, he says, Beijing concluded that democratic liberalization threatened Communist Party control. The result was a long-term campaign to consolidate domestic authority while weakening Western industrial capacity. He describes China’s approach as methodical and patient. “No fighting,: he says. Instead, just “destroy industrial capability of the West.”
He urges leaders to track important indicators of China’s gains, particularly global market share. “Take the P modules solar,” to see China’s hold on the industry, for instance. “It’s 90%,” he says. He notes that American dominance in certain industries “within 70 years… has gone to zero.” The warning signs are visible in pricing. Chinese exports are “dirt cheap and good quality,” he says, enabled by “zero cost capital, free land, free subsidies.” Western firms often cannot compete. “There’s no way a solar manufacturer in the west… can actually compete,” he says.
Charan believes many executives understand the threat but fear retaliation of sanctions and investor backlash. “It is the CEOs of the industries that are being attacked–they know it, but they are not talking,” he says. He warns that stock gains built on cheap Chinese inputs are “totally artificial.” When China “puts the foot on your industry,” he says, “their stock price is going to go through the Earth.”
China’s strategy also poses national security risks for the West. China has demonstrated it can restrict exports of critical components such as magnets, which affect autos, chemicals, and aerospace. “We do not have [these] simple things like magnets,” he says. In wartime, that vulnerability could cripple industrial mobilization. “If the industrial capacity is not there, we can’t sustain a longer war,” he says.
Charan argues that a Western response must be developed. He calls for a cabinet-level Department of Manufacturing and Technology. “Highest priority item to report directly to the boss,” he says, recommending it be led by an experienced CEO and coordinate closely with allies. He envisions deeper integration among the United States, Japan, South Korea, Israel, Germany, and others to build industrial capacity across a $70 trillion combined economy.
Public awareness is essential. “Make [the] public aware–repeat, repeat, repeat,” he says, arguing that voters, investors, and CEOs must grasp the stakes. Bilateral trade negotiations and supply chain diversification can help rebalance deficits, but he insists the effort must be framed as a long-term strategy. “Think in seven-year terms,” he says, urging an emphasis on building institutions that can survive political transitions.
Charan does not discount diplomacy or de-escalation, yet he views economic competition as the decisive front. “Economic war first,” he says. The West still possesses scale, innovation, and alliance networks. Whether it mobilizes them effectively, he suggests, will determine the next chapter of global power.
