David Glanz looks at how China is trying to dominate high-tech manufacturing, and why its economic challenge to the US is spilling over into imperialist conflict
China has become the world’s dominant manufacturing nation, a factor driving imperialist competition with the United States, including Donald Trump’s harsh tariffs on Chinese goods.
Successive US administrations under Barack Obama, Joe Biden and Trump (twice) have made reining in China their main priority.
Obama undertook a pivot to Asia, designed to increase the US’s military domination and prevent China from “breaking out” into the Western Pacific. Biden promoted plans to onshore sophisticated computer chip production. And Trump is trying to keep out Chinese imports in the hope of reviving US manufacturing and weakening China as a rival.
It isn’t working. China currently accounts for 35 per cent of global manufacturing, a figure the United Nations is projecting to rise to 45 per cent by 2030.
China already leads global production in wind turbines, drones, steel, aluminium, shipbuilding, solar power, consumer electronics, batteries, active pharmaceutical ingredients, 5G equipment, consumer electronics and bullet trains. In 2023, it installed more industrial robots than all other countries combined.
When Chinese company DeepSeek unveiled its artificial intelligence chatbot in January, developed with cheaper chips than its Western rivals, it rattled its US competitors.
But perhaps nothing sums up China’s dominance more than its car industry—and particularly its development of electric vehicles, or EVs. According to the International Organisation of Motor Vehicle Manufacturers, China produced 32.3 per cent of all cars in 2023, towering over the US in second place with 11.3 per cent.
Its EV industry is growing rapidly. Chinese firm BYD last year made slightly more EVs than Tesla, previously the world’s most popular EV brand. BYD now has a market value greater than that of Ford, GM and Volkswagen combined.
The development of the EV industry in China did not happen by chance—it reflects the intersection of globalisation and state intervention and highlights the contradictions between competing imperialists.
Winning globalisation
The US encouraged China to welcome foreign investment, leading to China’s admission to the club of “free trade” countries, the World Trade Organisation, in 2001.
Former US trade representative Michael Froman wrote, “The US strategy of engagement with China was based on the premise that, if the United States incorporated China into the global rules-based system, China would become more like the United States.”
But it didn’t work out that way. Froman said that today, “It is important to recognise a fundamental truth: the United States is now operating largely in accordance with Beijing’s standards … In the war over who gets to define the rules of the road, the battle is over, at least for now. And China won.”
Under Hu Jintao, President of China from 2003 to 2013, and now under Xi Jinping, China combined elements of free trade—exporting vast amounts of cheap, low-tech goods—with state intervention to create “national champions” in strategic sectors. One of those sectors was EVs.
The Chinese ruling class recognised that it could not compete with US, Japanese and European manufacturers of fossil fuel cars. Instead it put resources into developing a battery industry and, from that, an EV industry.
Today the Chinese firm CATL produces a third of the world’s electric car batteries and supplies 16 of the world’s biggest carmakers, including General Motors and the Shanghai factory of Tesla. Its main rival, BYD, makes about one-sixth of the world’s EV batteries.
China is increasingly using its large domestic market to underpin strategic industries so it no longer depends on access to markets in Europe or the US and is therefore less vulnerable to tariffs. China accounted for 65.3 per cent of total global EV sales last year, compared to just 8.7 per cent for the US.
Rare earths
Trump (and before him, Biden) has erected a tariff wall that effectively keeps Chinese EVs out of the US. He is now looking to get Chinese EVs banned in Britain as part of trade negotiations with London.
He is responding to the demands of industrialists. Despite the tariffs, Ford’s chief executive, Jim Farley, has described China’s EV industry as an “existential threat” to the US car industry.
The tariffs have added to inter-imperialist tensions, with China in turn restricting the export of a wide range of rare earths and magnets to the US.
China has benefited from its deposits of rare earths—minerals that are key to the creation of batteries and magnets that can operate at high temperatures. As former Chinese leader Deng Xiaoping boasted, “The Middle East has oil, China has rare earth.”
Rare earths are of critical importance not only for EV batteries but for military applications. An F-35 fighter needs more than 400 kilograms of rare earths, an AUKUS submarine more than four tonnes.
The minerals go into making weapons guidance systems, radar, precision-guided bombs, lasers, satellites, drone motors and night-vision goggles.
Competition for the minerals and the threat of China withholding supply helps explain Trump’s claim on Greenland and his trade deal with Ukraine, both sources of rare earths.
It is also a potential factor in negotiations between Trump and Anthony Albanese.
The Australian mining company Lynas is the only producer of certain “heavy” rare earths outside China, from ore mined in WA and processed in Malaysia.
Imperialist contradictions
One of the challenges for Trump’s hopes of “reshoring” manufacturing to the US is the way that corporations operate and source materials, parts and labour across national boundaries.
As motoring journalist Peter Anderson told the ABC, “From a supply chain perspective, China is critical to global automotive production.
“It doesn’t matter whether you’re making a Ford truck in Michigan or you’re making a sports car in a garage in the UK, you have [almost certainly] got Chinese parts in there.”
The same globalisation logic applies to the EV industry. BYD has factories in Thailand, India, Hungary, France and Uzbekistan.
Different imperialists have different priorities. Trump is hostile to EVs in general and has tried to slam the door shut to Chinese cars. But the European Union is trying to simultaneously defend its manufacturing sector against imports and encourage Chinese companies to invest in Europe.
Chinese-built EVs (including foreign brands such as Tesla) were just 3.5 per cent of EVs sold in the EU in 2020. Last year, that figure hit 27.2 per cent. In response, the EU has imposed total tariffs on Chinese EVs of up to 45 per cent.
As Stephen Bartholomeusz wrote in Nine Newspapers, “The Europeans don’t want a repeat of their experience with solar panels, where heavily subsidised Chinese products wiped out Europe’s solar manufacturing sector.”
But even within the EU, the capitalists are divided. Of the 27 member states, four voted against the tariffs and 10 abstained.
Germany voted against (despite pressure from the pro-tariff Greens). Germany is the world’s sixth biggest car manufacturer and is heavily entangled with China.
Volkswagen, BMW and Mercedes-Benz all have factories there and they also export fossil fuel vehicles to China.
The other No votes came from Slovakia, Hungary and Slovenia. Hungary is keen to attract further. Chinese EV manufacturing investment. Slovakia is heavily linked into Germany’s car industry. All four worry about Chinese retaliation.
But even those EU nations that supported the tariffs know that they cannot burn the relationship with China, in case the EU’s trading relationship with the US sours. In early May, Trump threatened the EU with 50 per cent tariffs, pending further negotiations.
Workers resist
China poses a serious challenge to the US’s economic and military domination. This is driving the charge to war.
US Defence Secretary Pete Hegseth said on 31 May that the US was ready to fight China over Taiwan. “There’s no reason to sugar coat it. The threat China poses is real, and it could be imminent.”
Workers everywhere have an interest in standing against the madness of the market and the inter-imperialist tensions it produces. And that is just as much the case in China.
According to the China Labour Bulletin, there have been 24 strikes or protests by car workers over just the past six months, over issues such as relocation, layoffs and unpaid wages. Recently, that resistance broke out among BYD workers.
CLB reported, “In a dramatic show of collective action, thousands of workers at BYD’s factories in Wuxi and Chengdu walked off the job in late March and early April 2025, protesting steep pay cuts and deteriorating working conditions.”
More than 1000 workers protested inside BYD’s Wuxi factory. Just days later, the spirit of resistance spread to BYD’s Chengdu facility, 1900 kilometres away, where workers staged similar protests.
BYD has built its EV empire on a business model that forces workers to do excessive overtime. CLB reported on a forklift driver at a BYD factory who worked 11 hours a day and took only five days off in a month. He earned about 5700 yuan ($1228)—but more than half of that came from a crushing 122 hours of overtime.
When it comes to EVs as with so much more, the imperialist powers are locked into competition, even where their economies are intertwined. It is this pressure that is fuelling a dangerous drive to war.
Car workers from Wuxi to Detroit, from Thailand to Hungary, have a common interest in standing against this spiral of doom.
Workers everywhere gain nothing from the argument between tariffs and free trade. Instead, we need to fight for control over our industries so that we can democratically plan our lives.
