In recent months, Chinese factories have been cutting sticker prices even as they keep building more capacity. Automakers sweeten deals weekly. Solar and battery firms announce new lines as if demand will catch up by sheer force of supply, in an oversupplied market. Headlines reach for the easy comparison – Japan’s 1990s – but that frame misses what matters for the Indo-Pacific. China may be flirting with factory-gate deflation, yet it is not turning inward. It is pushing capacity outward, selling more abroad, supplying more of the components others need, and building plants where customers are. That shift is already visible in the run of trade actions in the West and the flurry of new groundbreakings across Southeast Asia.
Consider Europe’s recent measures on Chinese battery electric vehicles – one sign of how politics is catching up with trade. The European Commission has imposed definitive countervailing duties on BEVs from China, confirming that the subsidy debate is now shaping market access.
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