A new report from Rhodium Group warns that China has implemented an “industrial policy of everything,” an unprecedented state-driven effort to dominate global markets in at least 24 priority sectors. The report, prepared for the U.S. Chamber of Commerce, details a strategy that extends far beyond high-tech goods to include mature industries, services, and critical supply chain chokepoints.
"As dependence on China increases, the capacity of foreign governments to mitigate that dependence diminishes,” the Rhodium Group report warns. This highlights the core strategic risk for competing economies as Beijing’s policy seeks to make global supply chains reliant on Chinese exports.
The scale of China's ambition is reflected in its growing market dominance. The number of industries where China controls more than 50 percent of global export volumes surged to 315 in 2024, up from 163 in 2016, according to Rhodium's analysis. While its latest five-year plan added advanced sectors like “brain-computer interfaces” and “nuclear fusion,” it also expanded support for mature industries like household appliances and textiles, areas where Chinese firms are already competitive.
At its core, the policy is a national security strategy designed to eliminate China's reliance on foreign technology while making other nations more vulnerable to its economic pressure. By prioritizing “chokepoint” products, Beijing gains the ability to disrupt entire production lines abroad, a tactic already deployed with critical minerals and giving it significant leverage in trade disputes.
Chokepoint Strategy in Action
The strategic threat of this policy was recently underscored during a U.S. trade delegation's visit to Beijing. U.S. Trade Representative Jamieson Greer gave China a mere "passing grade" on its commitment to ease export controls on rare earths, which were imposed in 2025. According to a Reuters report, Greer noted that U.S. officials still have to intervene on behalf of companies facing shipment delays.
The controls have specifically targeted materials like yttrium, a rare earth produced only in China that is vital for the U.S. semiconductor and aerospace industries. While Greer confirmed the U.S. had recently received large shipments, a significant deficit remains compared to previous export levels, demonstrating China's ability to throttle supply at will.
An Unsolvable Competitive Threat?
Countering Beijing’s strategy has proven difficult. While former President Trump’s tariffs reduced the direct U.S. trade deficit with China, they failed to stop the broader trend of Chinese market share gains. China simply redirected its exports to other countries, and the value of Chinese-made components within global supply chains remained high.
The report suggests the competitive threat now extends beyond hardware. As Chinese electric vehicles, which often incorporate domestic software and artificial intelligence, gain market share globally, they could establish Chinese technology as the new international standard, displacing U.S. and other Western rivals. This creates a long-term challenge that cannot be solved by tariffs on finished goods alone.
While some critics point to China’s mounting debt, deflation, and demographic pressures as the policy's ultimate undoing, there is no sign of an imminent collapse. The report concludes with a stark warning: China’s state-subsidized industrial complex can likely remain irrational longer than its foreign competitors can remain solvent.
This article is for informational purposes only and does not constitute investment advice.
