It’s impossible to contain China – just look at how their products have improved

A NIO Inc ET7 electric vehicle on display at the NIO House showroom in Berlin, Germany, last July. Bloomberg

In certain circles, it has long been taken as an article of faith that China must be “contained”. But after the country’s President, Xi Jinping, met private sector leaders this week and publicly welcomed Alibaba founder and business wunderkind Jack Ma back into the fold, Chinese stocks continued what had been described as a “blistering rally”. Taken in conjunction with other recent events, it has become clear that the country has reached a new stage: once it sets its mind on something, there’s no stopping it.

Take AI. It was only last month that the announcement of DeepSeek, China’s start-up AI model, sent shock waves through Wall Street. According to its development team, for only $6 million they had created a model that could rival those of the Silicon Valley giants. US chip giant Nvidia lost nearly $600 billion in market value after the announcement.

Or take Huawei. The company chose a 2023 visit to Beijing by then US commerce secretary Gina Raimondo to unveil a new phone that appeared to demonstrate that they had managed to get around American sanctions that were supposed to hinder Chinese progress in its domestic semi-conductor industry.

By last December, Ms Raimondo was conceding defeat. “Trying to hold China back is a fool’s errand,” she said in an interview. “The only way to beat China is to stay ahead of them. We have to run faster, out-innovate them. That’s the way to win.”

I’ve observed how swiftly China can advance in the niche field of mechanical watches over the past few years. Not so long ago, Chinese models were a byword among watch enthusiasts for cheap copies of Swiss brands. They were unreliable, had poor quality control and were frankly considered a bit trashy. Did you really want to buy a knock-off Rolex whose mechanism ran badly, whose crown felt like gravel when you wound it, and could instantly be spotted as a fake?

DeepSeek and ChatGPT: how do they compare?

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But over the past five years, they have just got better and better and better. Many Chinese companies still manufacture “homages” – that is 100 per cent lookalikes, apart from the brand logo. But the levels of craftmanship have soared, to the point that, with some watches, the logo is now the only visible difference. The fit and finish is entirely on a par with $4,000 or $5,000 Swiss watches – but for perhaps one twentieth of the price. Now the leading Chinese watch companies are creating their own designs, too, so they cannot be dismissed as just copies. They don’t have the same prestige, for now, but China is already producing pieces that can compete with the famous Swiss, German and Japanese watch industries.

The realisation that China can do far better than cheap, low-quality goods is affecting one of the biggest markets in the world – its own. Home demand for high-end Chinese cars has soared, as they can now equal the specifications of the previously highly prized German imports, integrate AI in all sorts of ingenious ways, and cost much less. Porsche, to take one example, has taken a huge hit as a result. Last year, its deliveries in China were down by 28 per cent – and that was enough to translate into a 3 per cent fall in its worldwide deliveries. One analyst put it that Chinese consumers were now ready to accept that Chinese companies can produce “premium”.

Those are just two examples. In other fields, China is a well-established leader. In 2023, it accounted for more than 80 per cent of global solar panel production. It’s the biggest global exporter of electric vehicles. China leads in hydrogen and wind-powered installations, and it is home to what is said to be the world’s first zero-carbon factory, in Sichuan province.

A giant screen shows news footage of Chinese President Xi Jinping shaking hands with Alibaba Founder Jack Ma during a symposium on private enterprises in Beijing this week. Reuters

The only way you could see any of this negatively is if you believe that others’ gains are necessarily your losses

This shouldn’t be news to anyone, but perhaps deserves to be more widely known. I remember one of South-East Asia’s top sustainability experts telling me years ago that China had made huge advances in green technology, but that the country didn’t seem to get the credit for it. Perhaps that’s because of the perverse way these positive steps are sometimes portrayed – “US, Europe alarmed at China’s dominance of clean energy technologies” was one headline I read while researching this column.

The reality is that China’s breakthroughs in manufacturing and technology are gifts to us all, and they leave us all with more choice. I bought a new tablet recently and for the first time, I seriously considered a Chinese model, spending hours in various shops, as I know how good they have become. I didn’t look at Xiaomi, but I could have done. They entered the market in Malaysia, where I live, in 2014. Eleven years later, a recent report says the company is the top seller of mobile phones in the country.

To me, all of this is remarkable, and if Chinese apps such as DeepSeek – which was number one on the Apple app store's Top Free Apps chart in late January – TikTok and RedNote are opening the eyes of young people in the rest of the world to a China that doesn’t seem to be quite how their leaders sometimes paint it, that’s all to the good, too.

The only way you could see any of this negatively is if you believe that others’ gains are necessarily your losses. But economists know that this is not a zero-sum world, and so does anyone interested in culture. You can try to “out-innovate” China, as Ms Raimondo suggested last December, if you want. It would be distinctly ungenerous, however, not to stand back occasionally and marvel at the country’s ability to advance so far, so quickly. China’s achievements will, after all, benefit us all.