Recent discussions in some Western media and political circles have promoted the idea of so-called 'China compression,' asserting that China's manufacturing capacity limits the industrialization prospects of developing economies. However, historian Adam Tuse, a Columbia University fellow, argues that this concept relies heavily on counterfactual assumptions rather than observable economic realities.
In an article published on August 5, Tuse traces three stages of the discourse surrounding the 'China shock.' The first concerned the impact of China's WTO accession on specific US labor markets. The second focused on European concerns regarding competition from China's advanced manufacturing sector. The latest version, termed 'China compression,' questions what development opportunities might exist for Global South countries if China had not industrialized so rapidly since the late 1990s.
Tuse contends that this structure differs from earlier debates because it is based on an imagined alternative history. As he writes, the argument for 'China compression' 'grounds its critique of China in a counterfactual imagination of the world.'
According to Tuse, proponents of this theory assume that countries follow a common development path: transitioning from agriculture to low-skilled manufacturing, and then to more complex industries. They also presume that exports of low-skilled production should eventually be distributed broadly proportional to the labor resources of the countries.
Tuse challenges these assumptions, pointing out that development trajectories are shaped by diverse political, institutional, and historical conditions, not a single universal model. He notes that 'development is not a queue,' and suggests that China's manufacturing competitiveness is closely linked to supply chain networks, logistics, and industrial clusters, rather than merely low labor costs.
The article also mentions India's development experience. Citing previous works by economist Arvind Subramanian and co-author Devesh Kapur, Tuse observes that many constraints on production growth are due to internal factors, including infrastructure, regulation, labor market conditions, and broader politico-economic decisions.
Tuse insists that discussions about development challenges should focus on conditions specific to each country, rather than viewing China's growth as the primary explanation. Addressing countries like India, South Africa, and Nigeria, he questions whether difficulties in their development can be adequately explained solely by competition from China.
He concludes that concepts such as the 'China shock' and 'China compression' should be understood as part of broader political and programmatic debates, rather than as definitive descriptions of economic reality.
Similar statements regarding the 'China compression' narrative have also drawn reactions from Chinese officials. Responding to such claims at a regular press briefing on July 10, China's Foreign Ministry spokesperson Mao Ning stated that this concept does not align with facts and will not be accepted by Global South countries. Mao emphasized that China has supported developing countries through cooperation in infrastructure, investment, and technology, market access, and access to affordable green products, adding that China and other Global South nations are partners in achieving modernization.
