Trade ties alone will not win China goodwill in the developing world
Both Beijing and its economic partners must ask whether expanding trade strengthens domestic productive capacity and improves long-term competitiveness
For over two decades, governments across the developing world have viewed closer economic ties with China as an essential component of their economic development strategies. As the world’s second-largest economy, China offers access to an enormous consumer market, abundant capital and an increasingly sophisticated industrial ecosystem.
China is now among the top three trading partners for 157 countries and regions worldwide, while bilateral trade with many developing economies has reached record highs. These figures are frequently cited as evidence of China’s growing international influence and the mutual benefits of economic integration.
Yet headline trade figures tell only part of the story. Governments often assume that larger trade volumes automatically translate into stronger economic relationships. A more meaningful question is whether expanding trade strengthens domestic productive capacity, diversifies exports and improves long-term competitiveness.
Vietnam, a major importer of Chinese goods, demonstrates one end of the spectrum. Chinese machinery, electronic components and industrial inputs account for a substantial share of Vietnam’s imports.
Indonesia presents a more complex example. After relying heavily on exports of raw nickel ore, Jakarta banned unprocessed nickel exports and promoted domestic processing. Chinese investment became central to developing Indonesia’s nickel refining industry and its role in the electric vehicle battery supply chain.