I was reading this article by Kyle Chan on the great reversal in technological dominance. Until recently, the West was the undisputed leader across “all” technologies, but now the tables have turned. China is now the top dog across a whole range of industries from EVs, solar, AI, robotics to pharma that Western companies are now licensing Chinese tech and acquiring Chinese startups. This was unthinkable even a decade ago.

So I asked ChatGPT the following question and asked it write an essay explaining the reasons behind China’s industrial success and it wrote the follow essay. Me thinks this is pretty good:

Did China really ask Western companies to transfer technology in return for market access—and is that why China is so dominant today?

Yes, the “market access for technology” pattern was real in important parts of China’s rise—especially from the 1990s through the 2010s, when foreign firms often needed joint ventures, licenses, or approvals to operate in China in sensitive sectors. U.S. government findings around the Section 301 investigation explicitly describe China using joint-venture requirements, foreign investment restrictions, and administrative review/licensing processes to “require or pressure” technology transfer.

But that alone does not explain China’s dominance across so many industries. Many countries have received foreign technology; very few have built what China built: a nationwide industrial system that turns scale into learning, learning into cost and quality, and cost/quality into global market share.

A more accurate summary is:

Tech transfer (sometimes coerced, sometimes voluntary) helped China learn faster in some sectors.

China’s dominance comes from the industrial flywheel around that learning: scale, supply-chain density, capital, infrastructure, competition, and ruthless iteration.

China has also changed laws to formally prohibit forced technology transfer by administrative means (notably in the Foreign Investment Law effective Jan 1, 2020), even as trading partners argue that indirect pressure can still exist in practice.

What follows is a single “best-of-both” essay: your original question as the prompt, plus a deeper tour of AI, robotics, pharma/biotech, and a set of “quietly dominant” industries that many people underestimate.

  1. Where tech transfer fits in the real story

The old bargain: access for know-how

For decades, China had an unusually strong negotiating position: a vast market that multinationals wanted to enter, and a government willing to use market access as leverage. The USTR’s 2018 Section 301 fact sheet lists “joint venture requirements,” “foreign investment restrictions,” and “administrative review and licensing processes” as channels used to pressure technology transfer.

This dynamic often played out in very ordinary ways: foreign firms seeking approvals could be encouraged to localize R&D, share source code, share manufacturing know-how, or partner with local entities. Sometimes it was explicit. Often it was “soft coercion”—the kind where nothing is written down as “forced,” but the path of least resistance runs through a local partnership.

The legal shift: prohibition on “forced” transfer (on paper)

China’s Foreign Investment Law (effective January 1, 2020) states: “No administrative department or its staff member shall force any transfer of technology by administrative means.” The USTR’s 2024 Four-Year Review executive summary acknowledges that the tariffs and trade pressure appear to have induced China to issue or amend certain measures to prohibit forced technology transfer, while also arguing concerns remain.

So the cleanest answer to your question is:

Historically: yes, tech transfer pressure was a meaningful feature of the system.

Formally today: China says “no forced transfer,” and the law reflects that.

In practice: major trading partners still debate whether indirect coercion persists.

But here’s the key: even if you grant the strongest version of the forced-transfer story, it still doesn’t explain China’s breadth of dominance. That breadth comes from something bigger.

  1. The real engine: China built an “industrial learning machine”

When people say “China is dominant,” they often imagine a single advantage—cheap labor, currency, subsidies, espionage. The reality is more like a machine with multiple gears that mesh.

Scale is not just size—it’s a way of learning

In manufacturing-heavy industries, the biggest long-run advantage is often not a brilliant invention, but a faster learning curve: making a thing millions of times, squeezing out defects, improving yields, redesigning tooling, training workers and engineers, building supplier capability, and iterating quickly.

China used its domestic market and export base to get to scale early. Once you reach that scale, you gain three structural powers:

  1. You push costs down through volume and process improvement.

  2. You attract suppliers and talent because everyone wants to be near the largest buyer.

  3. You get faster iteration cycles because the factory is effectively a live lab.

You can see this most clearly in solar, EVs/batteries, and industrial robots—sectors where China’s advantage is not just one company, but a whole ecosystem.

Supply-chain density: “industrial neighborhoods” that compound

China didn’t only build final assembly. It built dense clusters: components, materials, tooling, machine builders, logistics providers, and specialized subcontractors co-located. This matters because innovation is often manufacturing feedback: suppliers propose design tweaks; factories modify tooling; defects get caught early; materials get reformulated; costs drop.

That “industrial neighborhood” effect is why a surprising number of products can be designed, prototyped, sourced, manufactured, and shipped faster in Chinese clusters than in more fragmented industrial geographies.

Capital + infrastructure: not always efficient, often decisive

China’s system has repeatedly been willing to finance capacity buildout and infrastructure at scale. This can create overcapacity and waste, but it also creates capability. Gigantic ports, industrial parks, grid buildouts, and logistics networks make manufacturing more reliable and less costly at the system level.

Competition inside China is brutal—and that accelerates competence

A common misunderstanding is that China’s firms are protected and lazy. In many consumer and industrial segments, competition is ferocious: dozens of firms fighting on price, speed, features, and supply-chain optimization. Firms that survive become extremely sharp operators.

That produces an underappreciated outcome: China doesn’t only scale production; it scales learning across many competing firms at once, and the winners emerge globally competitive.

  1. Dominance case studies (the flywheel in action)

Solar PV: the cleanest example of “ecosystem dominance”

The International Energy Agency (IEA) notes that China’s share in all manufacturing stages of solar panels exceeds 80%, spanning polysilicon, ingots, wafers, cells, and modules. It also notes China invested over USD 50 billion in new PV supply capacity since 2011 and created hundreds of thousands of jobs across the value chain.

This is dominance not just in finished panels, but in upstream materials and midstream processing—and even in equipment: the IEA report points out China is home to many top suppliers of PV manufacturing equipment.

Even if foreign technology helped early on, solar is primarily a story of:

scaling fast,

winning process engineering,

building upstream capacity,

and crushing costs through learning curves.

EVs and batteries: demand + manufacturing + chemistry

The IEA’s Global EV Outlook 2025 describes China as the EV manufacturing hub, responsible for more than 70% of global electric car production in 2024. On the demand side, the IEA reports that in China, electric car sales have been close to 50% of total car sales (with monthly electric-car sales overtaking conventional cars since July 2024).

On batteries, IEA data says China was responsible for 80% of global battery cell production in 2024, and it highlights China’s especially large shares in battery components like cathode and anode active materials.

What’s going on here is not “one clever EV design.” It’s a full stack:

upstream materials (and refining),

midstream components,

cell manufacturing scale,

and product iteration in the world’s largest EV market.

Critical minerals refining: the quiet choke point

Even when mining happens elsewhere, refining and processing often determines who captures value and who controls supply reliability.

The IEA’s Global Critical Minerals Outlook 2025 and a related IEA commentary note that China is the leading refiner for 19 out of 20 strategic minerals, with an average market share around 70%, and that concentration risks have intensified.

This matters because it makes downstream dominance easier. If your country is where the refined inputs are cheapest and most reliable, your manufacturers tend to cluster there too.

Shipbuilding: heavy-industry depth + policy + scale

UNCTAD’s Review of Maritime Transport 2025 reports that China’s share of world shipbuilding output rose from about 50% in 2023 to around 55% in 2024, and that China accounted for 74.4% of contracted gross tonnage in 2024, with 63.7% of the global orderbook at the start of 2025.

The OECD has also published a dedicated report analyzing China’s shipbuilding industry and the policies affecting it, with emphasis on government support measures and the sector’s structure.

Again, this is not a story of “stolen ship designs.” Shipbuilding dominance comes from integrated heavy industry, financing, yards, suppliers, standards competence, and stable order flow.

  1. The “people don’t realize China dominates” industries

A) Industrial robotics: the world’s biggest deployment machine

The International Federation of Robotics (IFR) reports that China represented 54% of global industrial robot deployments in 2024 (295,000 units installed), and that China’s operational robot stock exceeded 2 million—the largest of any country.

That matters even if China were not yet the best robot-maker, because deployment is a learning engine. The more robots you deploy across factories, the more you learn about integration, reliability, maintenance, and process redesign. That “factory data” and engineering feedback loop accelerates domestic suppliers too—the IFR notes that for the first time, Chinese manufacturers sold more than foreign suppliers in their home country, with domestic market share rising.

This is also where the “physical AI” wave is headed: combining machine learning with robotics to move beyond rigid, repetitive automation toward more adaptable systems.

B) AI: not necessarily first at the frontier, but moving fast at scale

Stanford’s AI Index 2025 notes the U.S. still produced more “notable AI models” in 2024 (40) than China (15), but also reports that Chinese models rapidly closed performance gaps on major benchmarks, shrinking from double digits in 2023 to near parity in 2024, while China continues to lead in AI publications and patents.

This gives you a clearer picture than the memes. The U.S. may lead the absolute frontier, but China is building a massive AI ecosystem with three advantages:

  1. Deployment at scale (huge markets create fast product feedback loops).

  2. Constraint-driven efficiency (when top chips are restricted, incentives rise to optimize).

  3. Integration into manufacturing (AI + robotics + industrial data is a compounding combo).

On patents, WIPO’s generative AI landscape documents explosive activity in GenAI inventions over 2014–2023 and highlights China-based inventors filing the largest number.

C) Pharma and biotech: from “cheap APIs” to “global pipeline”

This is one of the most underappreciated shifts.

(1) APIs and the invisible base The U.S. Pharmacopeia (USP) Medicine Supply Map analysis (Jan 2026) notes that China surpassed India in annual API DMF filings in 2024, taking the top position with 45% of new API DMF filings. That doesn’t mean India disappears—India still has a huge installed base—but it signals where new capacity is growing.

(2) Innovation export: the licensing wave is the tell When Western pharma increasingly licenses China-origin molecules, that’s a market signal: China is not only manufacturing; it’s producing assets worth buying.

Reuters has reported multiple major deals:

Merck licensing rights to a heart disease drug candidate from Jiangsu Hengrui in a deal worth up to ~$2B.

Merck signing an obesity-drug deal with China’s Hansoh worth up to ~$2B.

Merck licensing an experimental cancer drug from China-based LaNova in a deal up to ~$3.3B.

At the “meta” level, McKinsey notes upfront payments from China-originated out-licensing deals rising from below ~$100M in 2020 to over ~$800M in 2024.

So the picture is: China is becoming both

a manufacturing base (APIs, intermediates), and

a deal-flow source (innovative molecules increasingly integrated into global pipelines).

D) Drones: China’s consumer/industrial dominance with a Shenzhen-style cluster

Drones are a classic “quiet dominance” sector because most people only notice them when there’s a national security debate.

Multiple sources commonly cite DJI’s huge global market share (often 70%+ in civilian/consumer segments). For example, FDD notes DJI controls over 70% of the global drone market. What matters economically is that drones combine:

sensors,

motors,

batteries,

manufacturing,

software,

and supply-chain integration—exactly the kind of stack where China’s ecosystem advantage shows up.

And geopolitics is now directly shaping the market: for instance, U.S. regulatory actions and restrictions have escalated in recent months.

E) Chemicals: the industrial substrate beneath everything else

Chemicals are not glamorous, but they are foundational: plastics, solvents, fertilizers, industrial gases, specialty materials—inputs into electronics, autos, pharma, construction, textiles, and more.

ITIF reports that in 2022 China accounted for 44% of global chemical production and 46% of capital investment in chemicals, with strength in basic chemicals and an ongoing push into higher-value segments.

This matters because chemical capability is one of the “hidden moats” behind industrial power: it supports domestic manufacturing resilience and lowers input costs across many value chains.

  1. So what actually makes China “utterly dominant”?

The core flywheel (expanded, not bullets)

China’s dominance is the compound interest of industrial learning. Once you have enormous domestic demand and deep supply chains, every incremental improvement—yield gains, factory automation, better tooling, supplier upgrades, logistics speed—multiplies across millions of units. Costs fall. Quality rises. Exports become irresistible. Foreign firms become dependent on Chinese suppliers. More suppliers move to China. The flywheel spins faster.

Industrial policy amplified the flywheel. Policy didn’t need to be perfect; it needed to be persistent. Capacity buildouts, industrial parks, infrastructure, procurement, and financing often helped sectors reach scale faster than they would under purely private capital constraints. The consequence is sometimes waste and overcapacity—but also rapid capability formation.

Competition selected the winners. Inside China, firms fought intensely in huge markets. The survivors built world-class operational competence: faster iteration cycles, sharper supply chains, relentless cost-down, and increasingly strong product engineering. In many industries, the “China advantage” is not a single secret—it’s that Chinese firms got more reps at scale, faster.

Control over upstream inputs and processing anchored downstream dominance. In sectors tied to the energy transition and electronics, refining/processing concentration gives China a structural advantage: it’s easier to build battery factories, solar supply chains, magnet production, and electronics clusters near reliable refined inputs. The IEA’s refining concentration numbers capture this clearly.

Tech transfer was a catalyst in parts of the story, not the engine. Technology transfer can help you catch up, but it doesn’t automatically build:

80%+ shares across full supply chains (solar),

80% global battery cell production,

54% of global robot deployments,

leading refining shares across 19/20 strategic minerals,

or shipbuilding orderbooks above 60%.

Those are ecosystem outcomes.

  1. What this implies for the rest of the world (and why it’s hard to replicate)

Countries trying to compete often try to “build a factory.” China built:

the suppliers,

the machine builders,

the industrial engineers,

the skilled labor pools,

the ports and power,

the standards and procurement,

and the demand.

That’s why “reshoring” and “de-risking” are so difficult: the hard part is not one plant; it’s the neighborhood—and the learning loops that come from repeating production at huge scale.

Key sources (URLs in one place)

(You asked for hyperlinks. Here are direct links in a clean block.)

USTR Section 301 fact sheet (2018): https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/june/section-301-investigation-fact-sheet USTR Four-Year Review exec summary (2024): https://ustr.gov/sites/default/files/05.13.2024%20Executive%20Summary%20of%20Four%20Year%20Review%20of%20China%20Tech%20Transfer%20Section%20301%20%28Final%29_0.pdf China Foreign Investment Law (English, NDRC): https://en.ndrc.gov.cn/policies/202105/t20210527_1281403.html

IEA Solar PV Global Supply Chains (exec summary): https://www.iea.org/reports/solar-pv-global-supply-chains/executive-summary IEA Solar PV Global Supply Chains (full PDF): https://iea.blob.core.windows.net/assets/2d18437f-211d-4504-beeb-570c4d139e25/SpecialReportonSolarPVGlobalSupplyChains.pdf

IEA Global EV Outlook 2025 (main): https://www.iea.org/reports/global-ev-outlook-2025 IEA EV batteries chapter: https://www.iea.org/reports/global-ev-outlook-2025/electric-vehicle-batteries IEA trends in China electric car markets: https://www.iea.org/reports/global-ev-outlook-2025/trends-in-electric-car-markets-2

IEA Global Critical Minerals Outlook 2025 (exec summary): https://www.iea.org/reports/global-critical-minerals-outlook-2025/executive-summary IEA commentary on export controls + refining concentration: https://www.iea.org/commentaries/with-new-export-controls-on-critical-minerals-supply-concentration-risks-become-reality

IFR press release (global robot demand; China numbers): https://ifr.org/ifr-press-releases/news/global-robot-demand-in-factories-doubles-over-10-years IFR China press PDF: https://ifr.org/downloads/press_docs/2025-09-25-IFR_press_release_China_in_English.pdf

Stanford AI Index 2025 (landing): https://hai.stanford.edu/ai-index/2025-ai-index-report Stanford AI Index 2025 (PDF): https://hai.stanford.edu/assets/files/hai_ai_index_report_2025.pdf

WIPO GenAI patent press page: https://www.wipo.int/pressroom/en/articles/2024/article_0009.html WIPO GenAI patent landscape PDF: https://www.wipo.int/web-publications/patent-landscape-report-generative-artificial-intelligence-genai/assets/62504/Generative%20AI%20-%20PLR%20EN_WEB2.pdf

USP analysis on API DMF filings (Jan 2026): https://qualitymatters.usp.org/global-manufacturing-capacity-active-pharmaceutical-ingredients-remains-concentrated

UNCTAD Review of Maritime Transport 2025, Chapter 2 (shipbuilding stats): https://unctad.org/system/files/official-document/rmt2025ch2_en.pdf OECD shipbuilding report: https://www.oecd.org/content/dam/oecd/en/publications/reports/2021/04/report-on-china-s-shipbuilding-industry-and-policies-affecting-it_f15b480d/bb222c73-en.pdf

McKinsey on Asia biopharma / China out-licensing (Jan 2026): https://www.mckinsey.com/industries/life-sciences/our-insights/the-emerging-epicenter-asias-role-in-biopharmas-future ITIF on China in chemicals (Apr 2024): https://itif.org/publications/2024/04/15/how-innovative-is-china-in-the-chemicals-industry/ FDD on DJI market share (Jun 2024): https://www.fdd.org/analysis/2024/06/12/5-things-to-know-about-chinese-drone-company-dji/