The BlackRock Investment Institute stated in its weekly market commentary that China is climbing the manufacturing value chain, increasingly competing on quality in cutting-edge industries such as electric vehicles, batteries, advanced machinery, and artificial intelligence, rather than relying solely on low-cost mass production.
Citing International Monetary Fund Direction of Trade Statistics, BlackRock reported that China accounted for 14.8% of global merchandise exports in 2025, while its share of global merchandise imports fell to 9.8%. The institute attributed the widening gap to domestic supply chains expanding within China alongside domestic demand trailing industrial output.
BlackRock researchers observed that lower-cost Chinese technology reduces expenses for global end users while putting downward pressure on margins and market shares for foreign competitors. However, the commentary noted that rapid market share gains inside China do not universally produce corporate profit growth, as intense domestic rivalry continues to compress margins in certain sectors.
In financial markets, the report noted that through September 21, the MSCI China index had dropped 11% in US dollar terms year-to-date, whereas the MSCI China Information Technology index gained 7%. BlackRock reiterated a neutral overall stance on Chinese equities, favoring focused segments where revenue growth translates into resilient margins, particularly physical AI and specialized hardware.
Sources
- BlackRock · 2026-09-29
