President of the Lebanese Business Association Mr. Ali Mahmoud El-Abdallah: China's transition from manufacturing to thinking Innovation and creativity has scared the world
President of the Lebanese Chinese Business Association
Mr. Ali Mahmoud El-Abdallah: China's transition from manufacturing to thinking Innovation and creativity has scared the world
100 Years Since the Founding of the Chinese Communist Party
From Mao to Xi: The Era of Bullying Is Over
As China celebrates the 100th anniversary of the founding of the Chinese Communist Party, countries around the world continue to observe its experience through their own perspectives. Some watch with hope, others with concern, while a third group views China’s rise with mixed feelings of anxiety, anticipation, envy, and jealousy. But why is the world divided over the flourishing of the Chinese people and their economic and cultural growth, and why might major powers feel threatened by China’s rise to the world’s second-largest economy?
This can be understood through three major historical stages in China: agricultural development, the industrial revolution, and finally the technological revolution, which marked China’s shift from manufacturing to thinking, innovation, and creativity. This trajectory has caused fear, anger, and anticipation in countries that have long considered themselves unchallenged powers. The secret behind China’s remarkable rise is innovation, especially technological. Innovation allows independence from foreign investment, particularly in the era of the Fourth Industrial Revolution, where thinking, creativity, and innovation are daily essentials for emerging economies.
China emerged from the 19th century weakened by the First and Second Opium Wars against Britain, while also facing internal unrest and resisting foreign invasions, suffering a series of wars, especially after the fall of the Qing dynasty in 1911. When the Chinese Communist Party was founded, it made significant progress in unifying the nation and gaining the people’s trust. During this period, the new China was born, a constitution was established under the Party’s leadership, and the country was set on a path of gradual progress amid challenges and upheavals.
In the 1970s, following the era of China’s founder Mao Zedong, reforms led by Deng Xiaoping launched major economic changes under a market economy framework. Farmers were granted land-use rights, improving living standards and diversifying food production. China also opened its doors to foreign investment, particularly after resuming diplomatic relations with the United States in 1979. This period marked a remarkable phase in China’s economic reforms, with an unprecedented inflow of foreign direct investment driven by cheap labor, low rents, and high profit margins. Deng’s reforms lifted millions of Chinese out of poverty, improving the lives of hundreds of millions.
China then made a bold transition toward industrial development, beginning with traditional industries and gradually moving to medium-level industries. Within two decades, China became a global manufacturing hub not just an ordinary factory, but the factory the world relied upon to power the global economy. In the 1990s, the Chinese economy experienced striking growth, reaching record levels before joining the World Trade Organization in 2001. Subsequently, tariffs on Chinese products were reduced, enabling the “Chinese miracle” to unfold. Chinese products spread worldwide, and between 2001 and 2019, Chinese exports of machinery rose from a few billion dollars to over one trillion dollars, while consumer goods grew from several billion to around $900 billion. Similar growth occurred with intermediate goods, textiles, raw materials, and other exports. As during the agricultural stage, major industrial nations did not perceive China as a threatening competitor during the industrial rise.
However, the high-tech sector, which China began to actively support from 2007 onward, changed the entire equation. Chinese companies such as ByteDance (owner of TikTok), Huawei, ZTE, Alibaba, OnePlus, Tencent, and hundreds more exemplify this success.
This explains the hostility that began to form toward China’s success, particularly with the U.S. trade war against Huawei and NATO’s warnings about China’s technological rise. By the end of 2019, NATO entered the fray of the U.S.-China trade war, targeting 5G networks, which had become a central point of contention. While the U.S. imposed trade restrictions and warned allies of potential risks under the guise of security vulnerabilities in Huawei networks, NATO Secretary-General Jens Stoltenberg escalated concerns, calling Chinese technology including 5G, facial recognition, and the Internet of Things (IoT) a global security threat. Stoltenberg said Chinese technology “changes the way wars are fought and also changes our societies,” asserting that “our success (NATO) relies on technological superiority over potential adversaries.” These statements intensified the confrontation, which was no longer just U.S.-China but involved NATO’s 28 allies in Europe and North America. Stoltenberg also warned that China could collect data not only from China but globally, including from NATO member states, highlighting the risks of IoT technology to alliance security.
During China’s agricultural and industrial development, major industrial nations saw no threat because most Chinese-made equipment replicated high-quality foreign products at lower cost. The problem arose with China’s technological revolution, as China began “thinking” the foundation of innovation and creativity in the knowledge economy, where the power of ideas drives success. Many companies succeed based on a single idea, like WhatsApp, founded by Jan Koum and Brian Acton with a handful of employees, later acquired by Facebook’s Mark Zuckerberg for $16 billion in 2014.
To put the development in context, Chinese tech exports were valued at $359 billion in 2009 and grew at rates of 10–32% annually, reaching $715 billion in 2019, with Hong Kong exports at $322 billion. During the same period, U.S. tech exports totaled $156 billion. This highlights the core of the global tension: major industrial powers want China to remain a producer of candy machines, coffee machines, and Christmas lights indefinitely, while China leads in 5G and 6G networks, artificial intelligence, cloud computing, and big data analytics the “new digital oil” of the world.
What unsettles traditional industrial and technological competitors most is that China, by embracing “thinking” and innovation, no longer relies on foreign direct investment. How can a powerful country, self-sufficient in capital and technological creativity, be effectively challenged?
Perhaps for this reason, Chinese President Xi Jinping stated on the Party’s centennial: “The era of bullying China is gone forever,” echoing the spirit of Mao, who led the revolution and founded the Communist Party to end China’s subjugation, achieving unity, prosperity, growth, and well-being for the Chinese people.
President of the Lebanese Chinese Business Association
Ali Mahmoud El Abdallah