About the Authors
 

Ruixue Jia is Professor of Economics at the School of Global Policy and Strategy, University of California, San Diego.

Hongbin Li is Co-director of Stanford Center on China's Economy and Institutions, and a Senior Fellow of Stanford Institute for Economic Policy Research (SIEPR) and the Freeman Spogli Institute for International Studies (FSI) at Stanford University.

Claire Cousineau is a writer and former researcher at the Stanford Center on China’s Economy and Institutions, she is currently pursuing her MBA at Duke University.

Availability

The Highest Exam: How the Gaokao Shapes China is available now for purchase from Amazon and elsewhere.  

Upcoming Book Event

Join us on Tuesday, October 21 at 4 PM (Pacific) for a fireside chat with co-authors Ruixue Jia and Hongbin Li. The fireside chat will be held in-person in the Bechtel Conference Center and livestreamed for virtual attendees. Learn More & Register
 

Urgent Rethink Needed on U.S-China Trade and Technological Competition
Stein also pushed back against long-held assumptions that the U.S. market alone can dictate global business trends. The notion that “the only market that matters is the U.S. market” no longer holds, noting that Chinese consumers and innovation ecosystems now play a decisive role in shaping product development and global supply chains. He noted that European businesses have expressed a radical shift in strategy, they said, “we've been in China for Asia, in North America, for the Americas…We're now going from that model to what could very well become an, ‘in China for China and the world minus one.’ And the minus one is, of course, the U.S. market.”

On the technology front, he offered a candid evaluation of the U.S.-China competition. Stein reflected on the current state of artificial intelligence in China and the U.S., he said, “ at the end of the day it's not who has the best model; a good enough model is a good enough model, where it really makes a difference is in the application…and I see China racing ahead in the application of AI.” 

Know Your Competitor
Stein concluded with a call for more measured and constructive engagement. He urged both Washington and Beijing to establish clearer rules of the road, maintain open lines of communication, and invest in policy solutions that reduce uncertainty rather than amplify it.

Stein’s keynote offered a business-grounded counterpoint to prevailing narratives of decoupling and confrontation. His insights reinforced the importance of understanding the full complexity of economic interdependence, as well as China’s capacity for global market disruption, and the costs of miscalculation. As part of the broader SCCEI China Conference, his remarks served as a reminder that if America does not properly understand its competitor, efforts to stay ahead may well backfire and erode U.S. strength and global standing. 

A full recording of Sean Stein’s keynote is available on YouTube and below.

China’s Global Ambitions
In response to a question posed by Professor Li, Economy said, “I think, under Xi Jinping, there are big ambitions.” She followed by listing out several of China’s objectives including:

1. Become the dominant power in the Indo-Pacific, which begins with China's sovereignty claims around Taiwan, Hong Kong and the South China Sea;
2. Continue to have the international business community be dependent on China for parts of its supply chain;
3. Create an insulated domestic economy that is protected from pressures of the global economy but at the same time exerts enormous influence on it;
4. Shape the geostrategic and political landscape in new ways through programs like the Belt and Road Initiative and through its behavior in international institutions;
5. De-dollarize the global economy and increase the role of the Chinese currency.

Economy concluded by sharing that China has “a number of big ambitions, none of which actually coincides with us,” and although there are certainly areas for collaboration between China and the U.S., she’s not sure the current U.S. administration is interested in exploring them.

Economy’s address was a highlight of the SCCEI China Conference, which featured panels and presentations from leading scholars and practitioners on China’s economy, governance, and international strategy. The event reflects SCCEI’s mission to promote policy-relevant research and open dialogue on China’s role in the global economy.

A full recording of Dr. Economy’s talk is available on YouTube and below.

The talk culminated in a preview of Maggiori’s new research using large language models (LLMs) to analyze earnings calls and analyst reports at scale. His team leveraged AI to detect when companies reacted to government pressure—offering real-time visibility into geoeconomic tensions. Maggiori goes on to explain how tools like these allow us to capture threats that never appear in policy, in fact, “some of the most powerful threats never occur because the target complies.”

Maggiori’s talk emphasizes the need for economists and policymakers to develop and use better tools to measure power, model interdependence, and design policy that balances trade gains with national security; Because this is not just theory, these dynamics are shaping the world we live in today.

Watch the Full Talk Here

Before moving to a question and answer session moderated by SCCEI Co-Director Scott Rozelle, each panelist shared their insights on the topic through short-form presentations.

China’s Growth: From Industrialization to Innovation
Panelists highlighted the transformation of China’s economy, characterizing its past expansion as a result of rapid industrialization rather than a so-called "economic miracle." They described China’s growth in two stages: an initial phase driven by market expansion and a later phase, emerging after 2008, where state-led stimulus measures played a dominant role.

It was noted that China’s post-industrialization period has led to economic stagnation, as capital accumulation peaked in 2005, leaving excess capacity in key sectors. With investment-driven growth slowing, experts emphasized the need for a shift toward innovation. However, this transition requires structural changes, including stronger rule of law, well-functioning markets, and better incentives for entrepreneurship. While China excels in commercialization, it still lags behind other leading economies in basic and applied research, critical components for sustained innovation.

China’s Industrial Dominance: Successes and Costs
The discussion also analyzed China’s dominance in industries such as lithium batteries, electric vehicles, solar panels, and shipbuilding. The country’s success in these sectors was attributed to industrial policies that strategically direct state resources into key industries. However, these policies come with economic inefficiencies, including excessive production capacity and stagnating productivity growth.

While China’s industrial policies aim to reduce reliance on foreign technology and foster indigenous innovation, they have also led to concerns about global trade imbalances. For instance, China’s trade surplus in manufactured goods now significantly surpasses that of historical export champions Germany and Japan, disrupting global markets. Despite substantial investments in research and development, overall productivity growth has slowed, raising questions about the long-term viability of its industrial policies.

Trade Tensions and U.S. Policy Responses
The panelists also explored how China’s development model has triggered trade tensions with the U.S. and other nations. They noted that industrial subsidies, state ownership, forced technology transfers, and non-tariff barriers have led to accusations of unfair trade practices. In response, the U.S. has imposed tariffs, blocked WTO dispute resolution mechanisms, and debated revisions to trade agreements, including the Phase 1 trade deal.

Some participants suggested that while U.S.-China relations remain contentious, future shifts in U.S. foreign policy—such as improved U.S.-Russia ties under the new Trump administration—could influence the direction of trade negotiations with China. However, national security concerns and economic competition in emerging sectors like AI and clean energy will likely keep tensions high.

Looking Ahead
The discussion collectively emphasized that China’s economy will face significant challenges if it doesn’t move from an investment-driven approach to one centered on innovation. While China continues to exert influence in key industries, questions remain about its ability to sustain long-term growth without addressing underlying inefficiencies. Meanwhile, U.S. trade policies will play a crucial role in shaping the future of global economic competition.

The event underscored the complexity of U.S.-China economic relations, with industrial policy at the heart of the debate. As both countries navigate these challenges, the global economy will continue to feel the ripple effects of their evolving competition.