Renowned business advisor Ram Charan has issued a stark warning, framing China's massive trade strategy not as mere commerce but as a form of economic conquest. In an analysis, Charan argues that China's unprecedented trade surplus, projected to exceed $1 trillion for 2025, is a deliberate tactic to dominate global industries and crush competition worldwide.
The "90% Model": China's Weapon of Choice
At the heart of this strategy, according to Charan, is what he terms China's "90% model" of excess production capacity. This power, exercised by President Xi Jinping, allows Beijing to identify a critical global industry and build enough capacity to produce 90% of the world's demand. Subsequently, it floods international markets with subsidized exports, priced at marginal cost and supported by what analysts estimate is a 20% undervalued currency.
This approach swiftly eliminates competitors who cannot match the artificially low prices. A recent example underscores the vulnerability this creates: in October 2025, Beijing's threat to cut off supplies of rare-earth magnets to the United States brought key American industries—from defense and electric vehicles to semiconductors and pharmaceuticals—to the brink of paralysis within days.
A Call for Coalition: Five Steps to Counter China
Charan contends that the United States, under President Trump, must treat this challenge not as a simple trade dispute but as a strategic conflict requiring a united front. He proposes a five-step plan reminiscent of building a wartime coalition.
First, America must stop acting alone. The combined GDP of the US and its core allies—Europe, Japan, South Korea, Israel, and the UK—is roughly $60 trillion, vastly overshadowing the approximate $25 trillion collective GDP of China, Russia, Iran, North Korea, and their allies. Coordinated action on tariffs, export controls, and currency pressure could, Charan asserts, break down China's industrial machine.
Second, create an expert "Manhattan Project"-style unit with allied representation. This group would be led by a globally recognized CEO with China experience and include game theorists, chemical engineers, and operators capable of executing counter-strategies at speed.
Third, acknowledge the long-term nature of this fight, which could last decades, and build sustained public and business support using authentic data.
Fourth, establish a Department of Manufacturing via Congress to rebuild US capacity in ten critical sectors targeted by China: bio-pharma, artificial intelligence, aerospace, high-tech ships, robotics, advanced rail, electric vehicles, power equipment, advanced agriculture, and new materials.
Fifth, rationalize the tariff system within 90 days, moving to reciprocal duties if necessary, and quickly negotiate with allies to present a coordinated, not chaotic, front.
Identifying the Allied Leverage: A Threshold of Pain
The path to compelling China to negotiate in good faith, Charan suggests, lies in leveraging what the US and its allies uniquely control. These are critical inputs that Chinese factories depend on but cannot produce themselves in sufficient quantities.
This includes:
- Ultra-pure chemicals for semiconductor manufacturing.
- Specialty catalysts for oil refineries.
- Precision equipment for processing rare earth minerals.
- Agricultural protein, which China imports by tens of millions of tons annually.
While these may be smaller-dollar imports, tens of billions of dollars in Chinese industrial output rely on them. Coordinated export controls deployed by America and its allies could degrade China's processing operations and stall its industrial machine, creating a "threshold of pain" that Beijing cannot tolerate.
Ram Charan, an adviser to CEOs and boards and author of the forthcoming book "China's 90% Model," concludes that the world is witnessing economic warfare on an unprecedented scale. The response, he argues, must be equally strategic and united.
