‘This should terrify every CEO’: How Xi Jinping’s China destroyed 10 American industries

China, the largest economy in Asia, is a manufacturing powerhouse. It has grown at a phenomenal pace over the last three decades. But that rise is now unsettling other economies, including the US.

China has already hollowed out multiple industries in America – and the playbook behind it is what veteran business consultant Ram Charan calls the ’90 per cent Model’.

For the first time, Charan, an Indian-American business consultant and Harvard Business School Baker Scholar, has explained in his latest book how Xi Jinping’s China became a manufacturing giant.

“China’s economic model is designed to destroy competitors,” Charan writes in his book ‘China’s 90% Model’. “At the heart of all this is what I call the 90 per cent excess production capacity model.”

According to the scholar, China’s strategy is brutally simple: Build enough industrial capacity to meet 90 per cent of global demand in a targeted sector, undervalue the currency by about 20 per cent to make exports unbeatable on price, flood the market with subsidised exports, and force competitors out of business.

“China has already done this in apparel, furniture, toys, consumer electronics, basic chemicals, rare earth processing, pharmaceutical ingredients, telecom infrastructure, lithium battery manufacturing, and solar panels,” he writes.

And now, according to Charan, Beijing is targeting industries that matter most: automobiles, defence, semiconductors, critical minerals, pharmaceuticals, chemicals, telecom, and other strategic sectors.

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The book, aimed largely at CEOs and policymakers, argues that almost all of China’s high-quality, high-tech manufacturing capacity was built in the last 10 years – “and all of it is funded by trillion-dollar trade surpluses accumulated through currency manipulation.”

For Beijing, return on capital is irrelevant, the veteran adviser argues. As one Chinese executive told him, “If we don’t have the money, we don’t pay. If we need help, the Party (CCP) steps in. Suppliers will merge or cut prices – we make it happen.”

But the scariest part is not what China has become, but what it can now do with the capability it has acquired.

Charan, who has advised over 50 Chinese companies and served on Chinese boards, warns that the part that should terrify every CEO and policymaker is this: “China can now shut down entire industries in other countries at will.”

And it is not that Beijing can but won’t do it – the business guru argues it has already demonstrated that capability. 

In October 2025, Beijing announced that Chinese companies would require licenses for the export of technologies used in rare earth mining and processing, as well as for the manufacturing of magnets – all critical for military technologies.

Beijing also said foreign firms supplying rare earths produced in China, or processed using Chinese technology outside China, would need licences.

This was a powerful signal because China refines 85-90% of global rare earths, controls 60-90% of the lithium-ion battery supply chain, accounts for over 80% of global solar panel production and roughly 80% of generic pharmaceutical ingredients.

Nearly 80 per cent of US weapon systems rely on materials like antimony, gallium and tungsten – all dominated by China.

“This is not overreliance. It’s entrapment,” Charan warns. “China has used its chokehold on rare earths to win relief on US tariffs, deferred thrice as of August 2025. It is a glimpse of how quickly these levers can be pulled and the damage they can inflict.”

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The Indian-American consultant also lists how some European and American companies have shut operations, without the world even noticing it. 

Take the chemical industry.

Olin, a global manufacturer of chemical products, shut a major chlorine and chemical plant in the US, citing high costs and overseas competition. 

BASF, the world’s largest chemical producer, shuttered ammonia units and sold off high-value pigment divisions.

In Europe, chemicals giants LyondellBasell and Tronox closed their Rotterdam plants, blaming “Chinese overcapacity”.

As for how Beijing got here, Charan writes that China took everything the West offered – technology, capital and market access – and used it to build a system designed to replace the American-led world order. “Not reform it. Replace it.”

The author, who also lays out how Washington still has leverage and can turn the tide against Beijing, believes Donald Trump is on the right track and must persist to knock down the ’90 Per cent Model’. He, however, argues that Trump’s tariffs alone will not work. “Unless you address the root cause – currency manipulation – China will always have an advantage.”

According to Charan, China’s deliberate 52 per cent currency devaluation – from 4.8 renminbi per dollar in 1990 to 7.3 in 2024 – is what keeps Chinese exports artificially cheap.

“Tariffs can slow China down,” he writes. “But they cannot stop the march unless they are combined with currency realignment, allied coordination, industrial rebuilding at hyperscale, blocking China’s path to markets, and deploying financial weapons to destroy the Beijing economic model.”