Inside China's Real Advantage: Manufacturing at Scale

Rui Ma spent two days touring Liyang, a county-level city in Jiangsu that anchors CATL’s largest production base and generates roughly 5% of global power and storage battery output. Observers usually focus on China’s consumer-facing tech: mobile payments, fast delivery. Ma’s argument points elsewhere, to six factories she visited across the energy stack: industrial parks engineered around entire supply chains, local governments competing on execution speed, and profitability treated as a constraint rather than a goal.

That last point runs against how foreign investors read Chinese manufacturing. Thin margins discourage new entrants and buy endurance in a system built for survival under pressure. The same logic extends to the energy transition: continued cost-cutting in solar aims to make tomorrow’s applications, like green hydrogen, viable.

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• Liyang, roughly an hour from Shanghai by high-speed rail, hosts more than 100 power battery companies and generates over 100 billion RMB (about $14 billion) in output.
• Local governments compete on execution quality rather than subsidies. Liyang’s “1220” program promises one working day for business registration, two for real estate transactions, twenty for construction permits.
• Industrial parks relocate entire supply chains, not single firms. CATL’s arrival in Liyang brought its suppliers along, letting companies source most inputs within a few hundred kilometers.
• Manufacturers build custom equipment where off-the-shelf machinery is too slow or costly. Chinese suppliers delivered projects in months where global competitors needed years.
• High profitability signals vulnerability as much as success: excess margin attracts competitors in a system with shared supply chains and fast-diffusing capabilities. CATL and Huawei are cited as rare companies that eventually combined scale with margin.
• China’s push toward zero emissions blends energy security, air quality, and industrial strategy. New AI data centers must run on 80% renewable energy, and business licenses depend on meeting green targets.
• Ma flags her own closing observations about lower-tier cities’ prosperity as impressionistic street-level context, not data, and cautions against reading them as a broader diagnosis.