McKinsey’s Nick Leung and Joe Ngai argue in their new book that China is not headed for Japan-style stagnation and will not see major decoupling from the U.S. The consulting firm points to China’s global manufacturing dominance and its spending on frontier technology as key factors for resilience. Foreign businesses are reassessing their presence in China as local competition intensifies, with Starbucks selling a majority stake in its local operations and other U.S. giants downsizing. McKinsey advises that winning longer term requires investing in China to stay relevant in the giant consumer market and consequently competitive in other countries where Chinese companies are expanding. Z.ai has launched a new AI model running only on Chinese chips, illustrating China’s growing technological self-sufficiency.
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