China makes nearly three in ten of the world’s manufactured goods, sold a record trillion dollars more than it bought in 2025, and refines nine in ten of the rare earths modern industry runs on. For every Western business the question is the same: compete, depend, or de-risk — and at what price?
Easier version: read this lesson at A2/B1 level →
Ten items. Work through the four activities — say your answer out loud before you reveal it.
Three terms from the case: export controls · leverage · concentration. Say the right term, then reveal.
Read each part. After it, there's a quick check (answer from memory first), then one question to discuss.
In 2010 China overtook the United States as the world’s largest manufacturer. By 2023, according to United Nations data, it produced around 29% of all the world’s manufacturing output — almost twelve percentage points more than the United States in second place. Nearly three in every ten manufactured goods on the planet, measured by value, now come from one country.
Scale on that level shows up in trade. In January 2026 China reported that in 2025 it had exported about $3.77 trillion of goods, up 5.5% on the year, while imports stayed roughly flat. The result was a trade surplus of $1.189 trillion — the first time any country had passed one trillion dollars, beating China’s own record of $993 billion the year before. This happened in the same year that the United States raised tariffs on Chinese goods sharply. Sales to America did weaken; sales to South-East Asia, Africa, Latin America and Europe more than made up for it.
One trade analyst, Deborah Elms of the Hinrich Foundation, called the result a “mixed blessing” for Beijing. Exports bring jobs and income, but they also bring scrutiny: several countries have complained that low-priced Chinese products are flooding their markets. And the surplus also reflects weakness at home — a property crisis and cautious consumers mean China buys less from the world than it sells to it.
1. Roughly what share of world manufacturing output does China produce, and when did it overtake the US?
2. Why did China’s exports grow in 2025 even though US tariffs rose?
1. Around 29% in 2023, according to UN data; it overtook the United States in 2010.
2. Because sales to other regions — South-East Asia, Africa, Latin America and Europe — grew enough to make up for weaker sales to the US.
For a long time the Western story about China was simple: it made things cheaply that others had invented. That story is now out of date. Take solar power. The International Energy Agency has reported that China’s share of every main stage of solar-panel manufacturing — polysilicon, ingots, wafers, cells and modules — is above 80%, more than double China’s share of world demand, and that the world’s ten biggest suppliers of solar-manufacturing equipment are Chinese. The IEA also gives China much of the credit for bringing down the cost of solar power worldwide.
Then came artificial intelligence. In January 2025 a small Chinese company, DeepSeek, released a chatbot that its developers said performed on a par with one of OpenAI’s latest models. Its researchers claimed the model behind it had been trained for around six million dollars — a claim others in the industry disputed, but a tiny figure next to the billions spent by American rivals. The app quickly became the most downloaded free app in the US. On 27 January, the chipmaker Nvidia lost 16.9% of its value in a single day — around $589 billion, the largest one-day loss of market value in US stock-market history. The investor Marc Andreessen called DeepSeek “AI’s Sputnik moment”.
The lesson for business was uncomfortable. China was no longer only competing on cost. It was competing on speed, on engineering, and on the ability to take a technology and make it cheap enough to sell to everyone.
1. What does the IEA say about China and solar manufacturing?
2. What happened to Nvidia on 27 January 2025, and why?
1. China’s share of every main manufacturing stage is above 80%, more than double its share of demand; the ten biggest equipment suppliers are Chinese; and China helped bring global solar costs down.
2. It lost 16.9% of its value — about $589 billion, a record — because investors feared that DeepSeek’s low-cost AI model would undermine the case for spending billions on advanced chips.
Some dependencies matter more than others. Rare earths are a group of metals used in powerful magnets for wind turbines, electronics, industrial robots and defence equipment. According to the IEA, China mined around 60% of the world’s magnet rare earths in 2024 — and refined about 91% of them. In April 2025, in the middle of the tariff dispute with the US, Beijing required export licences for seven medium and heavy rare earths and related magnets. In October 2025 it announced much wider controls, reaching even foreign-made products containing as little as 0.1% Chinese-sourced rare earths.
At a meeting in Busan, South Korea, on 30 October 2025, Presidents Trump and Xi agreed a truce: the US cut some tariffs, and China suspended the October controls for a year. The earlier April licensing system stayed in place. In September 2026 the truce was extended by two months, to January 2027, and on 15 October 2026 China’s Commerce Ministry said it was willing to keep approving rare-earth licences for Europe whatever happened to the American deal. The supply is flowing — but on licence, and on terms set in Beijing.
Companies and governments have responded with a hedge rather than an exit. In March 2023 the European Commission President, Ursula von der Leyen, argued that decoupling from China was neither viable nor in Europe’s interest, and that Europe should instead de-risk. Apple offers the corporate version. In May 2025 its chief executive, Tim Cook, told investors: “We do expect the majority of iPhones sold in the U.S. will have India as their country of origin” — while China remained the main source for products sold in the rest of the world. Not leaving China; adding someone else. The question is still open: how much resilience is worth paying for — and who pays?
1. Why do rare earths give China leverage, and what did it do in April and October 2025?
2. What is the difference between von der Leyen’s idea and complete decoupling — and how does Apple illustrate it?
1. China refines about 91% of magnet rare earths, so other countries depend on it. In April 2025 it required export licences for seven rare earths; in October it announced much wider controls (later suspended for a year under the Busan truce).
2. De-risking means reducing dangerous dependence while continuing to trade; decoupling means separating almost completely. Apple moved production for the US market to India (and Vietnam) but kept China as the main source for the rest of the world.
“China accounted for 29% of global manufacturing output in 2023” is accurate and forgettable. “Nearly three in every ten manufactured goods come from one country” is the same fact — and people remember it. Senior speakers rarely read out raw numbers; they turn them into proportions, comparisons and pictures. Three tools do most of the work.
Rewrite each percentage as a proportion. Write the missing words.
1. China refines about 91% of magnet rare earths. → China refines roughly in ten of them.
2. China’s share of each solar stage is above 80%. → It is more than of every stage.
3. China mined about 60% of magnet rare earths. → It mined roughly three in of them.
4. China produced 29% of manufacturing output. → It produced three in ten manufactured goods.
1. nine 2. four-fifths 3. five 4. nearly / almost
In 3, “well over half” is also true — but “just over half” would be misleading. Match the qualifier to the real gap.
Choose or complete the correct form.
1. The majority of our components made by one supplier.
2. A quarter of the budget already spent.
3. The surplus rose from $993bn to $1.189tn. That was the first time a country (pass) one trillion dollars.
4. Its share of production is more than its share of demand. (= over 2×)
1. are 2. is 3. had passed 4. double / twice
1 and 2: the verb agrees with the noun after of — plural components, uncountable budget.
A head of procurement opens a board briefing on supply risk. Complete it with proportion and scale language, then deliver it aloud in under a minute.
“Let me put our exposure in perspective. China produces three in ten of the world’s manufactured goods, and it refines roughly in ten of the rare earths in the magnets we buy. The of our critical components come from a single region. Last year the country’s trade surplus passed a trillion dollars for the time. My recommendation is not to leave — it is to add a second source for the parts where our dependence is than double our tolerance.”
nearly / almost · nine · majority / vast majority · first · more
Now deliver it with the raw percentages instead (29%, 91%…). Which version would a board remember on the way out of the room?
Take these into the Speak tab: a proportion with an honest qualifier sounds confident without overclaiming — and a listener can check it.
A note on the figures: shares and totals are rounded and come from the sources listed at the end of this tab. Several parts of this case — the trade truce and the rare-earth rules above all — are changing month by month.
All of it out loud, against the clock. Big numbers only persuade when people can picture them — this is where the proportion language earns its place.
Present this case to the board of a mid-sized European company that buys components from Asia. Structure it: China as the world’s workshop → the 2025 trillion-dollar surplus and where the exports went → from cheap to capable: solar and DeepSeek → rare earths and the export controls → the Busan truce and its deadline → de-risking, not decoupling → Apple’s “China plus one” → the open question.
Finish with one recommendation. Use at least five key terms (trade surplus, supply chain, refining, export controls, leverage, concentration, de-risking, decoupling, China plus one, economies of scale) and at least three proportions instead of raw percentages.
You are the chief operating officer at an annual shareholder meeting. An investor stands up: “Rare earths showed us that one country can switch off a supply with a licence. Yet most of our critical parts still come from there. Why haven’t you moved them — or are you simply putting this year’s margin ahead of next year’s survival?”
Answer properly: accept the risk, put it in proportion with real numbers, explain what de-risking would cost, and commit to one concrete step. Then do it again in ninety seconds — the compression is the exercise.
Your company has decided to add a second supplier outside China for one important part, at a higher cost. Explain the decision four ways, one minute each. Notice which room needs the numbers, and which room needs the reason.
Prefer not to use your own organisation? Take one of these instead: