They are already ahead, and the gap widens every quarter
In October 2026, a delegation of French manufacturers travelled to the Shenzhen bay area and Guangzhou. This report sets out what they saw, and what every manufacturer can do to turn the tide, with first wins in a hundred days and a scale-up decision at six months.
Recent European studies look at China through trade, costs and subsidies, and draw policy responses from them. This document looks at it from inside the factories, through the eyes of manufacturers. It focuses on decisions every leader can make themselves. A sector-by-sector reading is in chapter 4.
An AI camera deployed in two days at XPENG. A garment delivered 28 days after its design at Shein. BYD reports one vehicle every 52 seconds.
In automotive, Roland Berger attributes about 60% of the cost gap to design and production architecture. In electronics, Honor designs 75% of its critical machines.
Chinese brands went from 5.6% to 11.2% of the European car market in a year. Shein runs production for Pimkie. H&T is preparing its own household appliance brands. And the 2026-2030 five-year plan already names the next sectors: robotics, semiconductors, biomedicine, aerospace.
Each decision is detailed in chapter 4.
Western manufacturers can still narrow the gap, if they act now.
Read the conclusion and the ten questionsHow we worked, and the limits of the exercise: appendix A.