In his latest book, acclaimed Indian-American business consultant Ram Charan unveils what he calls China's '90% Model,' a chilling economic strategy designed to dismantle global competitors. Charan, a Harvard Business School Baker Scholar, asserts that this model has already led to the hollowing out of numerous American industries and poses a significant threat to many more.
Understanding China's '90% Model'
Charan explains that at the core of China's strategy is building massive industrial capacity, often exceeding 90% of global demand in a chosen sector. This is combined with an undervalued currency, making Chinese exports incredibly price-competitive. Beijing then floods international markets with these subsidized goods, systematically forcing foreign competitors out of business.
According to Charan, this strategy has already been successfully deployed in:
- Apparel
- Furniture
- Toys
- Consumer electronics
- Basic chemicals
- Rare earth processing
- Pharmaceutical ingredients
- Telecom infrastructure
- Lithium battery manufacturing
- Solar panels
New Targets and Strategic Control
The consultant warns that Beijing is now setting its sights on even more critical sectors, including automobiles, defense, semiconductors, critical minerals, pharmaceuticals, and advanced telecom. Charan's most alarming revelation is China's acquired capability to "shut down entire industries in other countries at will."
This capability was demonstrated in October 2025 when Beijing mandated licenses for the export of technologies crucial for rare earth mining, processing, and magnet manufacturing. Given China's dominance in refining 85-90% of global rare earths and controlling significant portions of the lithium-ion battery and solar panel supply chains, such controls can have devastating global impacts. Nearly 80% of US weapon systems rely on materials like antimony, gallium, and tungsten, all heavily controlled by China.
Real-World Consequences for Western Business
The book cites specific examples of Western companies struggling or closing due to this aggressive competition. In the chemical industry, global manufacturer Olin shut a major plant in the US, citing high costs and overseas competition. BASF, the world's largest chemical producer, closed ammonia units and sold off high-value pigment divisions. European giants LyondellBasell and Tronox also shuttered their Rotterdam plants, explicitly blaming "Chinese overcapacity."
Challenging the "American-Led World Order"
Charan argues that China has leveraged Western technology, capital, and market access not to reform but to replace the American-led world order. He emphasizes that Beijing's deliberate currency devaluation—from 4.8 renminbi per dollar in 1990 to 7.3 in 2024—artificially cheapens its exports, giving it an unfair advantage.
While acknowledging the efforts of policymakers like Donald Trump, Charan suggests tariffs alone are insufficient. He advocates for a multi-pronged approach combining currency realignment, allied coordination, hyperscale industrial rebuilding in Western nations, blocking China's access to key markets, and deploying financial weapons to counter Beijing's economic model effectively.