DONGGUAN, China—This city near Hong Kong, once the engine behind China’s rise as a factory floor, now anchors a new industrial transformation. China is evolving from a producer of low‑value consumer goods to a supplier of the high‑value intermediate and capital goods that keep global manufacturing humming.

No longer just a maker of cheap toys, shoes, and electronics, China is now exporting more chips, precision machinery and robotic arms—components that form the backbone of factories worldwide. “In the past, advanced manufacturing was led by Germany and Japan,” said Frank Jiang, vice president of international business at Topstar, one of China’s largest industrial‑robotics and machinery manufacturers. “But we believe our technology has caught up. For many products, we have surpassed them.”

China’s growing dominance across deeper supply‑chain layers makes its export machine even more formidable—and resilient against tariffs that target finished goods. In the first five months of 2026, China’s exports of intermediate and capital goods jumped 25 % and 12 %, respectively, from the same period a year prior, while consumer goods exports increased 4 %, according to a McKinsey Global Institute analysis of China’s official customs data.