Ram Charan’s new book, “China’s 90% Model: China Has America by the Throat. Here’s How to Fight Back and WIN” is the rare strategy book that is simultaneously well researched, brilliantly constructed, compellingly argued, and frankly terrifying. It is, in my view, mandatory reading for any sitting CEO, director, or aspiring chief executive who thinks their job is “just” about customers, competitors, and quarterly earnings. If you sign off on capital allocation, supply‑chain design, or M&A, this book should change how you see your job.
Why this book matters to you
Charan has distilled decades of work with boards and governments into a stark conclusion: you are no longer competing only with firms; you are competing with a coordinated national system whose goal is dominance, not coexistence. China’s 90% Model is meticulously documented, grounded in verifiable data, and enriched by executives who spoke only under the condition of anonymity because they fear retaliation.
The result is a book that reads less like abstract geopolitics and more like a confidential board briefing on an ongoing economic war most Western companies barely recognize they are in. If you sit on a board, run an operating unit, or advise CEOs, you cannot afford to ignore the operating system Charan describes.
The core argument in brief
At the heart of the book is a simple, chilling thesis: China’s economic model is not about fair competition. It is about systematically destroying rival industrial capacity and, with it, the U.S.-led global order. Charan labels this playbook the “90% Model”: build capacity to supply around 90% of global demand in a chosen sector, then weaponize that dominance.
In a brutally over‑compressed form, his core points are that China’s imperative is to:
- Build massive overcapacity in targeted industries until Chinese producers can meet roughly 90% of global demand, from rare earths to solar to critical components.
- Depress prices using a deliberately undervalued currency. Charan highlights a roughly 20% deliberate undervaluation plus aggressive subsidies to sell at or below marginal cost and flood global markets.
- Drive foreign competitors out, hollowing out domestic manufacturing bases; he argues China has already destroyed ten American industries, including furniture, toys, consumer electronics, basic chemicals, solar panels, rare earth processing, textiles, pharmaceutical ingredients, lithium batteries, and telecom infrastructure.
- Convert dependence into leverage: once 90% dependency exists, supply disruption is no longer “just” a risk. It becomes a controllable tool of geopolitical power.
- Extend this logic into future‑defining arenas including AI infrastructure, EVs, advanced materials, biopharma, aerospace, where supply chains and technology become national‑security instruments, not just business assets.
For you, that makes every “cheap, reliable” Chinese supply relationship a strategic decision, not a procurement tactic. Summed up for America and its closest allies, Charan is calling for a coordinated six‑block response (the United States, the European Union, Japan, South Korea, Israel, and the United Kingdom), with CEOs and boards treated as front‑line actors, not spectators.
How to turn Xi’s playbook into your strategy
Charan argues that Xi Jinping runs China like a corporation with a devastating business model: decide which industries matter, build enough capacity to serve 90% of global demand, then use price and policy to wipe out competitors and convert dependence into power. You can turn that state‑level playbook into a board‑level framework by abstracting the sequence Xi followed and applying it to your own market.
1. Set a dominant, system‑level goal
Define, explicitly, where you are playing for dominance versus participation by segment, technology, or geography. Align the entire system (capital, talent, partnerships, M&A) behind a small number of “must‑win” arenas instead of a long list of incremental bets.
This is a board‑level conversation: which two or three arenas will you actually design to dominate, and which will you explicitly treat as “good enough”? The question isn’t “What’s our growth rate?”; it’s “Where, specifically, are we designing the firm to be unavoidable?”
2. Design the economic engine for scale, not margins
Decide where you are willing to trade margin for scale and strategic position, and make that an explicit design choice rather than an accidental outcome of discounting. Build a funding model (balance sheet, partners, pricing architecture) that can sustain periods of “strategic under‑earning” in chosen markets while you build irreplicable scale or capability.
That may mean living with ROIC that looks sub‑par in the short term in exchange for strategic irreplaceability in a decade. The discipline is to be as intentional with your economic model as Xi has been with China’s industrial model – knowing exactly where you will overinvest and why.
3. Construct the ecosystem and capacity before you need it
Map the full ecosystem required to deliver your “90%” ambition: suppliers, data, platforms, talent, standards, regulation. Invest ahead of demand in the choke points—the assets, capabilities, or relationships that competitors will struggle to copy quickly (for example, proprietary data, specialized talent pools, or localized service networks.)
Your risk team should be in the room here; the choke points you control are also the ones regulators and customers will scrutinize first. Instead of optimizing today’s footprint, you’re designing tomorrow’s ecosystem and quietly building it out before the competition understands the game. Anyone not understanding the concept of “choke points” this week should look up the Strait of Hormuz.
4. Create dependence, then lock in
Focus on becoming the default choice in a few critical parts of your customers’ operating model where switching is costly in time, risk, or complexity, not just money. Wrap the core product with services, data, integrations, and relationship capital so that over time, customers structure their own processes around you.
You are not seeking coercive dependence, but genuine embeddedness: making your firm so integral to the customer’s system that you are very hard to displace. Any structural advantage you build has to be matched by trust, transparency, and reliability.
5. Use power responsibly – and keep scanning for the next “ten”
Treat any structural advantage you build – data, platforms, ecosystem control – as a power that must be governed carefully, with guardrails for customers, regulators, and society. Institutionalize a forward scan: your own “next ten” list of emerging arenas where you must either build scale or avoid dangerous dependence on someone else’s 90% model.
Before your next strategy off‑site, ask your team to bring two lists: your own “90% ambitions” and the ten places you are most exposed to someone else’s 90% model. Charan’s uncomfortable gift to CEOs is a mirror: Xi’s playbook is extreme, but the underlying sequence – clarity of ambition, economic design for scale, ecosystem construction, lock‑in, and constant horizon scanning – is a strategic framework you can adapt inside your own values and governance.
