Malaysian Indian the Panda Professor Bala Ramasamy, sees the rise of China’s 500 million middle class
On April 9, 2025, U.S. President Donald Trump announced a significant shift in U.S. trade policy by introducing “reciprocal tariffs” on imports from approximately 60 countries. These tariffs are calculated based on each country’s trade surplus with the United States. Among the hardest hit were China (34%), Vietnam (46%), and South Korea (26%).
Amid rising tensions, BCC Global Media sat down with Dr. Bala Ramasamy, a leading economist and Vice Dean of the Global Executive MBA at CEIBS (China Europe International Business School). Dr. Ramasamy is widely recognized for his research on Asian economies, foreign direct investment (FDI), corporate social responsibility (CSR), and international business strategy. His academic work has been featured in prestigious journals including Journal of Business Ethics, World Economy, Journal of World Business, Journal of World Investment and Trade, and Journal of Business Research.
BCC Global Media: Dr. Ramasamy, let’s start with a macro view. The U.S.–China trade war has now spanned over six years. Many argue that China has a “longer breath,” while the U.S. presidency is constrained by limited terms. With Trump now back for a second term, is China better prepared for a renewed phase of this trade war?
Dr. Bala Ramasamy: To understand China’s posture today, we need to revisit 2001, when China joined the World Trade Organization. Despite resistance, countries like the U.S. and the U.K. ultimately supported China’s membership based on the belief that opening trade, investment, and educational exchange would gradually reform China’s political and economic structures. Bill Clinton even publicly expressed hope that economic engagement would steer China toward democratization.
However, two decades later, the Chinese Communist Party remains firmly in control, and has arguably grown stronger. The initial assumptions—that economic liberalization would bring political reform—have not materialized. China has indeed become wealthier and more technologically advanced, but it has not conformed to Western political expectations.
By 2015–2016, Western leaders began to question this bet. Trump capitalized on that doubt during his first presidency, launching a more confrontational trade strategy. Now in his second term, it appears the U.S. is doubling down, but China is no longer reacting from a place of uncertainty—it is entering this new phase of trade conflict with significantly more resilience.
BCC Global Media: From an economic fundamentals standpoint, China has several strategic advantages—high savings rates, a massive population, and a rising consumer base. How do these factors position China in this prolonged trade confrontation?
Dr. Bala Ramasamy: China possesses all the core ingredients of a sustainable and competitive economy: a large, skilled workforce; world-class infrastructure; stable political leadership; and an innovation-driven tech sector.
Even if only 10% of China’s population is considered skilled labor, that’s 150 million people—half the population of the United States. Its infrastructure is not only modern but also strategically developed for long-term growth. On the technological front, China is no longer a follower. Companies like Huawei and DeepSeek represent the country’s evolution into a leader in cutting-edge innovation.
Political stability also plays a critical role. While the U.S. faces frequent policy reversals due to four-year election cycles, China can commit to long-term national strategies—20-year, even 50-year plans. This continuity enables systematic development in sectors like infrastructure and education, which require consistency over decades. In contrast, Western democracies often halt or reverse major initiatives with each administration change, limiting their strategic agility.
When we talk about economic growth drivers—stability, skilled labor, infrastructure, long-term vision—China ticks all the boxes. That doesn’t mean it’s immune to challenges, but its fundamentals provide strong scaffolding for continued development.
BCC Global Media: You’ve highlighted how the U.S. political system can limit long-term planning. But from a consumer perspective, aren’t tariffs ultimately hurting American middle-class buyers?
Dr. Bala Ramasamy: Exactly. Trade protectionism often ends up being counterproductive. When tariffs drive up the cost of imported goods, it’s the consumer who pays the price. The middle class suffers most, as affordable options become limited.
The idea of “making America great again” in isolation is deeply flawed. Economic growth today is globally interdependent. Countries can no longer grow in silos. Just as a village becomes a town and then a city through external interaction, national economies thrive through cross-border engagement. For America to get stronger, the rest of the world must also prosper. That includes China.
The two economies are deeply interlinked. The better China does, the more opportunities emerge for American businesses and vice versa. You can’t cut off that interdependence without risking collateral damage.
BCC Global Media: Congratulations are in order—CEIBS was ranked #1 Executive MBA program by the Financial Times last year. As someone who has taught at CEIBS for two decades, what has driven the school’s meteoric rise?
Dr. Bala Ramasamy: Much of our success stems from China’s rise. As China grew, so did CEIBS. When we started 30 years ago, we were primarily a knowledge dissemination hub—Western professors came in for short-term teaching stints, delivering Western business frameworks to Chinese managers.
Today, CEIBS is not only a bridge to global knowledge, but a generator of original insights from China. We conduct case studies, research local companies, and explore new business models that have emerged here. We don’t discard Western knowledge, but we integrate it with Chinese experience. This dual lens—what we call “China Depth, Global Breadth”—is what makes CEIBS distinctive. Our students leave equipped not only to understand China but to contextualize it within the global business environment.
BCC Global Media: Your own background is fascinating—an Indian-Malaysian economist who has spent 20+ years in China. Given your unique vantage point, how do you assess the new generation of Chinese entrepreneurs like the founder of DeepSeek?
Dr. Bala Ramasamy: What stands out most is the hunger. Since China’s economic opening in 1978, there’s been a remarkable drive among individuals to improve their lives—especially among the first-generation wealthy. That ambition remains strong today.
Companies like DeepSeek are just the tip of the iceberg. Across pharmaceuticals, medical tech, and transportation, you’ll find highly innovative Chinese firms that few in the West have heard of. These are not exceptions—they’re part of a broader wave of transformation powered by ambition, urgency, and an intense desire to catch up with the developed world.
This hunger is a key differentiator. Whether it can be sustained over the next 30–50 years remains to be seen. But with roughly 500 million Chinese citizens still in the low-income bracket, the engine of aspiration is far from spent.
BCC Global Media: Many economies—Japan, South Korea, even Germany—are deeply tied to China’s market. What’s your take on how these nations should navigate between the U.S. and China?
Dr. Bala Ramasamy: The ultimate purpose of any political or economic system is to improve lives. If we cling to outdated ideologies simply because they’ve guided us for the last century, we risk missing the point. Systems must evolve with society.
Both Western free-market capitalism and China’s state-led model offer valuable lessons. It’s not about choosing one over the other, but about creating hybrid approaches that serve people better. If a new model—combining government intervention and market dynamics—can generate inclusive, sustainable growth, we should embrace it.
The goal should never be to defend a system for tradition’s sake. It should always be to uplift citizens. Systems that concentrate benefits at the top—whether capitalist or planned—fail this basic test. We need flexible, pragmatic approaches tailored to today’s complexity.
BCC Global Media: We look forward to hearing more from you during your keynote address at the Global Alternative Investment Conference in South Korea on May 29. And for those interested in further insights, CEIBS’ Global EMBA remains one of the world’s most dynamic programs.