China is feeing up a larger chunk of the worlds shrinking trade pie.

Brushing off rising wages, a shrinking workforce and intensifying competition from lower cost nations from Vietnam to Mexico, Chinas global export share climbed to 14.6 percentage last year from 12.9 percent a year earlier. Thats the highest proportion of world exports ever in International Monetary Fund data going back to 1980.

Yet even as its export share climbings globally, manufacturings slice of Chinas economy is waning as service and consumption emerge as the new growth drivers. For the global economy, a slide in Chinas exportations this year isnt demonstrating any reprieve as an even sharper slump in its importations erodes a pillar of demand.

Those trends are likely to be replicated in August data due Thursday. Exports are estimated to fall 4 percent from a year earlier and importations are ensure dropping 5.4 percentage, leaving a trade surplus of $58.85 billion, according to a survey of economists by Bloomberg News as of late Tuesday.

While Chinas advantage in low-end manufacturing has been confiscated upon by Donald Trumps populist campaign for the U.S. presidency, the shift into higher value-added products from robots to computers is also pitting China against developed-market competitors from South Korea to Germany. A weaker yuan hazards exacerbating global trade tensions, which became a hot button issue at the G-2 0 meeting in Hangzhou over inexpensive steel shipments.

“All the talk we have heard over the last few years about China losing its global competitive advantage is nonsense, ” told Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. “This will all further ga increasing trade tensions as already evident in the U.K. with the Brexit vote and in the U.S. with the support for Trumps populist protectionist platform.”

China is also facing opposition to its global shopping spree and calls from bodies such as the European Union Chamber of Commerce in China for improved marketplace access.

For a look at rising global opposition to Chinese M& A, click here

A key driver of Chinas export share gains is its move toward more sophisticated assembly, especially in electronics, which eliminates the need to source components from a vast supply chain across Asia, told Frederic Neumann, co-head of Asian economic research at HSBC Holding Plc in Hong Kong. Thats hurting companies and economies from Singapore to Thailand, Malaysia, Taiwan and South Korea, told Neumann.

The government is subsidizing higher technology industries including new advanced information technology, robotics, and new energy vehicles under its “Made in China 2025 ” plan. More is to come as President Xi Jinpings blueprint foresees global competitiveness within a decade in ten industries from machine tools and robots to advanced railway equipment and medical devices.

China increasingly is turning into an economic rival as it moves to create higher-value exportations, told German Chancellor Angela Merkel on a trip to the nation in June. Those stern words from the leader of Chinas fifth biggest trade partner pale in comparison with the rhetoric from Trump, who has accused China of raping the U.S . in “the greatest theft in the history of the world.”

“Political support for open trade and investment is evaporating globally and no one has more to lose than China, ” told David Loevinger, a former China specialist at the U.S. Treasury who is now an analyst at fund manager TCW Group Inc. in Los Angeles. “China has become the bogey man for adversaries of globalization.”

Trade Backlash

At the G-2 0 meeting in Hangzhou “China took a drubbing behind the scenes over its steel exportations, which have inundated global markets and become a emblem of trade imbalances that have fed resentment across nations, ” told Pauline Loong, managing director at research firm Asia-analytica in Hong Kong. “Protectionism is Chinas biggest worry.”

The latest IMF data for the first quarter of this year proves Chinas market share edged down in January and February — notoriously volatile months because of a week-long Lunar New Year holiday — and ricochetted back again in March, indicating the nations manufacturers are set to at the least hold on to previous gains. Last year, the U.S. also increased the market share while Russia was the biggest decliner among the top 15 exporters as oil prices fell.

Brand Restraint

But its not all upside for China. While its successfully transitioning into medium-end technologies, it has yet to stimulate the leap into high-value-added exportations, says Andrew Polk, Beijing-based head of China research at Medley Global Advisors, which advises hedge funds and other institutional investors.

“Maybe they can, but it remains an open question, ” he told. “The highest value-add is in intangible items like branding. Right now, there is not really a globally branded Chinese company that stands for high quality.”

Yet even without its own Coca-Cola, Nike or Apple equivalent on the world stage, Chinas export juggernaut is winning by default as other major exportersfall behind.

“After having gone this far I see no reason why Chinas march up the value-chain would abruptly stop, ” told James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology in Sydney. “Chinese companies are competing outside their home base against the best in the world, and winning. This points to a hyper-competitive “manufacturers ” , not one losing its shine.”

With assistance by Xiaoqing Pi, and Kevin Hamlin

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