On the surface, China’s dominance seems a given. The country’s GDP is likely to surpass that of the U.S. (though not until at least 2028). It’s already the world’s largest market for hundreds of products – from cars to power stations to diapers. Its $3 trillion in foreign exchange reserves is easily the world’s largest. And China also overshadows the U.S. in trade volume, making steady progress toward becoming the investor, infrastructure builder, equipment supplier and banker of choice in the developing world.

But leading economist, globalization guru and competitive strategy expert Pankaj Ghemawat contends that conventional macroeconomic indicators don’t tell the whole story. “Underneath those numbers lies the real world of corporations and industries that actually create growth and wealth,” he wrote in an essay published by Foreign Affairs. “And a close look at the performance and prospects of Chinese firms reveals the obstacles the country still faces.”

Multinational corporations and their supply chains control the majority (80%) of global exports and foreign direct investment. In other words, highly successful economies run on business power not economic power, says Ghemawat, professor of global strategy at the IESE Business School in Barcelona and author of “World 3.0: Global Prosperity and How to Achieve It” (Harvard Business Review Press).

As Ghemawat further explained in a video discussion with Foreign Affairs Editor Gideon Rose, typical business practices in China don’t favor innovation or competitiveness; capital goods and high-tech products are just two examples. They simply allow China to follow – rather than lead – more innovative Western nations. And in recent years, many Chinese firms have struggled to adapt to globalization.

Ghemawat – also a global professor of management and strategy at NYU Stern School of Business, and head of its Center for the Globalization of Education and Management, the first of its kind in the world –has long challenged popular thinking on globalization. It is not a given, but requires increased integration (of markets and cultures) to create a more prosperous world. A masterful educator, Ghemawat is teaching leaders to be fluent in this new language of globalization, and understand and capitalize on its economics and strategies.