The world emerged from the Second World War with two new poles of power, the United States and the Soviet Union, after the era of British-French dominance had ended and Germany had retreated following defeat, division and humiliation.
At the time, China was concluding a civil war that ended with the communists defeating the nationalists and Mao Zedong establishing the People’s Republic of China in October 1949. Mao remained in power for more than a quarter of a century.
For the next four decades, the world remained locked into a bipolar system, while China stayed largely outside the central contest, preoccupied first with domestic and regional issues and later with the modernisation and opening-up programme launched by Deng Xiaoping in the late 1970s.
In 1991, the Soviet Union collapsed. Bipolarity collapsed with it, ushering in a period of unprecedented US predominance. Washington possessed the world’s largest economy, its most powerful military, a currency that dominated global trade and finance, and an alliance network stretching from Europe to Asia.
On the other side of the world, however, a different kind of power was slowly taking shape. Its principal weapon was economics.
Following the opening-up process that began in 1978, China recorded average annual economic growth exceeding 9% for decades, while around 800 million people were lifted out of extreme poverty.
At the start of the new century, China’s accession to the World Trade Organization accelerated a dramatic rise. Chinese goods flooded global markets, and Beijing increasingly came to be seen as the emerging pole capable of challenging American power, and perhaps eventually displacing it.
The scale of China’s rise can be seen in gross domestic product figures. Last year, US GDP stood at $29 trillion compared with China’s $19 trillion. At the beginning of the century, the figures were around $10.2 trillion for the United States and just $1.2 trillion for China.
Put simply, China’s economy was equivalent to about 12% of the US economy a quarter of a century ago. Today, that figure has risen to around 65%.
The obvious question is where that ratio could stand another quarter of a century from now, or perhaps sooner.
The pattern is similar in other sectors. The United States still holds the lead, but the scale and pace of China’s advance suggest that the balance could change substantially if current trends continue.
So how did China advance, and where is that progress most visible?
Industry and Technology
Industry has been one of China’s most important instruments of advancement.
Within a single generation, the country transformed itself from a base for producing cheap goods into an integrated industrial system capable of manufacturing machinery, electronics, vehicles, batteries, renewable-energy equipment and intermediate materials needed by factories around the world.
The value of Chinese merchandise exports approached $3.8 trillion in 2025, while China has accounted for close to 15% of the value of global exports in recent years.
Although its exports to the United States declined last year because of American tariffs, Beijing compensated by expanding sales to Europe, Asia and emerging markets, demonstrating that tariffs may alter trade routes but cannot easily isolate China’s enormous export machine.
China’s advantage is even more striking in industries expected to shape the future.
Last year, the country produced nearly three-quarters of the world’s electric vehicles, around 16 million out of a global total of 22 million. It also controls more than 80% of global lithium-battery production.
In solar supply chains, China remains the dominant supplier. The International Energy Agency estimated that in 2024 Beijing controlled around 85% of the solar-energy production chain, with its share rising to 95% in the manufacture of wafers used in solar panels.
For roughly a century, the United States built much of its prosperity, power and global standing on industrial superiority and an exceptional ability to invent, develop and commercialise technology.
That foundation is now facing an increasingly serious challenge as other countries, particularly China, intensify competition in innovation and technological development.
The shift has prompted warnings in the West of a “second China shock”, one driven not by cheap exports this time, but by technological superiority.
China is openly pursuing global leadership in advanced industries including artificial intelligence, computing, space, renewable energy and biotechnology.
In a recent analysis published by Foreign Affairs, Jake Sullivan, the Kissinger Professor of the Practice of Statecraft and World Order at Harvard Kennedy School, argued that China had built its advantage through a vast, decentralised, state-backed system for financing innovation.
Capital has been directed towards priority advanced-technology sectors, while Chinese companies have been encouraged to compete aggressively.
The result has been the creation of a controlled market in which Chinese firms can build production capacity far beyond that of American companies and their allies, flooding markets with products before competing firms have time to expand their own output.
Beijing has also used this model to dominate critical supply chains and then exploit that position as geopolitical leverage.
That occurred last year when China imposed restrictions on exports of rare-earth minerals to the United States, helping pressure Donald Trump into reducing steep tariffs on Chinese goods. Beijing employed similar pressure against Japan in 2010.
While China strengthened its industrial capacity, Washington allowed much of its own production base to migrate overseas.
According to Foreign Affairs, the United States later paid a substantial price for separating innovation from manufacturing. As factories moved abroad, America lost a considerable share of its skilled workforce and the practical expertise required to build quickly and at scale.
Sullivan, who served as US national security adviser from 2021 to 2025, warned that unless the United States changes course, it could lose its technological superiority and, over time, its broader global leadership to China.
The Rare-Earth Weapon
If there is one sector that demonstrates Beijing’s ability to “choke” major competitors, particularly the United States, it is rare-earth minerals.
China produces around 60% of the rare-earth elements used in magnet production, but its dominance becomes far greater at the refining and processing stages, where its share reaches roughly 90%.
This is the critical point.
Owning a mine is not enough. A country must also possess the capacity to separate, refine and transform minerals into industrial components. That is where China’s position becomes extremely difficult to bypass.
During last year’s trade confrontation with Washington, Beijing restricted exports of seven heavy rare-earth elements, causing major disruption across supply chains.
Western industrial companies warned that they could be forced to reduce production or even suspend it temporarily.
The International Energy Agency estimated that full implementation of China’s broader restrictions could place around $6.5 trillion worth of annual industrial production outside China at risk.
Although China has suspended the expanded restrictions until next November, the concern has not disappeared.
The paradox is clear.
Washington can use the financial system, the dollar and sanctions to close financing channels to its adversaries. Beijing, however, can in some sectors control the physical materials those same adversaries need to manufacture aircraft, cars, semiconductors and weapons in the first place.
Alliances Without Formal Alliances
The United States still holds a clear advantage in military alliances.
It has NATO, close alliances with Japan, South Korea and Australia, relationships with numerous other countries, and hundreds of military bases and facilities around the world.
China possesses nothing comparable.
Nor does Beijing appear to be seeking to reproduce the American system. Instead, it has chosen a different model, constructing flexible political and economic circles that allow countries to cooperate with China without necessarily becoming “allies” in the Western sense.
Through BRICS, the Shanghai Cooperation Organisation and the Belt and Road Initiative, Beijing is creating a wide network of relationships with states that do not necessarily want to become Chinese allies but equally do not want to remain entirely dependent on the United States.
BRICS has expanded in recent years to include additional countries, while the Shanghai Cooperation Organisation includes China, Russia, India, Iran, Pakistan and others.
These groupings are not a “Chinese NATO”, and they contain substantial internal disagreements.
But they provide Beijing with something highly valuable: international platforms that Washington does not control.
Quiet Expansion in Latin America
The United States has long regarded Latin America as its “backyard”, making China’s growing presence in the region particularly troubling for Washington.
The US National Security Strategy issued in 2017 during Trump’s first presidency warned that China was seeking to “pull the region into its orbit through state-led investments and loans”.
China attracted attention through major infrastructure projects in Latin America, including Peru’s Chancay Port, controlled and operated by a major Chinese shipping company, and Ecuador’s Coca Codo Sinclair dam, which was also built by China.
Washington, meanwhile, resorted to diplomatic sanctions against officials in some Latin American countries, including visa cancellations and sanctions, while also threatening the use of military force against governments in the region.
But Foreign Affairs says China has since changed the strategy behind its expansion in Latin America.
Rather than relying primarily on multibillion-dollar megaprojects to strengthen its influence in the Western Hemisphere, Beijing is increasingly consolidating its presence through smaller, less conspicuous projects.
According to an analysis by Natalia Cote-Muñoz, a former official in the US State Department’s policy planning division, Chinese companies are developing lithium-mining projects across several Argentine provinces.
Chinese companies also operate all electricity-distribution networks in the Peruvian capital and supply police equipment and surveillance-camera systems to numerous municipalities across Latin America.
According to Germany’s news agency, China poured billions of dollars into Latin American infrastructure during the 2010s, financing ports, massive dams and even a proposed transcontinental railway linking Peru’s Pacific coast with Brazil’s Atlantic coast, although the railway project was never implemented.
These investments formed part of China’s Belt and Road Initiative, under which Beijing spent enormous sums on major projects across the Global South.
China hoped to use those investments to secure supplies of essential commodities, open markets for Chinese companies and eventually convert economic weight into diplomatic alignment, including persuading countries that still recognised Taiwan to shift recognition to Beijing.
At the beginning of this decade, however, China changed course, particularly in the Western Hemisphere.
Beijing concluded that enormous projects in the region were expensive and generated adverse geopolitical reactions. It therefore shifted towards what it calls “small but beautiful” projects.
These investments require a less conspicuous Chinese presence while remaining popular locally, allowing individual projects to accumulate over time into stronger ties between China and the populations of those countries.
China’s Expanding Role in Africa
A similar pattern is visible in Africa.
China’s trade with the continent reached a record $348 billion in 2025, up from around $296 billion the previous year.
Since May 2026, Beijing has expanded zero-tariff treatment to all 53 African countries with which it maintains diplomatic relations, reinforcing its image as an alternative market for African economies.
China remains Africa’s largest economic partner, while reports indicate that more than 10,000 Chinese companies currently operate across different sectors on the continent.
According to a paper published by the Al Jazeera Centre for Studies, China is Africa’s largest bilateral creditor.
Between 2000 and 2023, Chinese lenders provided more than $182 billion in loans to 49 African governments and seven regional borrowers.
The study concluded that China’s growing political influence in Africa has developed alongside its expanding economic engagement.
What began with conventional diplomatic relations and financial investments has evolved into a more proactive approach involving institution-building initiatives, relationships with ruling political parties and a growing role in mediation efforts aimed at resolving African conflicts.
China’s Belt and Road Initiative serves as a strategic platform for strengthening political influence through infrastructure projects and financial support, while China’s growing military presence and arms agreements also contribute to that objective.
The Soft-Power Shift
“China continues to build its reservoir of soft power, while the United States is undermining its own.”
That was how a Carnegie report this year, written by Middle East Programme director Amr Hamzawy and his colleague Katherine Self, summarised the shifting balance.
An even stronger warning came from another American institution, the Pew Research Center, which found that for the first time China is viewed more positively than the United States, according to a survey involving more than 42,000 people across 36 countries.
The Council on Foreign Relations argued that the results indicated a decline in American soft power more than a straightforward rise in China’s, according to an analysis by council expert Yanzhong Huang.
For two decades, Huang noted, one finding in Pew surveys had been as predictable as sunrise: the world viewed the United States more favourably than China.
The latest survey, however, suggests that era has ended.
The shift did not begin overnight.
Gallup’s 2025 global ratings showed average approval of China reaching 36%, surpassing the United States at 31% across more than 130 countries. It was the largest advantage for China recorded by Gallup in around two decades.
The Pew survey contained another notable finding.
Across 20 countries that Pew has tracked annually since 2023, average confidence in Chinese President Xi Jinping was 10 percentage points higher than confidence in US President Donald Trump.
Huang argued that what he described as Trump’s “authoritarian tendencies” had inflicted severe damage on Washington’s image, although he maintained that this reputation could recover under what he considered better future US administrations.
Experts identified several major factors behind the decline of American soft power:
- Tariffs imposed by the Trump administration
- Reductions in US assistance to countries and organisations
- The volatility of US policy and its contempt for allies
Chinese soft power, by contrast, has achieved tangible political, economic and cultural gains.
China’s development model has acquired increasing prestige and has become something to emulate rather than ridicule, helped by the country’s dominance of electric vehicles and batteries, as well as its influence in gaming and online shopping.
Pew found that favourable views of China were significantly stronger in emerging economies across Africa, Latin America, South Asia and Southeast Asia than in wealthy countries.
Support reached record highs this year in Colombia, Indonesia, Malaysia, Mexico, Nigeria and Türkiye.
At the same time, the United States has suffered a sharp decline in popularity among high-income democracies where it was once widely admired.
The survey recorded a fall in favourable views of the United States in Sweden from 83% to 31%, and in Canada from 83% to 35%, within just three years.
As China gains influence and support across the Global South while the United States loses support among its own allies, the two trends are reinforcing one another: one power is advancing as the other retreats.
The resulting shift is becoming increasingly difficult to reverse.
China Does Not Need to Replace America to Change the System
Talking about China “choking” the United States does not mean Beijing has already become the world’s new hegemonic power.
The American economy remains the largest. The dollar continues to dominate global foreign-exchange reserves, while the Chinese yuan remains far behind.
Washington also maintains a global network of military alliances, bases and deployments for which China has no equivalent.
But China has already achieved something that may be more important at this stage: it has made containing China increasingly expensive and narrowed the space in which the United States can act without incurring costs.
From rare-earth minerals to batteries, from electric vehicles to trade with the Global South, and from BRICS and the Shanghai Cooperation Organisation to soft power, Beijing has built a network that makes separating China from the global economy painful not only for China itself, but also for those attempting to impose that separation.
China therefore may not need to remove the United States from the summit of the international system in order to change that system.
It may be enough to make American power less capable of imposing its will unilaterally.
Washington once acted and decided largely on its own terms.
Increasingly, before doing so, it must now consider what China’s response might be.
