To
understand China’s approach to the trade and tech war with the US, you
have to understand the psychology of the man leading it. And that means
grappling not just with ideology or grand strategy, but with
humiliation. As it turns out, Xi Jinping is not just fighting a trade
war. He’s fighting a memory.
When a chorus of Chinese mouthpieces cited Mao Zedong’s On Protracted War
to frame the latest chapter in the US-China stand-off, it wasn’t just a
throwback to revolutionary lore. It was a message to domestic audiences
that this wasn’t a temporary trade scuffle, but a test of national
resolve.
Mao
argued in 1938 that China, militarily weaker and fragmented, couldn’t
win through direct confrontation. But it could endure. Victory would
come through patience and perseverance, by dragging the enemy into a war
of attrition — through retreat, stalemate, and finally, counterattack.
Today, it’s not Japanese troops but American tariffs and tech sanctions
that China is confronting. The battlefield has shifted, but the logic is
hauntingly familiar.
State
media outlets’ revival of Mao’s wartime essays — written in the caves
of Yan’an as Japanese forces advanced — also says something deeper about
Xi himself.
Xi
was born into red royalty. His father, Xi Zhongxun, was a top party
leader. But that protection vanished overnight when he was purged
in the early 1960s. The teenage Xi was cast out of elite schools and
branded a political liability. “Back then, our classmates all looked
down on us and avoided us, as if we didn’t exist,” said a fellow student who was ostracised. That
dislocation cut deep. It instilled in him not just a distrust of
political tides, but a hardened belief in self-preservation through
discipline, control and loyalty to the system that had once abandoned
him.
This
is the emotional architecture behind Xi’s governing instincts — and it
directly shapes how he interprets foreign pressure. US policymakers may
see tariffs and chip restrictions as policy tools to advance US
interests. But for Xi, they echo something more raw: the experience of
being diminished, delegitimised, cast aside. Humiliation, once personal,
has become national. The trade wars are a thinly veiled attempt to
shame and contain China, to deny it technological adulthood. The
appropriate response, in Xi’s mind, may not be a negotiated settlement
but a long war of resistance.
In
fact, hardship isn’t merely to be endured; it’s something to be
conquered. Xi was sent to a rural village during the Cultural
Revolution. He initially fled, but later returned and remade himself
there. He lived in a cave. He shovelled sewage. He read Marx and
repeatedly applied to join the party, until it finally accepted him. It
was a crucible. “Knives are sharpened on the stone,” he has said.
That
outlook is now baked into China’s long-term strategy. Xi is not looking
to “win” the trade war in a conventional sense. He’s positioning China
for a drawn-out, grinding contest by building domestic capacity,
hardening supply chains and rooting out perceived vulnerabilities to
foreign pressure. Huawei’s development of its Ascend AI chips — built
secretively in the shadow of US sanctions with state-directed support —
is a case in point.
These
chips, particularly the 910D, are beginning to rival Nvidia’s H100 in
performance. The same logic applies to rare earths — another arena where
China, instead of chasing symmetry, weaponises asymmetry. By tightening
export controls on strategically critical metals like dysprosium and
terbium, China is reminding Washington that, in a long contest,
dependency is leverage — and Beijing has plenty of it.
But
there’s a flip side. Once struggle is elevated into a moral narrative,
flexibility begins to look like capitulation. And that rigidity is
showing up at home. Despite promises to pivot towards domestic
consumption and rebalance the growth model, progress is halting. Local
officials and bureaucrats are risk-averse. The anti-corruption campaign,
while politically effective, has paralysed many mid-level decision
makers. The party is disciplined, but it’s also brittle.
In
trying to inoculate the CCP against vulnerability, Xi may be
undermining the very adaptability the economy now needs. The “protracted
war” mindset is historically resonant and politically useful. But it
also creates strategic blind spots — especially in an interconnected,
fast-moving global economy. Sometimes resilience requires adaptation,
not just endurance.
For
US policymakers, this means that pressure alone won’t bring Xi to the
table. He’s not bargaining — he’s resisting. He believes he has history
on his side. And the more the US tries to force a break, the more it
confirms his suspicion that humiliation, not compromise, is the endgame.