Give Up On ‘Winning’ Against China
America’s biggest rival is getting only more powerful.
By Christopher Beam
December 16, 2025
In April, when Washington and Beijing were exchanging tit-for-tat blows in the trade war, US Treasury Secretary Scott Bessent projected confidence. China had a “losing hand,” he told CNBC. “They’re playing with a pair of twos.”
It turned out Bessent and the Trump administration were the ones bluffing. After months of escalation—with the US leveling tariffs on China of 10%, then 20%, then 145%, then back down to 10%—the White House heralded the deal the two countries struck in late October as a “massive victory.” Yet the agreement looked a lot like the previous status quo. The US even made a sizable concession, reversing its decision to expand the list of Chinese companies subject to export controls, a policy tool that had previously been understood as nonnegotiable.
China not only shrugged off Donald Trump’s blows—it also emerged with its strengths on clearer display. “China is no longer just a fast follower, but a system showing a very different—yet perhaps also viable, or even more feasible—model of development,” says Lizzi C. Lee, a fellow at the Asia Society Policy Institute.
For years it was conventional wisdom that while China’s growth miracle was unparalleled, it was also precarious. In 2001, Gordon Chang, an American conservative columnist, published The Coming Collapse of China, in which he predicted the Chinese Communist Party would drive the country into the ground—and itself out of power—by 2011. Undeterred by his prognostication failure, Chang updated his timeline in the waning days of 2011 to bet that the party would fall the following year.
During Trump’s first term and under the Biden administration, China hawks spread the idea that the US had to beat China before China could beat the US. This camp breathed a sigh of relief when China’s economy began showing signs of malaise in 2023: a slow-motion property crisis, a stock market selloff, legions of unemployed college graduates. Earlier predictions that Asia’s export powerhouse would one day surpass the US in gross domestic product terms were laid to rest. All of this resurrected the idea that China was once again a nudge away from collapse.
That notion looks increasingly strained. China is simply doing too well on too many fronts. And as the trade dispute showed, Beijing is now in a position to make Washington blink. Those hoping to see China humbled must resign themselves to the fact that it remains a formidable rival—and is determined to expand its already substantial advantages, including in future-shaping sectors such as electric vehicles, clean energy and robotics.
The trade talks showed just how much leverage China has over the US. This is largely thanks to its near-total domination of the supply chain for rare earth minerals, which are essential for building powerful magnets, coloring smartphone screens and boosting digital signals, among thousands of use cases. Beijing’s restrictions on export of the minerals threaten a host of US industries, including EVs, satellites, aviation and consumer electronics. The US is investing to develop domestic capacity in rare earth mining and processing, but “these changes will take years to fully remedy the current overdependence on China,” says Daniel Rosen, co-founder of the economic research firm Rhodium Group.
The US also relies on China for ingredients in nearly 700 medicines—a dependency so sensitive that China’s negotiators didn’t even bring it up in the recent trade talks. And the decision by China in October to cut off exports of computer chips made by Chinese-owned Nexperia, leading to production slowdowns for carmakers including Japan’s Honda and Nissan, shows just how much disruption it can cause when it wants to.
China dominates the supply chain for rare earths, including neodymium, needed for the production of magnets used in EVs, wind turbines and weaponry. Photographer: Bloomberg
Of course, the US has choke points of its own, primarily in that it’s the leading supplier of the microprocessors used to train artificial intelligence models. Trump has forbidden Nvidia Corp. from selling its highest-end chip, known as Blackwell, to China. But Hongbin Li, co-director of the Stanford Center on China’s Economy and Institutions, argues that Beijing has the upper hand. “Can we live without medicine, without rare earths? No,” he says. “Can the Chinese live without Nvidia chips? Yes, they can.” (Li emphasized that, overall, trade is mutually beneficial.)
China has also shown an ability to get around US export controls. Some Chinese companies rely on smuggling networks to get their hands on microprocessors, while others set up shell companies to purchase chips directly from manufacturers. Giants such as Huawei Technologies Co. are also working on producing their own chips that, while not quite state-of-the-art, will still enable competitive products.
In clean energy, China is running laps around the rest of the world, building twice as much solar power capacity as the US and Europe combined. The country dominates the global EV market, producing 70% of the world’s electric cars. It’s the leader in battery technology too: At this year’s Shanghai auto show, carmaker BYD Co. demonstrated a battery that charges most of the way in five minutes. In 2024, China installed more factory robots than the rest of the world combined. Shenzhen-based DJI sells 70% of commercial drones for consumers and businesses, and the US lags China in military drone technology as well.
At this year’s Shanghai auto show, carmaker BYD Co. demonstrated a battery that charges almost all the way in five minutes. Photographer: NurPhoto/Getty Images
China is investing heavily to pull ahead of the US in other areas. A recent report by the US-China Economic and Security Review Commission found that “China leads the world in quantum communications and is making rapid progress in quantum computing and sensing.” While China is behind on cutting-edge AI, it’s receiving more AI-related patents than any other country and is pushing the limits of what’s possible without the most advanced chips, as evidenced by the “DeepSeek moment” last January, when the company rolled out a competitive AI model at a fraction of the cost of its US rivals’. “We’re one Chinese disruption away from the whole AI balloon popping,” says Evan Medeiros, a former policy adviser under Presidents Barack Obama and Joe Biden who now teaches at Georgetown University.
Lee of the Asia Society Policy Institute says China’s strength lies in its ability to “scale technologies quickly and deploy them throughout its economy,” as it did with EVs, solar and batteries. “I think similar dynamics will continue to manifest in its AI ecosystem, next-generation infrastructure, robotics and quantum sectors,” she says.
The US still has the world’s strongest military, but China is catching up. One Chinese shipbuilder produced more vessels last year than the US has made since World War II. China recently launched an aircraft carrier with capabilities close to those of the US Navy’s carriers. The country has doubled its stockpile of nuclear warheads since 2020 and has beefed up its submarine fleet. Both Trump and Chinese President Xi Jinping have danced around the question of Taiwan’s status, but if Xi were to invade the island, it’s far from clear that Trump would defend it.
To be sure, China faces serious economic challenges, especially in the long run. It’s still navigating the wreckage of its housing market collapse, which has wiped out trillions of dollars in wealth, and its economy is battling deflation. Its population is aging rapidly, such that China will lose about a quarter of its working-age adults in the next 25 years, and many young people are despairing amid high unemployment. The country could still get stuck in the “middle-income trap”—that is, it could fail to transition from an investment-led economy to an innovation-driven one, says Medeiros. Indeed, avoiding that trap is precisely the goal of the Chinese Communist Party’s new five-year plan, which prioritizes leading in “future industries” such as aerospace and quantum computing.
Despite China’s growing strength—to say nothing of its willingness to trample on individual rights and freedoms—US perceptions of the country appear to be softening, with fewer seeing it as an “enemy” than even a couple of years ago. Between TikTok and Labubus, perhaps Americans are recognizing the role China plays in their lives. Maybe all those travel influencers agog at Chinese robots and hot pot and high-speed trains are winning hearts and minds. It’s also possible that, compared with the chaos of US politics, China’s relative stability—from a distance, at least—doesn’t look so bad. Whatever the reason, it seems Americans are reconsidering China’s place in the world. It’s about time, if only because rooting for its demise isn’t going to work.