China’s assertiveness and America’s withdrawal are creating short circuits and bringing the world into a nuclear escalation. Both China and the US would lose. They need serious steps to avert the worst.
Just hours before the 2025 winter solstice, the Japanese press reported that Prime Minister Sanae Takaichi is considering building a nuclear bomb. Similar thoughts have circulated in South Korea, and the region is watching closely. The reasons are simple: the combination of growing threats from a more assertive China, North Korea, and Russia, and a perceived wavering of support from the United States, which has so far provided a nuclear umbrella in Asia.
This combination is unprecedented and poses significant challenges for the world and the leading players in the drama, China and the US. If either misses a step, the world could descend into a nuclear holocaust. The rest of the planet can consider an array of possibilities if things start to go south, but at the moment, it can only rearm, organize, and hope for the best.
If the US makes its Asian allies doubt their protection, they’ll all want to be like the UK, France, or Israel – acquiring a nuclear arsenal, although still with strong US ties. Nuclear proliferation would be a headache for America, multiplying volatility in the region. It’d be wonderful for North Korea, because the dialogue would no longer be about economic performance but about the projection of strength. Pyongyang has nothing to show for its economy, but a full deck of nuclear capabilities.
It could be disastrous for China. It’d be sucked into a North Korean logic in which the economy is a direct function of military projection, not overall national growth. This logic leads only to a one-way road – war, hot or cold. In this context, the role of the People’s Liberation Army (PLA) again becomes central, after decades of being relegated to the back burner in favor of economic growth.
Wobbly PLA
The Chinese Communist Party (CPC) faces a delicate political conundrum with the PLA. By keeping the PLA under the Party, authorities ensure that no officer can refuse orders on the grounds of respect for the law, thereby safeguarding political leadership. The risk is “insubordination,” a possibility in democracies in which the law is above leaders.
However, if the PLA is so integral to the Party, it creates other problems. In wartime, a winning (or even a losing) general may have sufficient influence and troops to seize power from the top authority. If the general wins, he can claim victory despite Beijing’s poor leadership. If he loses, he can blame the loss on Beijing. As head of a war-tested army, what will prevent the general from marching on Beijing? Or even just from keeping the loyalty of his soldiers above that to the Party? This is what Mao did with the CPC: he took control of the party with the leverage of a winning army.
The risk associated with this structure is a coup. By distancing the army from political power, the risk shifts from a coup to insubordination.
It may be preferable to risk insubordination rather than a coup, but for China, this opens a delicate chapter in political reforms (also here and here). Actually, the PLA, with its purges and political flaws, may not be sufficient to initiate a war. China may be almost a paper tiger. However, it has more than enough deterrent capacity, especially when coupled with China’s strategic strengths.
Real Strengths
In the current competition with the US, China can boast of hosting nearly 50% of global industrial capacity. It produces more and at a lower cost than any other country. It has a complete production chain, not only for consumer goods but also for capital goods, which are used by other industries to manufacture anything. Plus, it’s largely self-sufficient. Many other countries are basically fighting for leftovers.
The US has a tech advantage, but it is eroding. The US has a lead in sophisticated, high-tech services, but you may not need much of them in a war fought now, as in the past, with steel. The US provides China with necessary financial services and air transportation assistance. However, across these fields, China has a base of self-sufficiency, ensuring that basic survival is guaranteed and that the population can withstand hardship.
Can the US confront China and risk stripping its population of most of its comforts, as Beijing can? It would need a Churchill, someone to wrest the nation from the jaws of defeat. Can President Donald Trump be that Churchill?
As Zongyuan Zoe Liu said, “China has developed a potent arsenal of nontariff barriers and legal instruments that it can draw on when needed. Discarding the strategic restraint that had previously characterized its approach to the United States, China has shown it is ready to weaponize its supply chain dominance… For China, in turn, success will require resisting US pressure and sustaining its current trajectory to the point where its rise becomes too costly for the United States to try to contain. And it will require overcoming international skepticism about Beijing’s larger aims. In view of their mismatched strengths and weaknesses and their increasingly shared deficit of trust from the rest of the world, however, both sides will likely find that any larger victory remains elusive. This contest will hinge not on pivotal moments but on the slow test of strategic endurance.”
This model is inherently unsustainable in the long term in a peaceful environment, as it would put the entire world at China’s service. It clouds and poisons the current market environment. That service can’t be won by default. It may, at some point, require a shock that could either cement China’s undisputed dominance or provoke global resistance.
The US’s lack of long-term preparation, Trump’s neo-isolationist stance, and China’s President Xi Jinping’s hard-nosed, crafty response have created a new situation: either the US reimposes a new global order, China establishes a Sino-centric world, or someone else will step in.
China may be unsure of its true military capability, as we saw, and may want to use minimal real military pressure and maximum political, propaganda, and ruse pressure. Mao first tricked the KMT nationalists and then the Soviets. The world may now be more complex for this approach.
China’s weaknesses
To trick somebody, as Mao did, you need to gain his trust or that of someone around him, such as finding Chinese intellectuals to play against the KMT or the United States to leverage against the USSR. For the trick to work, you must be the underdog; the primary concern is aimed at the Goliath in the room, in those times the KMT and the USSR. But now the People’s Republic of China (PRC) is undoubtedly the Goliath.
Moreover, the PRC has never effectively addressed the need to build mutual trust, either internally or externally. Its rule is about control, not trust. Domestically, Chinese people look at the chaos they perceive in the US, including crime rates, mass shootings, and the volatility of economic cycles, and may feel secure enough to be content. Ultimately, most Chinese would trade freedom for safety.
But being content is not enough to go to war and die. Most importantly, it may not be enough to feel secure in your generals’ loyalty.
Other weakness: No one loves the CPC worldwide, unlike the communist party a century ago. Many are dissatisfied with the United States, but do people prefer to be under China or under the US? Many countries would like to find a middle ground by playing one against the other, and China might be happy to do its part. But these are good-weather friendships; you can’t bank on them.
Mao famously quipped that power comes from the barrel of a gun. But people take up arms for an idea that, in history, has been called soft power, cultural hegemony, or belief. In the 4th century AD, Roman emperor Constantine may have observed that the Sassanid Empire was strengthening through the imposition of a national religion, the cult of Mitra, a war god. Constantine also sought a religion to hold the empire together, but he chose not a god of war, such as Mitra, but a god of peace, Christ. People want peace and freedom. They go to war to achieve peace and freedom. They may die to live for themselves, their families, and their ideas, although in reality, people just live to die. Christianity provided a strong, positive thrust for an optimistic life.
The CPC has no broad appeal among its people and even less among non-Chinese. For the Chinese, the dream of a stable life may be sufficient. But in the current environment, the outlook is gloomy, and China has not produced a dream that could rival the American dream’s magic appeal.
China’s World
Short of that, can China conquer the world? Will the world conquer China? Or is there a middle ground?
It could be like the 3rd-century BC Qin unification. But Qin was part of a dominant cultural community; China is not; it’s outside it. The US has allies, friends, enemies, and rivals. China also has a range of ties, but there’s a fundamental distinction: China, or not-China; China, or countries below China; or one above China, the US.
The Qin state was part of the dominant culture; in fact, it may have been a cultural superpower, as it produced the most authoritative philosophical anthology of the time, the Lüshi Chunqiu (edited by Lü Buwei, 291–235 BC, perhaps the true father of the First Emperor). It adopted a political model inspired by the most influential thinker of the time, Hanfei Zi (c. 280 – 233 BC), and the Qin Prime Minister Li Si (c. 280 – 208 BC), who was Hanfei Zi’s close friend.
None of that is happening with the PRC. It is not part of the dominant culture and is not a cultural superpower.
The Mongols conquered the world but adopted the dominant cultures of the lands they were about to conquer, Confucianism in China and Islam in Central Asia. In theory, China should first westernize and then conquer the world. It has not yet done so; now it seems less likely.
In theory, this is an opportunity for the fall or the readjustment of the US Empire.
After WWII, the US and Great Britain had it. It was about aligning America’s needs with those of the world and pragmatically rebuilding defeated states. The formula, a proper mix of idealism and pragmatism, was apparently lost after the Cold War. Clinton’s America might have believed that the global mission was a “natural” _expression_ of international liberalism. Now, America appears to be shifting in the opposite direction, pursuing purely national interests.
The question is: who can provide a global, feasible political mission? The US is better positioned, but anyone could, including Europe, Russia, or India. It requires cultural clout, credibility, and outreach.
In Gold we Trust
Trust also means credit and finance. The US is pushing the use of stablecoins. In brief, its immense debt and massive trade deficit weaken the US dollar’s grip. But many have reservations about the new currency. If stablecoins were to crash, it’d be a blow to American centrality and a boost for the state-controlled, more stable Chinese RMB.
The RMB, not fully convertible and with an exchange rate controlled by political power rather than by open-market forces, is currently no one’s favorite. However, if stablecoins prove less than stable, the RMB could gain traction, especially since immense industrial capabilities underpin the currency. Then Washington might open a strategic vulnerability to Beijing at a crucial moment.
China may feel optimistic, but is that optimism really warranted? Perhaps, in some ways. China may not have what it takes to be the master of the Universe, but it may have what it takes to survive the apocalypse following the American crash and then rebuild from the rubble. The strategy could be survival amid enormous risks.
The minimalist, cautious strategy guided the country after the 1989 political crisis, the Tiananmen crackdown, and the 1997 Asian financial crisis. The urgency of political and economic reforms in the 1990s was shelved after the US’s poor performance in Iraq and Afghanistan and the 2008 financial crisis.
But the minimalist approach led China here. It missed precious opportunities to avert the current clash.
Missed trains and the future
To achieve such internal and international trust at the beginning of the 2000s, China should have carried out three sets of reforms. They would have allowed it to become today a significant economic and political center of gravity, without or at least with much smaller current conflicts.
- It was necessary to undertake political and social reforms, including the creation of a broad-based tax system to finance a new social system that, in turn, would increase domestic consumption. This had to be accompanied by democratic political reform.
- Open its domestic market and liberalize its exchange rate. This would have fully integrated China into the global political-economic system.
- Organize the systematic dissemination of English-language education to achieve some form of full bilingualism among its population. This would have opened Chinese culture to the world and, more importantly, opened the world to Chinese cultural influence in English.
These three sets of reforms were complex, but at the time, good relations with the United States and neighboring countries would have provided strong support for these steps. Today, these steps are more difficult because the internal system has become more complex and the external environment has become more hostile.
Therefore:
China. Now, merely aiming for survival may not be enough. China could end up squeezed by multiple pressures, from the US, wary neighbors, and cagey nations worldwide. Can Xi make up for what was lost two decades ago? And how? China might need all the help it can and should start thinking about it.
America. The US has a clearer path, as the need is already evident. It needs to reindustrialize, address its deficit, and enhance, not diminish, its international pull. The goals are feasible but present substantial practical challenges. If the US fails, the world as we know it will end. They can’t be addressed without a clear sense of alarm in the US and among allies, and with careful, pragmatic attention to detail.
It’s either that or nuclear proliferation, and then, possibly, the apocalypse.