• Conflict
• Mon 12 2025

How China Is Playing the Long Economic War

In the past year, the Chinese government’s approach to the increasing tensions of trade and technology with the United States has clearly turned a corner in the country’s international strategy. Rather than merely acting in a reactive or compromise-oriented way, Beijing has shown a deliberate intention of absorbing the economic costs in the confrontation with the USA in order to push back against the American pressure. By means of export controls, trade measures, and other instruments, China has demonstrated it is able to weaponize its supremacy in the global supply chains while still pursuing the diplomatic off-ramps. This approach is indicative of mere retaliation tactics, in addition to a global strategy of China's ascendance as an international power. Let us discuss this matter step by step briefly.

1. Calibrated but Firm Retaliation

China’s posture against U.S. actions has been brazen yet judicious. Export prohibitions pertaining to rare earths, restrictive conditions pertaining to high-level processing technology, as well as agricultural imports such as U.S. soybeans were set with the intentions of imposing costs without locking the doors for further dialogue. This approach has permitted Beijing to momentarily withhold actions that came after high-level diplomatic channels were employed.

2. Supply Chain Weaponization

Beijing has begun leveraging non-tariff barriers and export controls designed for sectors where the Chinese government possesses structural advantages. Rare earths materials, green energy materials, and high-end manufacturing materials also highlight Beijing's readiness to use supply chains as geopolitical weapons.

3. Domestic Political Imperatives

The Chinese government, especially President Xi Jinping, also has its own set of limitations in terms of domestic public opinion. If an outcome were deemed friendly to the United States, it would invite the same backlash criticism that the government faced after signing the Phase One trade agreement in 2020. Resisting the United States has become part and parcel of President Xi’s campaign in his vision for bringing an end to China’s “century of humiliation.”

4. A Multi-Stage Strategic Vision

For China, the bilateral trade war is simply another episode within an unfolding competition that has been ongoing for several decades. The short-term objective is to gain greater freedom from U.S. controls on technology to speed up development of the semiconductor. The medium-term strategy is to enhance self-reliance in technology and expand export sales to other countries. The long-term plan is to create an alternate global system of trade and finance that weakens the U.S. ability to impose sanctions.

5. Capacity and Capital:

Strengths with Limits capacity, China’s scale of population, industrial capacity, and finances is the foundation for its global influence. China is the globe’s leading exporting nation and a pioneer in manufacturing, clean energy technologies, and infrastructure. Nevertheless, potential challenges to future growth for China include its overcapacity, low domestic consumption, aging demographic structure, and dependence on overseas markets.

 6. Credibility and Soft Power Deficits

Deficits in Credibility and Soft Power China has strong material power but lacks credibility and soft power. Its opaque decision-making process, debt diplomacy policies, overcapacity issues, and dual-use investments have all created doubts abroad. China is respected, but it is not necessarily relied upon or trusted.

 7. A Shifting U.S. Position

A Shift in the U.S. Amid the withdrawal from multilateralism and the polarization faced by Washington, its historic strengths in terms of integrity and leadership in international relations have eroded. This has been taken advantage of by a China that still cannot fill the void left by the United States within the international order.

 In conclusion, China's challenge embodies a historical anomaly in terms of geopolitics. Unlike other revisionist states, China's aim to become a superpower is through economic accumulation rather than by force of arms, expecting to reach parity, if not superiority, without necessarily going to war. However, power and capital are not enough. Inconsistencies in credibility, demographics, and economic structure continue to pose a threat to the ascent of China. A blunt force attack may not work well in the case of the United States. A demonstration of global leadership means regaining the trust of the international community and maintaining good relations with other countries. Rather than resorting to pressure tactics, the challenge posed by the competition between Washington and Beijing is better conceptualized as one of endurance, in which a victory may not be easily demonstrable by either party.