Trump’s return to the White House and the escalation of the trade war have triggered a new stage in the confrontation between the US and China. Having grown into a powerful industrial nation thanks to foreign capital, China is now challenging the hegemony of American corporations, building its own trade networks, and increasing its military potential.

This rivalry is a clash between two leading centers of the capitalist system for control over global resources, markets, and production – a conflict in which compromise is impossible. Along what lines is the US-China struggle unfolding? Does it threaten a new world war? And are the Chinese and Americans ready to kill each other?

I. Why Does China’s Rise Threaten the USA?

1.1. The US-Centric World Order

Over the past 30-40 years, China has transformed from a backwards, closed, agrarian country into one of the world’s leading economies, a strong and influential center of the global capitalist system. In half a century, China’s nominal GDP has increased fortyfold, and for about a decade the country has ranked second in the world by this measure. The growth of industrial production, capital exports, the subjugation of new markets for goods and capital investment, active militarisation, and the expansion of influence over other countries have brought China into conflict with US interests and have eroded Washington’s former position as the undisputed hegemon of the capitalist system.

By the 1980s, the United States of America already held a leading position in the global imperialist system as the largest economic and military power. Their consolidation as the world hegemon was completed after the collapse of the Soviet Union in 1991, which marked the end of the Cold War and established the USA as the sole superpower. After the USSR’s dissolution, the countries of the former socialist bloc fell entirely under the influence of American capital.

In the 1990s, the USA’s economic leadership was reflected in a number of key indicators:

1. In 1990, the USA’s GDP amounted to $5.96 trillion in purchasing power parity (PPP) terms, which significantly exceeded the figures of other countries. For comparison, Japan, which ranked second, had a GDP of $2.46 trillion, less than half as small. By the beginning of the new millennium, the USA’s share of global GDP consistently stood at around 25–30%.
2. The USA was the largest source and recipient of foreign direct investment (FDI). Throughout the 1990s, between 20-25% of global FDI originated from the USA, while between 15–27% was absorbed by it.
3. The USA accounted for between 20-25% of global industrial output. Such a powerful industrial base served as the economic foundation of the USA’s global leadership.

All of this contributed to the formation and consolidation of a USAcentric world order, the state of the modern capitalist system in which the USA was the unquestioned leader, and American capital was the most powerful force on the planet. This position was reinforced by several instruments: the dollar as the world’s currency, international financial and trade institutions, military power, and NATO.

The Dollar as the World Currency

After the introduction of the Bretton Woods system in 1944, the dollar became the main world currency, the predominant means of international payments and wealth accumulation. In 1971, Richard Nixon ended the dollar’s gold convertibility, and from that moment, the dollar was effectively backed directly by the economic power of the USA and its reputation in global markets.

Since the 1970s, oil transactions by the Organization of the Petroleum Exporting Countries (OPEC) and others have been conducted predominantly in dollars, forcing countries to hold vast reserves in US currency. According to the International Monetary Fund, in 2000, 71% of the world’s foreign exchange reserves were held in US dollars. By 2021, this figure had decreased to 59%, which nevertheless still demonstrates the dollar’s continued dominance.

The dollar’s status gives the USA the ability to influence the global financial system through sanctions and control over the SWIFT interbank payment system. Although SWIFT is formally neutral, most of its transactions are conducted in dollars. This means that in the event of a global conflict or political crisis, the USA has the ability to disconnect a particular country from SWIFT as a form of economic pressure, effectively isolating it from international financial operations.

There are several examples of SWIFT being used as a tool for sanctions:

• In 2012, as part of sanctions against Iran’s nuclear program, the European Union decided to disconnect several Iranian banks from SWIFT. This led to significant economic costs: Iran lost about half of its oil export revenues and a substantial portion of its foreign trade.
• Following the outbreak of the conflict in Ukraine in 2022, the USA, EU, United Kingdom, and Canada decided to disconnect several Russian banks from SWIFT as part of sanctions aimed at Russia’s economic isolation. As of March 12, 2022, seven Russian banks were removed from the system.

However, the largest banks connected to the energy sector, such as Gazprombank, initially avoided disconnection due to Europe’s dependence on Russian energy resources. In 2024, the USA imposed additional sanctions against Gazprombank, restricting its operations within the American financial system, as well as against more than 50 other Russian banks and Russia’s SWIFT alternative, the Financial Message Transfer System (SPFS).

International Institutions

After World War II, the USA created a global economic system in which it played the leading role, using international organisations to achieve this.

The International Monetary Fund (IMF), established in 1944, provides loans to countries in crisis situations, but on terms favourable to the USA. The USA controls 17.43% of all IMF quotas, which gives it 16.50% of the voting power. This share is slightly lower than the quota because part of the votes is distributed equally among all countries. For key decisions such as amending the Articles of Agreement, revising quotas, or granting large loans, at least 85% of the votes are required. Thus, the USA effectively holds veto power: without their consent, reaching this threshold is simply impossible. No other country possesses such a share.

Most often, countries seeking IMF assistance have to pay through privatisation, reductions in government subsidies for domestic production, and general economic liberalisation.

According to studies, from 1990 to 2004, over 80% of IMF assistance programs included conditions for trade and capital liberalisation, 60-80% required privatisation, and 50-70% imposed limits on public sector wages and employment, as well as pension reforms. Ultimately, such policies cleared the way for American corporations to enter the national markets of many countries.

One illustrative example of American capital entering another country through the IMF is Russia in the 1990s. After the collapse of the USSR in 1991, Russia, facing a deep economic crisis, became a major borrower from the IMF. From 1992 to 1999, Russia received IMF loans totaling over $20 billion. These loans were provided on the condition of implementing structural reforms aimed at the interests of Western capital: accelerated privatisation of state enterprises, liberalisation of trade and capital, primarily the removal of barriers for foreign capital and reductions in the public sector and social spending.

The IMF’s requirements led to mass privatisation, resulting in a significant portion of state enterprises falling into private hands, often at undervalued prices. This opened the way for American and European corporations to profitably acquire Russian assets. The free movement of capital encouraged speculative investments by Western funds in Russian government short-term bonds (GKOs), which led to a massive capital outflow in 1997-1998 amid the Asian financial crisis. In August 1998, Russia declared default.

By 1998, the poverty rate had reached 30%, social guarantees had been reduced, and labour exploitation had intensified. Trade liberalisation contributed to the establishment of a resource-based economic model: Russia exported raw materials (oil, gas, metals) at low prices while importing high-tech goods and services from the USA and Europe.

The World Bank, established in 1944, finances the development of countries through interest-free loans and grants, but again with conditions favourable to the USA. The United States owns 15.87% of the bank’s shares, giving it 15.02% of the voting power. As with the IMF, key decisions require 85% of the votes, effectively giving the USA veto power. Additionally, by tradition, the President of the World Bank is an American, appointed by the USA and approved by the Board of Directors.

Like the IMF, since the early 1990s, the World Bank has promoted the “Washington Consensus” in other countries through loans and grants, which involves imposing policies of market reforms, privatisation, and reductions in government regulation. Both institutions effectively pursue two goals: to protect American capital and investments abroad, and to create conditions for their most profitable development in the borrowing country. Furthermore, the borrowing country becomes economically dependent on the USA, which also results in political subordination.

Like the IMF, the World Bank financed Russia in the 1990s. From 1992 to 1999, the country received loans and grants totaling around $12 billion from the World Bank, including projects for structural economic reforms, infrastructure development, and support for the private sector.

World Bank loans in 1992-1994 were tied to the acceleration of privatisation in the oil and gas, metallurgical, and energy sectors. This allowed Western corporations, including American ones (such as ExxonMobil and Chevron), to acquire Russian industrial assets either directly or through oligarchic groups at undervalued prices.

The World Bank’s projects for reforming the coal industry included the closure of unprofitable mines and the privatisation of the remaining ones, which opened the sector to foreign investors, primarily Western.

The World Bank’s conditions included reductions in budgetary spending and economic deregulation. Loans for public administration reform required cuts to social programmes, which led to the deterioration of healthcare and education, as well as rising poverty. With the support of the World Bank, financial sector reforms were carried out in Russia that opened the doors to Western banks such as Citibank and JPMorgan. They quickly occupied market niches by servicing privatised companies and oligarchic structures.

The World Trade Organization (WTO), established in 1995, regulates global trade by developing trade rules, facilitating trade negotiations, and resolving trade disputes. The USA is among the largest contributors to the WTO budget: in 2023, its contribution accounted for 11.3% of the organisation’s total budget, which includes 164 member countries.

The USA has also been a leader in promoting numerous standards and initiatives within the WTO. One of its most significant achievements was the inclusion in the WTO agreement of the standard on intellectual property protection, known as TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights). This agreement, initiated by the USA a year before the WTO officially came into force, was aimed at strengthening the protection of patents, trademarks, copyrights, and other aspects of intellectual property.

The impact of TRIPS was particularly evident in the pharmaceutical industry. American pharmaceutical companies such as Pfizer, Johnson & Johnson, and Merck secured protection for their patents against competition from cheaper Indian generics, which allowed them to monopolise the market for a number of medicines in developing countries.

Through the WTO, the United States also achieved reductions in agricultural tariffs in countries such as India, Brazil, and China. These countries were also required to reduce domestic subsidies for their agricultural producers.

In the 1990s, the USA, through the WTO and the World Bank, facilitated the opening of China’s economy, counting on its dependence as a factor that partly shaped the subsequent dynamics of global relations.

When joining the WTO, Russia committed to reducing its average weighted import tariff from 10% in 2011 to 7.8% by 2015, and for certain goods (such as cars and electronics) to 5-6%. According to a WTO report, Russia also reduced nontariff barriers such as quotas and licences. This made the market more profitable for Western goods, especially high-tech and consumer products produced by American and European companies, such as Apple, General Motors, and Procter & Gamble.

Military Power and NATO

The United States Armed Forces is one of the largest and most technologically advanced militaries in the world. They comprise about 1.32 million active-duty service members, 738,000 reservists and National Guard personnel, and 754,000 civilian employees.

Since the 20th century, the United States has annually spent more on defence than the ten largest competitors combined. In the late 20th and early 21st centuries, its share of global military expenditures remained the highest, reaching roughly one-third of total spending.

In 2025, Donald Trump proposed a record military budget for the next fiscal year of $1.01 trillion. This is 13% higher than the current expenditure of $883.7 billion. According to estimates, with the U.S. GDP at $28–29 trillion, defence spending would account for about 3.4-3.5% of GDP, which is comparable to the 2023 level (3.36% of GDP according to the World Bank).

The United States is the undisputed leader in terms of global military presence. It maintains more than 750 military bases across 80 countries, at least three times more than all other nations combined. The U.S. also leads the race in military technology: in 2020, spending on military research and development reached $104 billion, absorbing a significant share of the entire federal R&D budget. Added to this arsenal of power is the world’s second-largest nuclear arsenal of about 3,708 warheads, either deployed or held in reserve.

The United States not only possesses the world’s most powerful military but also uses NATO as a tool to pursue its military ambitions, drawing on the resources of other countries.

The North Atlantic Treaty Organization (NATO), established in 1949, was originally positioned as an alliance against the Soviet Union. However, after the collapse of the USSR in 1991, it did not lose its significance, continuing to serve as a tool for expanding American military presence.

Since 1999, NATO has grown from 16 to 32 member countries, expanding its borders into Eastern Europe. Poland, the Czech Republic, and Hungary joined the alliance in 1999, followed in 2004 by the Baltic states, Bulgaria, Romania, Slovakia, and Slovenia. This expansion was accompanied by military operations: the bombing of Yugoslavia in 1999 (Operation Allied Force), the invasion of Afghanistan in 2001, and the intervention in Libya in 2011. The most recent members to join NATO were Finland in 2023 and Sweden in 2024.

The United States controls NATO through its dominant military, financial, and political influence. The U.S. contributes 16% of NATO’s direct budget and covers a large portion of the indirect costs associated with maintaining military bases and conducting operations. The Supreme Allied Commander Europe – the head of NATO’s combined forces in Europe – has always been an American general (since 1951). NATO decisions most often reflect U.S. priorities: eastward expansion in the 1990s, operations in Afghanistan after 9/11, the military campaign in Syria in the 2010s, and others.

The organization provides the United States with the ability to influence the decisions and policies of other member countries, as well as those seeking to become NATO members or partners. The USA uses this organization as a lever of military and political pressure. A clear example: Russia and Ukraine.

Ukraine, as a country seeking NATO membership, is an important example of how the United States uses the alliance to pursue its own policies. Ukraine began aspiring to join NATO under the influence of Western capital, which, through economic pressure (IMF and World Bank loans), political manipulation (support for nongovernmental organizations, legitimization of the 2014 coup), and military assistance (training of the Armed Forces of Ukraine, arms supplies), subordinated Ukraine’s ruling class to its interests.

This was used to weaken Russia’s influence in the post-Soviet space. After the pro-Russian ruling circles in Ukraine were removed in 2014, Ukraine became a tool for exerting pressure on Russian capital and its political ambitions. The militarization of the country under the pretext of its potential NATO membership became a key element of the U.S. strategy to contain Russia in the region. The supply of Western weapons, including Javelin anti-tank systems, and training of the Ukrainian Armed Forces according to NATO standards temporarily restrained Russia’s ruling class. Joint exercises, such as Sea Breeze and Rapid Trident, conducted near Russian borders, reinforced this policy. Ukraine officially enshrined its course toward NATO membership in its Constitution in 2019, symbolically cementing its role as an instrument of U.S. pressure on Russia.

With the outbreak of the special military operation in 2022, the United States used Ukraine as a proxy to weaken Russia militarily and economically. Large-scale arms supplies (HIMARS, Patriot, Leopard tanks) and financial assistance worth hundreds of billions of dollars made Ukraine dependent on NATO, while simultaneously depleting Russian resources in the protracted conflict. The conflict in Ukraine allowed the USA to consolidate its influence in the region and strengthen Eastern European countries’ dependence on American military and economic support.

Thus, economic supremacy, reinforced by dollar dominance and the influence of international institutions, combined with the largest military forces and NATO, has enabled the United States to establish control over global economic and political processes. At the same time, this has ensured the dependence of other countries and the central role of American capital in the global capitalist system.

China’s Claims to Hegemony

Until the 2010s, the position of the United States was indisputable. However, by this point, China’s growing capital began to pose a threat to the U.S. China’s rise has largely been driven by economic cooperation with the United States, which makes the situation somewhat paradoxical for American foreign policy, yet predictable within the capitalist system as a whole.

From 1990 to 2015, according to the Rhodium Group and the National Committee on U.S.-China Relations, American companies invested approximately $228 billion in China, completing around 6,700 deals. In addition to direct investments, U.S. companies brought advanced technologies that had not previously been widely available in the country: high-tech equipment, software, engineering solutions, and production methods. Moreover, 71% of U.S. FDI in China was in greenfield projects, i.e., projects involving the creation of physical infrastructure, factories, warehouses, and production facilities from scratch.

This transfer of technologies and economic processes led to a qualitative leap in Chinese industry: it shifted from manual labor and outdated methods to automated, standardized, and globally competitive production. American investments became not just a source of capital but a catalyst for China’s technological and industrial transformation, contributing to the growth and establishment of Chinese corporations.

And now, having grown on the investments of American corporations, China began to be seen by the United States as a threat to the entire system of the U.S.-centered world order that had existed until then. For the first time at the official level, China was explicitly named a threat to American leadership in the U.S. National Security Strategy of 2017. This was during the first administration of Donald Trump.

In the document, China was designated not merely as a competitor of the United States – a special term was introduced for this: a "revisionist state" (i.e. the state that wishes to revise the current world order), whose policies "directly contradict the interests and values of the United States". Since then, American officials, politicians, and government institutions have regularly reiterated this assessment, calling China the main threat.

The most recent assessment of China is presented in the latest report by the U.S. Defense Intelligence Agency (DIA) dated May 11 of this year. The authors of the report place the PRC at the top of the list of "competitors and adversaries" of the United States and, among other things, state:

"China maintains its strategic objectives: to become the leading power in East Asia, challenge the United States in the struggle for global leadership, reunify Taiwan with mainland China, ensure the development and resilience of the Chinese economy, and achieve technological self-sufficiency by midcentury. China continues to build its global capabilities to counter the United States and its allies in diplomatic, informational, military, and economic spheres. PRC President Xi Jinping will continue to oversee nationwide efforts to enhance China’s preparedness to compete with the U.S. and its allies in the Indo-Pacific region and beyond, as well as targeted efforts to undermine public and political support for U.S. military alliances and security partnerships".

The report examines China’s militarisation and rising defence spending, the modernization of its nuclear arsenal, the growth of its space capabilities, cyber threats posed by China to the United States and Western countries, as well as its policy towards Taiwan. Ultimately, this section of the report is written in the spirit of recognising the intractability of contradictions between the U.S. and China and the inevitability of a direct armed confrontation in the near future.

1.2. The Chinese Alternative

The growth and consolidation of Chinese capital have led to its active export abroad. China has paid particular attention to investing in the infrastructure of other countries. In 2013, the "One Belt, One Road" initiative was launched, aimed at creating a network of transport and trade corridors connecting dozens of countries. This programme not only strengthens China’s economic and political influence but also creates a system of states dependent on Chinese investments.

“One Belt, One Road”

In 2013, China announced the launch of the “One Belt, One Road” project (officially known as the Belt and Road Initiative, BRI). Its aim is to develop infrastructure and trade links between Asia, Europe, Africa, and other regions through investments in transport, energy, and digital projects.

The initiative comprises two main components: the “Silk Road Economic Belt” (an overland route) and the “21st-Century Maritime Silk Road.” In 2014, the Asian Infrastructure Investment Bank (AIIB) was established to support the initiative. Although China is not the bank’s sole shareholder, its stake is about 30%, giving it substantial influence over the institution’s decisions.

In practice, the initiative pursues the following objectives:

• The creation of new trade routes under China’s control.
• The strengthening of China’s economic and diplomatic leverage over other countries.
• The expansion of China’s political influence.
• The international expansion of Chinese companies.

Through large-scale investments in transport networks, ports, railways and energy infrastructure, China is building an alternative global economic system in which Chinese capital and goods occupy a dominant position.

According to Chinese authorities, the cumulative expenditures on the Belt and Road Initiative had exceeded $1 trillion by 2023. As of July 2023, 126 countries had joined the project by signing cooperation agreements with China. The BRI covers roughly 63% of the world’s population and more than one-third of global GDP. By 2023, over 3,000 projects had been implemented under the initiative.

The leading recipients of BRI investments include:

1. Pakistan. The China–Pakistan Economic Corridor (CPEC) is a large-scale infrastructure project connecting the port of Gwadar in southwestern Pakistan with the Xinjiang Uyghur Autonomous Region in northwest China. The project comprises road and rail links, port facilities, and energy projects, with a total estimated cost of more than $62 billion.
   In 2015, China obtained the right to operate the port of Gwadar for 43 years through the China Overseas Port Holding Company (COPHC). The official purpose was the expansion and modernization of the port. In practice, the port’s strategic location near the Strait of Hormuz allows China to influence sea lanes used to transport oil and gas from the Middle East. The port also reduces China’s reliance on the Strait of Malacca, through which about 80% of China’s imported oil passes.
2. Kazakhstan. Between 2013 and 2020, China invested approximately $18.5 billion in Kazakhstan’s economy under the BRI, of which $3.8 billion went to the transport sector. The total value of joint projects exceeds $21 billion. Kazakhstan is part of several BRI corridors, including the China–Kazakhstan–Russia–Europe route and a southern corridor through Central Asia, Turkmenistan, and Iran to the Middle East. Container traffic through Kazakhstan has increased more than one hundredfold since the project’s launch.
3. Indonesia. By 2024, China had invested around $40 billion in Indonesia through direct investments and infrastructure projects.

The most significant Indonesian BRI project is the Jakarta–Bandung high‑speed railway. The project is implemented by the Kereta Cepat Indonesia China (KCIC) consortium, in which Indonesian state companies hold 60% and Chinese partners, including China Railway, hold 40%.

China has also invested heavily in Indonesia’s mining and metallurgical sectors. In Central Sulawesi Province, an industrial park, the Indonesia Morowali Industrial Park (IMIP), was built where the Chinese company Tsingshan Holding Group produces nickel and steel.

Significant investments have also been made in the energy sector and in port modernization.

The “One Belt, One Road” project, together with the Asian Infrastructure Investment Bank (AIIB), can be understood as a Chinese counterpart to the IMF and the World Bank. Under the initiative, countries receive investments and loans for development without being required to liberalize their economies or reduce the public sector. This characteristic weakens the political leverage of the United States over participating countries.

Nevertheless, China, like the United States, pursues its own interests through these investments. According to available data, the hidden debts of BRI countries to China have reached $385 billion. Through debt obligations, China exerts political influence on other states.

For example, in 2017, Sri Lanka, unable to repay an $8 billion debt to China, leased the Hambantota port to the Chinese state company China Merchants Port Holdings for 99 years in exchange for a debt reduction of $1.12 billion. China acquired 70% of the port’s shares and control over the surrounding area. We have previously written about this debt trap

Hambantota port is located on Sri Lanka’s southern coast near key Indian Ocean sea lanes. These routes carry about 80% of the world’s seaborne oil trade and 50% of container traffic between Asia, Europe, and the Middle East. Control of Hambantota gives China influence close to India, a regional competitor, and strengthens its position in South Asia.

In 2009, during Greece’s debt crisis, the Chinese state company COSCO acquired 51% of the Piraeus port for €500 million. In 2016, COSCO increased its stake to 67% for €368.5 million. Total investment has amounted to about €1.5 billion. Piraeus, near Athens, is the largest port in the Mediterranean and a gateway to Europe for Asian goods. It lies at the intersection of trade routes between Asia, Europe, and Africa. Piraeus handles some 17 million tonnes of cargo and 3.7 million containers annually, making it a key node in the “One Belt, One Road” initiative.

The project supports the development of China’s western regions and helps address excess domestic production capacity by expanding markets in Eurasia. Chinese corporations gain access to participating countries’ resources. By creating economic dependence through investments and building infrastructure, the PRC strengthens its political influence and brings developing states into a subordinate relationship.

The Development of China’s Military Industry and Armed Forces

China’s military-industrial sector has experienced rapid growth over the past three decades. This expansion is evident both in rising financial allocations and in the development of the technological base. Military spending was under $10 billion in the early 1990s and reached $292 billion by 2023. The U.S. Department of Defense, in its report to the U.S. Congress on Chinese military and defense activities, cites even higher estimates for China’s military budget, between $300 billion and $450 billion. By this measure, China ranks second after the United States. The increase in defense spending has been accompanied by major investments in the defense industry, the construction of new production capacities, and the expansion of scientific and technical potential.

The People’s Liberation Army (PLA), as of 2023, is the world’s largest by personnel: about 2 million on active duty and roughly 510,000 in reserve. The PLA is undergoing active modernization. The share of modern weaponry in its arsenal rose from 20% in 2000 to more than 70% by 2023.

Key achievements of the Chinese armed forces include the development of the fifth‑generation J‑20 fighter, which entered service in 2017, and the substantial expansion of the navy. By 2023, the People’s Liberation Army Navy comprised roughly 370 surface ships and submarines, making it the largest navy in the world by number of hulls. China is also a leader in the production of hypersonic missiles and is developing intercontinental ballistic missile capabilities. China has been increasing its nuclear arsenal as well: from 2019 to 2024, the estimated stockpile grew threefold, from about 200 to around 600 warheads.

The U.S. Department of Defense characterizes China’s military ambitions as follows:

• China seeks the “great rejuvenation of the Chinese nation” by 2049. This objective encompasses modernization across political, economic, social, technological, and military spheres, aimed at reshaping the international order in ways that favor China.
• Chinese military policy is framed around defending sovereignty – particularly regarding Taiwan, Hong Kong, Xinjiang, and Tibet – ensuring security and advancing national interests. By 2049, the PLA is expected to become a “world‑class military.”
• The Department of Defense notes a growing Chinese readiness to use military force to defend “developmental interests” abroad, a stance reflected in amendments to the National Defense Authorization Act of 2020.

In recent decades, China has emerged as one of the world’s leading military powers. Its rapid accumulation of financial, technological, and human resources reflects the ruling authorities’ ambitions to strengthen global influence and attain military superiority by the mid‑21st century.

Penetration of Chinese Capital into Europe

After World War II, Western Europe remained largely under the sway of American capital and investment. After the collapse of the Soviet Union, Eastern Europe also came predominantly under the influence of American capital.

By the early 2010s, however, Chinese capital had found opportunities for investment in Europe. By 2016, China had invested roughly €100 billion in European countries, with 59% of that amount directed to the largest economies: the United Kingdom, France, and Germany. Chinese investment activity in Europe peaked in 2016–2017 and then declined sharply.

The primary objectives of Chinese investments in Europe are access to Western technologies and to the European market. From 2005 to 2024, the United Kingdom attracted $104 billion in Chinese investment, according to the China Global Investment Tracker. These investments are concentrated in energy, real estate, technology, and transport.

In the energy sector, China participates in the construction of the Hinkley Point C nuclear power station, the largest nuclear project in the world. Hinkley Point C is expected to supply about 7% of the United Kingdom’s electricity demand. Project costs have reached an estimated £41–47 billion. For China, involvement in this project represents entry to Western nuclear‑technology markets and a strengthening of its position in global energy.

In 2020, the steelmaker Jingye Group acquired British Steel, giving China access to the European steel market and related technologies. In France, Chinese investment has been active since the early 2010s, including Dongfeng Motor’s dealings with Peugeot‑Citroën and the acquisition of Club Med by the Fosun conglomerate.

Germany saw major transactions in high technology: Midea acquired the robot manufacturer Kuka, and ChemChina purchased KraussMaffei, a leader in polymer‑processing equipment. These acquisitions strengthened China’s position as a major producer and consumer of plastics.

In 2018, Geely became the largest single shareholder in Daimler AG, acquiring 9.69% of the company and gaining access to technologies in electric vehicles.

After the trade tensions with the United States began in 2018, Chinese investment in Europe declined overall but focused more on strategic sectors. Between 2020 and 2024, a key destination was Hungary. In 2023, Hungary received 44% of all Chinese investment in Europe. Major projects include BYD’s planned factory in Szeged (announced December 2023) and CATL’s battery plant in Debrecen.

Penetration of Chinese Capital into Latin America

From 2005 to 2024, China invested more than $200 billion in Latin America, according to the China Global Investment Tracker. Unlike in Europe, where China often seeks access to technology, in Latin America, its investments have focused on gaining control of raw materials needed for high‑technology industries, notably for electric‑vehicle and battery production.

About half of the world’s lithium reserves are concentrated in the “Lithium Triangle” (Chile, Bolivia, Argentina). In 2018, the Chinese company Tianqi Lithium acquired nearly 25% of the Chilean firm SQM, gaining access to lithium deposits in the Atacama Desert and increasing its share of the global lithium market from 12% to 15%.

Ganfeng Lithium has invested in Argentine lithium projects since 2020, including the Cauchari‑Olaroz deposit in partnership with the Canadian company Lithium Americas. By 2024, these investments enabled exports of lithium to China of up to 40,000 tonnes per year. In 2022–2023, Ganfeng also negotiated for lithium development in Mexico, but no agreement had been finalized.

China has also invested heavily in copper. In 2014, MMG Limited paid $7 billion for the Las Bambas mine in Peru, the world’s second‑largest copper producer. Under the BRI, China has also invested in infrastructure for transporting natural resources.

A second major area of Chinese investment in the region is power generation and grid infrastructure. In 2017, State Grid Corporation acquired control of Brazil’s CPFL Energia, strengthening China’s position in the energy sector, including renewables. In the same year, China Gezhouba Group began construction of the Condor Cliff and La Barrancosa hydroelectric projects in Argentina, a $4.7 billion program that it financed to the extent of about 85%.

In 2020, China Southern Power Grid acquired roughly 25% of Transelec, Chile’s largest transmission‑line operator, but did not obtain full control of the company. Transelec operates more than 10,000 km of transmission lines that supply power to about 98% of Chile’s population.

1.3. Points of Contact

The threat of cheap, mass-produced Chinese goods

Chinese goods are often cheap and mass-produced, a longstanding threat to American capital. This process is rooted in the fundamental principles of capitalist competition, where cost reduction is a key factor in increasing profits.

Chinese products are inexpensive due to the very low wages of Chinese workers, $6 per hour versus $30-$35 per hour in the United States. On average, Chinese goods are 2-6 times cheaper than American ones, depending on the category: smartphones up to 6 times; clothing 6-12 times; electronics 2-3 times. This price advantage has enabled Chinese producers to displace American products not only on the global market but also within the US domestic market.

At the same time, China produced nearly 29% of the world’s industrial goods as of 2023. Overall, by the measure of value added in manufacturing (which reflects the sector’s economic contribution to the national economy), China surpassed the United States already in 2010.

Chinese products have long held a firm position in the American market. The United States imports 41% of its consumer electronics, 26% of household appliances, and 28% of textiles from China. This abundance of affordable Chinese goods reduces demand for American-made products, forcing US manufacturers to either cut output or move production abroad.

The situation intensified in 2001 with China’s accession to the WTO. Since then, the United States has lost 3.7 million manufacturing jobs, mainly due to the influx of cheap Chinese goods. According to the Economic Policy Institute, three-quarters of the jobs lost from 2001 to 2018 were in manufacturing.

The rise of Chinese influence in the American economy is more than trade competition; it is a struggle for global economic dominance. In 2022, the US trade deficit with China reached $382 billion, reflecting deep integration and interdependence between the two economies: the United States as a consumer, and China as a producer.

On a global scale, this process has systemic effects: American capital is losing control over world and domestic markets, ceding ground to a new center of accumulation in the form of China.

Investment Expansion of China vs. Investment Expansion of the United States

China’s investment expansion inevitably comes into conflict with American capital. Both countries compete for control of resources, technologies, and strategic markets worldwide. This confrontation, which affects both developing and developed countries, reflects not only economic interests but also a deeper struggle for political dominance within capitalist competition.

To illustrate the clash between Chinese and US foreign direct investment in other countries, we will consider the period from 2013 to 2023 and plot the relevant data (foreign direct investment, FDI) on a chart.

We take 2013 as the starting point because that year saw the launch of the “Belt and Road” initiative, which can be considered the beginning of the most active period of Chinese overseas investment. The accompanying chart does not show regions such as Europe and North America, since including them would skew the visualization due to their much larger figures. This data is noted in the chart’s caption.

North America
Chinese investment in the region is concentrated in the United States, primarily in high‑technology assets and strategic markets. After 2017, investment volumes declined due to restrictions. The main sectors are technology (40%), commercial real estate (25%), and energy (20%).

Cumulative US investments in Canada and Mexico amount to $444 billion, mainly in manufacturing (35%), finance (25%), and energy (20%). The United States significantly outpaces China in the region owing to active participation in manufacturing and trade, while China lags because of restrictions.

Europe
China has invested about $215 billion in Europe. Volumes grew until 2018 and then fell because of EU controls. The main sectors are manufacturing (30%), energy (25%), and technology (20%).

Europe remains the largest destination for US FDI; it accounts for roughly 45% of the total, with cumulative investments of about $1 trillion. Priority sectors are finance (30%), manufacturing (25%), and technology (20%). The United States leads through finance and industry; China has lost ground due to EU restrictions.

East Asia
Chinese investment in the region is constrained by competition from Japan and South Korea and by the advanced state of local economies. The main sectors are technology (40%), manufacturing (30%) and renewable energy (15%).

After 2018, US investment in China decreased but increased in Japan and South Korea, largely in high technology. Key sectors are manufacturing (35%), technology (25%) and finance (15%). The United States retains an advantage through its allies; China concedes ground due to competition and a smaller presence in certain high‑tech industries.

Southeast Asia
This region differs from the traditional zones of American capital influence. China substantially increased investment from 2013, peaking in 2018-2020. Southeast Asia became a key region for the Belt and Road Initiative. The main sectors are transport (ports, railways) about 40%; energy (coal, hydropower), 30%; and manufacturing (textiles, electronics), 15%.

US investment also grew from 2013 and accelerated after 2018 due to supply‑chain diversification. Priority sectors are manufacturing (electronics, textiles), 40%; technology (semiconductors, IT), 25%; and finance, 20%.

Overall, China leads in the region through BRI infrastructure projects, while the United States strengthens its position via manufacturing and technology, offering an alternative to Chinese influence.

South Asia
Chinese investment in the region is concentrated in Pakistan, providing access to the Indian Ocean. About 50% of investments go to transport infrastructure (ports, roads), 30% to energy (coal, hydropower), and 10% to metal extraction.

The United States mainly invests in India, and investment volumes have grown steadily since 2013 and rose sharply after 2017. Approximately 40% is directed to technology (software, IT), 25% to manufacturing (pharmaceuticals, automobiles), and 20% to finance (venture capital, banking).

Thus, the United States leads China in the region owing to its technology focus in India, while China emphasizes infrastructure in Pakistan.

Central Asia
A key region for the Belt and Road Initiative, due to proximity, China actively invests in energy (gas, oil) about 45%; transport (railways, highways, pipelines) 30%; and resource extraction (metals) 15%.

American investments are modest here due to competition with China and Russia; they concentrate in energy (40%), resource extraction (30%), and manufacturing (15%). China, therefore, dominates through strategic investments in energy and transport, while the United States maintains a minimal presence.

The Middle East
Chinese investments have grown steadily since 2015, driven by the Belt and Road Initiative and energy projects. The main sectors are energy (oil, gas), 50%; transport (ports, logistics), 25%; and resource extraction (metals), 15%.

US investments rose from 2013 and peaked in 2017-2019, then slowed because of political instability. Principal sectors are energy (40%), finance (25%), and technology (15%).

Overall, China leads the United States through large energy projects and BRI activity, while the United States focuses on allies and lags in total investment scale.

Australia and Oceania
Chinese investments peaked in 2013-2016 and then declined due to Australian restrictions. Still, 95% of Chinese investment in the region goes to Australia. The main sectors are resource extraction (iron, coal, etc.), 40%; energy (coal, gas), 25%; and agriculture (land, food production), 20%.

US investments are also concentrated in Australia and have grown steadily since 2013. Key sectors are energy (gas, coal) 30%; resource extraction (iron, gold, etc.) 30%; and finance (banks, funds) 20%.

The United States and China are at parity in investment in the region.

Latin America
China invested actively in the region in 2013-2019, but rates slowed due to economic and political instability. The main sectors are energy (oil, hydroelectric) 40%; resource extraction (copper, lithium) 30%; and agriculture (soybeans, land) 15%.

US investments are concentrated in offshore financial centers (about 50%) and in the region’s largest economies (Brazil, Chile). Key sectors are finance 40%, energy 25%, and manufacturing - 20%.

In this region, the United States leads through the financial sector, while China focuses on raw materials and lags in finance.

Africa
Chinese investment is concentrated in resources and infrastructure – the region also remains an important destination for Chinese loans and construction contracts. Main sectors are energy (oil, renewables) 40%; resource extraction (copper, cobalt) 30%; and transport 15%.

US investment has grown slowly and remains modest. Principal sectors are technology (IT, telecommunications) 35%; energy 25%; and resource extraction (gold, diamonds, etc.) 20%.

In Africa, China substantially outpaces the United States in resource investment, while the United States is limited to niche projects and a smaller strategic presence.

This is the map of investment confrontation between the United States and China across world regions. It may appear that Chinese capital does not pose a strong threat to the United States: Chinese investment exceeds American investment in only four of the ten regions considered. Nevertheless, this constitutes a significant threat to American capital, because there is no other economic power in the world capable of competing with the United States at this scale. Moreover, if the trend continues, China could, in the coming decades, not only consolidate its leadership in these regions but also increase investment in other regions, displacing the United States.

Under intensified global economic rivalry, the confrontation between China and the United States has reached a stage at which Chinese capital and goods are instruments that undermine the traditional dominance of the American economy.

Key facts illustrating this process:

1. Chinese goods undermine the position of American capital in consumer markets by displacing US products through low prices and mass production that reduces revenues of American firms and employment in the United States.
2. Chinese exports increase the United States’ economic vulnerability by eroding its domestic manufacturing base.
3. Chinese capital, by investing in technology, weakens American leadership. It creates competition in key high‑technology sectors and reduces the world’s reliance on American innovations.
4. Chinese capital, through politico‑economic projects (for example, the Belt and Road Initiative) and rising foreign direct investment in other countries, erodes US influence, drawing countries and resources under Chinese sway.

US Policy: Partnership with the EU and Strained Relations with China

Relations between the United States, the European Union, and China display two poles: a partnership with Europe and a growing confrontation with Beijing. At first glance, this difference may seem odd: the EU, possessing considerable economic power, could theoretically compete with the United States in the same way as China yet this has not been the case. At least, it has not been so far.

The conventional view that the US-EU alliance rests on shared “democratic values,” while confrontation with China stems from its “authoritarianism,” is superficial and does not reflect the deeper causes of these relationships. Ideological slogans such as “defending democracy” or “combating authoritarianism” serve primarily as a cover for protecting the economic interests of capital.

The alliance between the United States and the EU is founded on the alignment of economic interests among their ruling circles, which represent transnational corporations and financial institutions. Their interests converge because of the deep economic and political interdependence that began with the Marshall Plan.

The Marshall Plan created conditions for a long‑term “alliance” by linking American capital with European markets and production. From 1948 to 1952, the United States provided $13 billion (about $150 billion in 2023 prices) to restore the economy of Western Europe after World War II. Sixteen countries received aid, including West Germany, France, and the United Kingdom. The plan’s main objectives were to rebuild industry, prevent economic collapse, and, crucially, to contain the spread of communism.

Large‑scale financial support for European industry attracted many American corporations to Europe. By 1950, US foreign direct investment in Europe reached $1.7 billion in contemporary prices, which significantly advanced the expansion of American capital in the region.

The Marshall Plan was not only an economic measure but also a political project. During the Cold War, it shaped Western Europe as an anti‑communist bloc under US influence. In 1949, this position was institutionalized with the creation of NATO, serving the common aim of European and American capital to protect the capitalist world order from the threat of a global socialist revolution.

Moreover, the EU itself emerged in part thanks to the Marshall Plan and US support. In 1948, the Organisation for European Economic Co‑operation (OEEC) was founded to coordinate the distribution of aid. This was a first step toward European integration that eventually led to the formation of the EU.

In the twenty‑first century, European and American capital are deeply interwoven through mutual investment. From 2000 to 2023, cumulative US direct investment in the EU amounted to $3.95 trillion, while EU investment in the United States totaled $3.46 trillion (64% of total FDI in the United States). Together, the United States and the EU account for roughly 40% of world GDP and a substantial share of global trade. Their alliance enables them to shape the rules of the global economy through international institutions.

European capital, therefore, is an ally of the United States, integrated with American capital, supporting its leadership and sharing the objective of preserving the dominance of Euro‑American capital while maintaining US primacy. Chinese capital, by contrast, threatens the United States: it displaces US products, undermines manufacturing, competes in technology, and draws global resources toward itself. China challenges the US‑centerd model of the contemporary capitalist system and seeks to claim the position of global imperialist hegemon in place of the United States.

II. Lines of Confrontation

2.1. Economic struggle

Since the mid‑2010s, China’s rise as an alternative center of capital accumulation has begun to threaten the United States’ dominant position. Naturally, once China’s ambitions became apparent, American capital sought to isolate it from international markets and advanced Western technologies in order to limit the growth of the Chinese economy. This produced trade wars and economic confrontation between the two countries.

Blocking Chinese investment

Before the trade wars began, a mechanism for screening investments was introduced in the United States to block the growth of Chinese influence in strategic sectors.

Since 2018, the Committee on Foreign Investment in the United States (CFIUS) has tightened control over Chinese investments following the adoption of the Foreign Investment Risk Review Modernization Act (FIRRMA). Previously, more than half of the investment in the US technology sector originated from China. As a result, Chinese foreign direct investment (FDI) in the United States in 2019 fell by more than five times compared with 2017 and remained at low levels in subsequent years.

Although investment screening helped the United States reduce the role of Chinese investment in the American economy, it also forced China to redirect its investments to Latin American countries, which further strengthened its position in that region.

The United States exerts pressure on its allies to counter China. For example, following US accusations that Huawei engaged in espionage, the British government in 2020 banned the use of the company’s equipment in 5G networks and required operators to remove it by 2027.

Before 2020, Huawei played a significant role in the United Kingdom, having invested £3.3 billion in the economy and supported 26,000 jobs. The decision cost the United Kingdom £2 billion to re‑equip networks. China responded by reducing investment in British projects and redirecting funds to other countries.

Trade War 2018-2024

Trade wars became one of the principal instruments used by the United States in its economic confrontation with China, aimed at reducing the trade deficit and weakening Chinese exports. The first Trump administration initiated this policy, imposing 25% tariffs in 2018 on $50 billion of Chinese goods. By the end of 2019, tariffs covered imports worth more than $550 billion, roughly two thirds of all Chinese exports to the United States. China responded with reciprocal measures, imposing 10% tariffs in 2019 on $75 billion of American goods.

After the change of administration in the White House with Trump’s departure and Biden’s arrival, the intensity of the confrontation did not decline. On the contrary, in 2024, the Biden administration sharply raised tariffs on key Chinese goods: electric vehicles from 25% to 100%; steel and aluminium from 7.5% to 25%; and semiconductors from 25% to 50%. China responded by imposing export restrictions on gallium (used in semiconductor manufacture) and germanium (used in fiber optics, solar panels, and infrared optics).

Under US pressure, the European Union in 2024 imposed 45% tariffs on Chinese electric vehicles, accusing China of unfairly subsidising its industry. In response, Beijing urged automakers such as BYD and SAIC to reduce investments in countries that supported these measures.

The trade wars immediately produced significant changes in global supply chains, fragmenting them and redistributing trade flows.

Companies reliant on Chinese production began relocating factories to countries with lower tariffs, Vietnam and Mexico, for example. As a result, Vietnam’s exports to the United States rose from $49 billion in 2018 to $118 billion in 2023. Part of this growth reflects electronics manufacturers, such as Foxconn, moving operations there from China.

China, for its part, increased trade with Africa and Latin America. However, this restructuring raised costs: relocation increased companies’ expenses by 10–12%. For the global economy, this meant higher prices and reduced supply‑chain efficiency, which hit developing countries dependent on exports particularly hard.

A 2019 study by the National Bureau of Economic Research found that American consumers bore 93% of the tariff burden through higher prices. Total consumer losses amounted to $1.5 billion per month. The effects for China were also tangible: US tariffs reduced Chinese exports by $100 billion per year, contributing to a 1.5% decline in GDP.

The onset of the US-China trade war struck at the model of “globalism” not only as the economic integration of the modern capitalist world but also as a propagandistic ideology. From the idea of “free movement of capital and goods,” under which capitalist countries supposedly “cooperate peacefully,” the world moved closer to a bloc confrontation among imperialist centres – a classic condition of international relations under capitalism.

This period of trade wars also coincided with the introduction of the CHIPS Act – another significant US step against China intended to restrict China’s access to advanced semiconductors and to restore US leadership in the sector. Enacted in 2022, the law provided $52 billion in subsidies for chip production in the United States, including $40 billion for a TSMC plant in Arizona, and was accompanied by sanctions banning exports of advanced technologies to China.

Semiconductors, or chips, are the foundation of the modern economy. They power smartphones, computers, automobiles, medical equipment, telecommunications systems, military technologies, and artificial intelligence. They underpin cloud computing, the Internet of Things, autonomous transport, and household appliances. We have previously written about the Chip trade war.

Historically, the United States led chip design through companies such as Intel, NVIDIA, AMD, Qualcomm, and Apple, which develop processor architectures, graphics chips, and design software. Major chip manufacturing is concentrated in Taiwan. Taiwan Semiconductor Manufacturing Company (TSMC) is the global leader, having mastered the production of advanced 2 nm chips.

The United States depends on Asian supplies of so‑called “mature” (or old) chips (process nodes of 28 nm and above), a substantial share of which are produced in China. Despite limited access to advanced technologies because of US sanctions, China has actively expanded production of mature chips. As of 2023, it accounted for 27% of global manufacturing capacity in the 20-45 nm range and 30% in the 50-180 nm segment. These semiconductors are widely used in the automotive industry, electronics, industrial and medical equipment, and telecommunications.

Mature chips form the basis of many devices, underscoring their strategic importance for the world economy. Drawing on extensive experience in key technologies, China pursues a strategy of flooding the market with lower‑cost products to displace global competitors. This tactic has already proven effective in sectors such as solar energy and battery manufacturing.

Widespread use of Chinese chips can leave national economies vulnerable in the event of a confrontation with China. Dependence on Chinese supplies could produce critical shortages at key moments, enabling China to subordinate other states to its interests.

Thus, despite lagging in advanced chip manufacturing, China is well positioned to capture the market for mature semiconductors, where it has already made significant gains. The CHIPS Act, adopted by the United States, aims to contain China’s progress in advanced technologies, but does not resolve the problem of China’s dominance in the mature‑chip segment.

Escalation of the Trade War in 2025

In 2025, the trade war between the United States and China, intensified with the return of D. Trump to power, reached a qualitatively new level in the struggle for global economic dominance. The main trend is an intensified economic confrontation, with the United States seeking to undermine China’s position by using trade tariffs as a principal instrument.

China produces far more goods than its domestic market can absorb and is therefore highly dependent on exports, a vulnerability the United States is pressing. Over a matter of weeks from late March to early April, the economic confrontation between China and the United States rapidly escalated: the sides exchanged a series of new tariffs on each other’s imports. The United States began raising tariffs in March, progressively increasing the overall rate on imports of Chinese goods to 145% by April.

The purpose of the American tariffs is to reduce the presence of Chinese goods on the world market and to prevent their dominance, especially in strategic sectors such as technology and engineering. American capital reasonably fears that Chinese products may eventually displace American ones. An experience of this kind already exists.

A similar scenario occurred in the 1980s, when the Japanese automobile industry, supported by American investment and technology, rapidly captured the global market. Japanese companies such as Toyota and Honda offered higher‑quality and more affordable cars, causing a sharp drop in demand for products from American giants General Motors and Ford. By the early 1990s, the market share of American manufacturers in the United States had declined, and many plants closed, producing unemployment and economic decline in Detroit and other industrial centres.

That painful experience compels the United States to act decisively to prevent a far greater threat from China. While Japan in the 1980s challenged American corporations mainly in automobiles and high‑technology goods, the People’s Republic of China now poses an existential threat to the United States, endangering its economic and political dominance worldwide. This struggle unfolds against the backdrop of a deepening crisis of the global capitalist system, intensifying inter‑imperialist contradictions and the prospect of new global conflicts.

The tactical approach of the American administration in this new phase of the tariff war is clear. On the one hand, the United States closes its market to Chinese goods. On the other hand, it exerts pressure on other countries through the same tariff mechanism, forcing them to make concessions. In effect, the American administration poses a stark choice to countries worldwide to either comply with its demands or lose profit. This is straightforward, undisguised coercion, expressed in massive tariffs and unilateral revisions of trade and economic agreements.

These two directions combine to form the current US tariff policy. Ultimately, it is aimed at achieving three key objectives for the United States:

1. Weakening China through economic pressure and attempts to induce a crisis of overproduction by cutting China off from markets;
2. Pressuring allied and “undecided” countries in order to prevent closer ties with China and to tighten American influence within spheres already under US control;
3. Reindustrialisation and an increase in the military budget through the return of industrial capacity to the United States, an established plank of Trump’s campaign platform.

As noted in our piece on the US elections, the administration of Donald Trump represents the radical wing of the American oligarchy. This segment of the ruling class seeks to restore the United States’ former position through an extremely aggressive policy and a tariff war with China, one of its most significant instruments.

At the same time, the tariffs introduced not only against China but also against other countries make exporting to the United States unprofitable. Whatever the outcome of Trump’s “tariff negotiations” with other major world economies, it is evident that the trade war he has unleashed will lead to a radical reorganisation of manufacturers’ logistics worldwide. The consequences will spread through the entire global production chain, produce shocks at all levels of the world economy, and intensify inter‑imperialist contradictions to an extreme degree. Ultimately, the now‑open confrontation between the United States and China is nothing other than a path toward a new world war – a risk made more likely by China’s reciprocal measures.

Thus, China, which had previously avoided sharp confrontation to preserve access to the American market (for example, by limiting cooperation with Russia and observing secondary sanctions), has adopted similarly aggressive policies. Beijing raised tariffs on American goods to 125%, imposed export restrictions on rare earth elements (China accounts for 60% of global production and 85% of processing), placed American companies PVH Corp and Illumina on its “List of Unreliable Entities,” and opened an antitrust investigation against Google.

In doing so, China sent two messages to the world: a willingness to negotiate and peacefully delineate spheres of influence, and a determination to resist further escalation by the United States, including by imposing direct measures such as sanctions against American companies.

In an effort to strengthen domestic production and redistribute profits, the United States imposed tariffs on imports from most countries. Initially, this step created a potential opportunity for China to form an anti‑American economic bloc by uniting states harmed by US protectionism.

Following a dialogue between Xi Jinping and António Costa in January, during which countermeasures to protectionism were discussed, China and the EU began talks. In March and April, China’s Minister of Commerce Wang Wentao and European Commissioner Maroš Šefčovič agreed to study replacing 45% tariffs on Chinese electric vehicles with minimum pricing measures. In July 2025, the President of the European Council, António Costa, and the European Commission President, Ursula von der Leyen, planned to visit Beijing for a summit with Xi Jinping. This decision clearly reflected the EU’s desire to maintain dialogue with China amid tensions with the United States.

The situation then changed rapidly. Apparently recognizing the risk of an anti‑American bloc forming, Trump announced a 90‑day pause in the application of elevated tariffs, leaving a base rate of 10% for most countries except China.

As a result, China lost the initial advantage it might have gained from other states’ dissatisfaction with American tariffs. Even countries traditionally within China’s economic influence, such as Vietnam and Cambodia, chose a pragmatic course of negotiating with the United States rather than joining an anti‑American front. These moves by close partners compelled China to intensify diplomatic efforts to retain influence in the region: in April, Xi Jinping visited Vietnam, followed by trips to Malaysia and Cambodia.

Confronted with a relative balance in which neither side could obtain a decisive advantage, the United States and China in May agreed to reduce tariffs for 90 days: Washington lowered tariffs from 145% to 30%, and Beijing reduced them from 125% to 10% upon resuming exports of rare earth elements. In effect, the parties temporarily froze the conflict and took a pause. It is most likely that in the near future, after replenishing and strengthening their capacities and expanding their alliances, China and the United States will enter a new phase of escalation, since the causes of the confrontation remain.

Regardless of how the trade war develops, it is clear that the rivalry between China and the United States has entered a more active economic phase. Through tariff barriers, trade restrictions, and economic pressure, both countries will seek to expand their spheres of influence while weakening the other’s position.

2.2. Political and Diplomatic Struggle

The political rivalry between the United States and China has intensified as a natural extension of the economic conflict between the two countries. This rivalry encompasses key regions and countries where the interests of the world's two largest economies intersect. The tariff war and economic rivalry only exacerbate this political confrontation.

Taiwan

Taiwan is one of the central points of political struggle between the United States and China. China considers Taiwan an integral part of its territory under the "one country, two systems" principle and attempts to persuade other states to recognize this fact. In contrast, the US supports Taiwan by providing military and diplomatic assistance, though it does not formally recognize its independence.

Both the US and China need Taiwan primarily as a technological and manufacturing base for the semiconductor industry. At the end of the fourth quarter of 2024, Taiwanese companies TSMC and UMC produced 72% of the world's semiconductors.

Amid China's limited access to Western semiconductor technologies, the interest of both countries in Taiwan continues to grow. China is in a difficult position because it considers Taiwan, the world's chip manufacturing hub, to be part of its territory, yet its own semiconductor technologies lag behind, accounting for less than 10% of the global market.

Thus, three important factors come into play:

1. China has a formal reason for seizing Taiwan: it considers Taiwan to be its territory. This claim is formally recognized by most countries in the world.
2. Controlling Taiwanese semiconductor production would allow China to quickly develop its industry and become a world leader in technology.
3. Taking Taiwan would also give China the opportunity to cut the United States off from the largest semiconductor technology base.

The U.S. is aware of this threat, which is why it supports Taiwan through visits by high-ranking officials, arms supplies, and rhetoric about defending "democracy." These actions provoke protests in China, which considers them interference in its internal affairs.

One of the most high-profile events in this standoff was the visit of U.S. House Speaker Nancy Pelosi to Taiwan in 2022. In response, China conducted unprecedented military exercises around the island, including live-fire missile drills and a simulated blockade. It was the largest display of force by the PRC in decades.

In accordance with the National Defense Authorization Act, the United States increased its military aid to Taiwan to $10 billion in 2023.

In May 2024, following the inauguration of Taiwan's new president, Lai Chingte, who is regarded as a supporter of independence, China initiated the "Joint Sword 2024A" exercises. These exercises were designed to "punish separatists" and caution "external forces" (i.e., the U.S.). The exercises included a simulation of a blockade of the island's key ports.

In October 2024, China held another large-scale military exercise focused on blockading Taiwan and controlling strategic areas.

Indo-Pacific region

The U.S. IndoPacific Strategy (IPS) is a foreign policy initiative aimed at strengthening the United States' position in the IndoPacific region. This region covers territories from the west coast of the United States to the Indian Ocean and includes Northeast and Southeast Asia, South Asia, and Oceania. The region is considered crucial to 21st century global economics and politics, as it is home to over half of the world's population and accounts for approximately 60% of global GDP and twothirds of global economic growth.

The concept of the Indo-Pacific region as a unified strategic domain began to take shape in the United States during the 2010s, particularly during the Trump administration. In 2018, the U.S. Pacific Command was renamed the U.S. IndoPacific Command (USINDOPACOM), a symbolic step that underscores the region's new militarization trend.

In 2019, the Trump administration released the Indo-Pacific Strategy Report. In the report, China was labeled a "revisionist power" that seeks regional hegemony and global dominance in the long term.

The strategy has been further developed under the Biden administration. In February 2022, the White House published an updated version of the strategy, emphasizing cooperation with allies to create a "free and open" region. The U.S. has continued to strengthen alliances, such as the Quadrilateral Security Dialogue (Quad: U.S., Japan, Australia, and India) and AUKUS (Australia, the U.K., and the U.S.), and has launched the IndoPacific Economic Framework (IPEF) to promote economic cooperation.

The U.S. maintains a significant military presence in the region, with approximately 375,000 military personnel and civilian staff under the command of USINDOPACOM. The U.S. also conducts exercises with Japan and South Korea, such as Freedom Edge, and is building up the defense capabilities of its allies.

In May 2022, Chinese leaders, including Foreign Minister Wang Yi, repeatedly claimed that the U.S. Indo-Pacific strategy aimed to “create divisions, incite confrontation, and undermine peace.” Wang Yi called the strategy “doomed to failure,” arguing that it runs counter to the region's interests. In March 2023, China accused the U.S. of trying to "encircle China" with this strategy.

China believes that the IPS is promoting the narrative of the "Chinese threat," portraying the PRC as an aggressor in order to justify the strengthening of the U.S. presence in the region. In response, China is promoting its Belt and Road Initiative to increase its economic and political influence in Asia and beyond. Through the BRI and trade, China is making countries dependent on its capital and markets. This reduces their interest in the IPEF, which does not yet offer comparable investments.

China is expanding its cooperation with the Association of Southeast Asian Nations (ASEAN), offering alternative economic partnerships such as the Regional Comprehensive Economic Partnership (RCEP), which was signed in 2020. The RCEP is an initiative aimed at strengthening economic cooperation and creating the world's largest free trade area, covering approximately 30% of the global GDP.

China avoids direct confrontation with alliances such as the Quad and instead works with individual countries, offering them favorable terms. This could lead to a split among U.S. allies because not everyone in the region is willing to fully oppose China. For instance, India continues to maintain economic ties with China despite growing contradictions between the two countries.

Despite the significant U.S. military presence in the region, China maintains its dominant position thanks to its economic influence through the Belt and Road Initiative and the Regional Comprehensive Economic Partnership (RCEP). The U.S. lags significantly behind in economic competition because its IPEF does not offer comparable investments.

South China Sea

Since 2013, China has reclaimed approximately 1,300 hectares of land in the South China Sea, turning the reefs and shoals of the Spratly Islands into fortified military bases. For instance, China has constructed military facilities on Mischief Reef, including a 3-kilometer runway capable of accommodating strategic bombers and port facilities for military ships. According to the Center for Strategic and International Studies (CSIS), the islands are equipped with HQ9 anti-aircraft missile systems, which have a range of up to 200 kilometers, and YJ12B anti-ship missiles. This strengthens China's military control over the region.

China claims 90% of the South China Sea based on the so-called “nine-dash line,” despite the fact that a 2016 ruling by the Hague Tribunal found these claims to be legally unfounded. Every year, about $3.4 trillion of global trade, including 80% of China's energy imports, passes through this region, making it extremely important for the Chinese economy.

In turn, the US and its allies are increasing their military presence and exerting diplomatic pressure on China. Since 2015, the U.S. Navy has conducted over 100 freedom of navigation operations (FONOPs), deploying destroyers and aircraft carriers within 12 miles of the disputed islands. China has repeatedly viewed this as a provocation.

The militarization of the South China Sea has exacerbated tensions between China and its neighboring countries, particularly the Philippines, a U.S. ally. Clashes between Chinese and Philippine vessels became more frequent in 2023, including incidents involving the blocking of Philippine fishermen and clashes at Scarborough Reef and Second Thomas Shoal. These actions reflect China's attempts to strengthen its control over disputed territories. Backed by military infrastructure on artificial islands, these actions increase pressure on regional players and provoke a response from the U.S.

Vietnam has also reported an increase in violations. In 2022 alone, Chinese ships entered their exclusive economic zone near the Paracel Islands over 40 times.

Although Japan has no direct claims in the South China Sea, it is nevertheless stepping up its support for its allies. For example, in 2022, Japan transferred ten ships to the Philippines. Japan also participates in Quad exercises. In 2024, Japan conducted joint maneuvers with the United States, Australia, and India near the disputed waters.

Diplomatic negotiations, such as the efforts of ASEAN and China to establish a Code of Conduct in the South China Sea, have stalled. In 22 years, an official compromise has yet to be reached due to disagreements over the scope of application and dispute resolution mechanisms.

At the 2023 ASEAN summit, China accused the US of "incitement," to which the US responded by pointing to the PRC's "aggressive expansion." These accusations only exacerbated the situation, leaving the region in a fragile state of equilibrium where any incident, from a ship collision to an aircraft interception, could escalate into a major crisis.

Nevertheless, with the exception of direct U.S. allies such as the Philippines, countries in the region are increasingly focusing on economic ties with China, making the region an "asset" for the PRC.

Iran

Trade relations between China and Iran began in the 1970s but became significant following the 1979 Islamic Revolution. Iran was subjected to sanctions, and China provided military assistance during the Iran-Iraq War. Since the 2000s, China has become Iran's "window to the world," particularly after the U.S. tightened sanctions in 2018. In turn, Iran has acted as a pro-China force in the region, distracting the U.S. from the Indo-Pacific region and weakening its influence in the Middle East.

In 2021, Iran and China signed a 25-year strategic partnership agreement. In exchange for oil supplies to China at reduced prices, China agreed to invest $400 billion in Iran's oil and gas sector and petrochemical industry. Despite US sanctions, China became the largest buyer of Iranian oil by 2024, importing about 1.2 million barrels per day.

China uses a “shadow fleet” of tankers registered in third countries and complex financial schemes to circumvent sanctions. These schemes include payments through small banks and cryptocurrencies. In 2022, the U.S. imposed secondary sanctions on several Chinese companies accused of buying Iranian oil under the guise of Malaysian or Indonesian oil.

Through the Belt and Road Initiative, China is developing Iran's infrastructure, including its ports and transport networks. This initiative strengthens Iran's position as a transit hub for Chinese goods traveling between Asia and the Middle East.

China has supported Iran within international organizations, such as the United Nations (UN), by opposing US sanctions and calling for a return to the 2015 nuclear deal. In March 2023, China successfully mediated the restoration of diplomatic relations between Iran and Saudi Arabia. This was a significant achievement for Chinese diplomacy.

Iran plays a key political role in China's Middle East strategy. The Ayatollah regime serves as a springboard for China to expand its influence and position in the region. It also serves as a tool to put pressure on the U.S. and its allies, primarily Israel. China indirectly supports Iran's actions against Israel by secretly supplying components for drones and the technology to manufacture them, thereby encouraging Iranian leaders to play a more active role in the conflict. All the while also supplying Israel with drones.

All of this illustrates the longstanding conflict between Iran and Israel, including the escalation that occurred this summer. It reveals the underlying struggle between the imperialist powers supporting each side. The United States and China also played a role. Although Washington publicly called on the parties to show "restraint," it essentially approved and supported the Israeli strike on Iran, allowing Israel to start the escalation. Israel undertook most of the "dirty work," including sabotage behind Iranian lines, eliminating military commanders and leading nuclear scientists, and striking nuclear facilities and energy infrastructure. To top it off, the U.S. itself launched an attack on Iran. These actions all fit into the overall strategy of weakening Iran and reducing China's influence in the region.

China participated in the conflict more indirectly, through Pakistan. China attempted to provide Iran with diplomatic support and use nuclear blackmail when Pakistan declared its intention to launch a nuclear strike against Israel if Israel used nuclear weapons against Iran. Ultimately, all of this exposed the weakness of China's allies in the region.

Although the latest round of escalation between Israel and Iran has ended for now, the conflict will resume in the future, primarily due to infringed Chinese interests. China's long-term energy and political plans in Iran have been partially disrupted. Additionally, the growing confrontation between the U.S. and China will inevitably draw their proxy countries into a new conflict.

Russia

Until 2022, relations between Russia and China remained limited despite their shared propaganda rhetoric and strategic goals of countering American capital. Both countries criticized the "unipolar world" and advocated "multipolarity," a concept that manifested itself in their cooperation within organizations such as the SCO and BRICS.

However, China kept its distance from Russia in practical terms. For instance, China avoided supporting Russian initiatives, such as military action in Syria. After 2014, China refrained from joining sanctions against Russia, but did not show clear solidarity. Instead, it preferred neutrality in order to preserve economic ties with the West.

The events of 2022 and Western sanctions have radically altered the dynamics of Russian-Chinese relations. U.S. and EU sanctions, including restrictions on technology exports, asset freezes, and the exclusion of several Russian banks from SWIFT, created an economic vacuum for Russia that China began to fill. Not only did China refuse to isolate Russia, but it also became its key economic partner during this period.

China has significantly increased its presence in the Russian market. In 2023, trade between Russia and China reached a record $240 billion, a 26% increase from 2022. China became Russia's largest trading partner, surpassing the EU for the first time.

At the same time, China has become the main supplier of various goods to the Russian market, including cars, electronics, and industrial equipment. This fills the gaps left by the departure of Western companies. China has also become the largest buyer of Russian energy resources. In 2023, Russian oil exports to China increased by 24%, surpassing Europe as the primary market for Russian gas.

Due to the European embargo on Russian oil, China became a lifeline for Russia. In 2023, China imported approximately 2.3 million barrels of Russian oil daily, accounting for nearly one-third of all Russian oil exports. At the same time, China took advantage of Russia's weakened position to secure significant discounts. According to Rosneft's president, China saved $1418 billion by shifting oil purchases from the Middle East to Russia.

Russia finds itself in a unique position amid the global confrontation between the United States and China. Both the U.S. and China seek to use Russia's military and political influence to their advantage. Its geographical location, military potential, and resource base make Russia a valuable ally in the struggle between these two imperialist centers.

For the U.S., Russia could be a means of containing China, particularly in the Asia-Pacific region. Exerting military and political pressure on China from the north, through Russian territory, could weaken the PRC position. Deploying US military bases near the Chinese border or strengthening the military presence in the Arctic, where Russia has a significant military presence, would create an additional source of tension for China.

In this regard, the Trump administration has demonstrated a noticeable shift toward rapprochement with Russia, contrasting with the traditional U.S. policy of containing Russia. Immediately after his inauguration, Trump began actively negotiating with the Russian president to end the conflict in Ukraine. These negotiations continued with meetings between Trump administration representatives and Russian officials. In April 2025, special envoy Steve Whitcoff visited Moscow to discuss the terms of a truce.

Trump publicly expressed his desire to "work with Russia" and said it would be "easier" for him to negotiate with Russia than with Ukraine. He also said that Russia wants peace and stated that Crimea would remain part of Russia as part of a possible peace agreement. These statements were accompanied by pressure on Ukraine, including the temporary suspension of military aid and intelligence cooperation, in an attempt to force Ukraine to accept terms favorable to Russia. In March 2025, Trump explicitly stated that he did not want Russia and China to grow closer, emphasizing that the U.S. must "work with Russia" to prevent that from happening.

For China, Russia serves as a military and political counterweight to the U.S. and NATO, particularly in Europe. The strengthening of the Russian-Chinese alliance enables China to indirectly exert pressure on the Western bloc via Russia. Russia's military presence and activity on Europe's eastern borders divert NATO's resources and attention away from China, thereby reducing pressure on it in the Indo-Pacific region.

Russia is also an important supplier of energy resources and raw materials for the Chinese economy, especially in the context of a potential conflict over Taiwan. Additionally, Russia provides China with access to military technology, including air defense systems and hypersonic weapons, strengthening its military capabilities.

Currently, Russia is leaning more toward China due to its economic and political isolation from the West amid the Special Military Operation. However, this dependence poses risks to Russia's ruling class because China is leveraging its economic superiority to tighten its grip on Russian resources and markets. Additionally, China's growing ability to influence the policies of the Russian leadership raises questions about how it will use this influence in the near future.

The Russian Federation understands this perfectly well and is trying to "have its cake and eat it too." In February 2025, the Russian president proposed that the U.S. jointly develop rare earth element deposits in Russia. According to the U.S. Geological Survey, the country's rare earth element reserves are estimated at 3.8 million tons. However, Russian estimates put the reserves at up to 28.7 million tons, which is of interest to American companies. This proposal was made amid the trade war between the U.S. and China, during which China restricted the export of rare earth elements. In March 2025, K. Dmitriev, the Kremlin's special representative for economic cooperation, confirmed that negotiations on rare earth elements with the U.S. had begun.

Currently, Russia is significantly influenced by China. However, the Russian leadership is seeking to reduce its dependence on China by exploring opportunities for rapprochement with the U.S., as evidenced by negotiations on Ukraine and proposals for jointly extracting rare earth elements. The success of this strategy depends largely on the outcome of the Special Military Operation, as well as on further developing contacts with the US regarding sanctions, the economy, and conflict resolution.

Recognizing Russia's strategic importance in the global confrontation with China, the United States will continue its efforts to separate Russia from the PRC. In turn, China, for which Russia is a key military, political, and resource player, will resist these attempts by strengthening its influence on the Russian Federation. This could include more active participation by China in the resolution of the Special Military Operation, allowing Beijing to strengthen its position in Russian politics and the economy.

Russia's position remains extremely vulnerable. Within the country, the risks associated with the economic consequences of sanctions and social tensions are growing. Meanwhile, uncertainty about Russian policy persists on the international stage. Should serious changes occur in Russia, the U.S. and China will likely intensify their efforts to definitively pull Russia over to their side. Each side will use its leverage economically, politically, and possibly military to achieve this goal.

At the same time, the Russian ruling class may try to take an intermediate position under certain circumstances, acting as an economic and political mediator between the U.S. and China, especially in the event of a direct confrontation between the two countries. Only time will tell which side Russia will ultimately take in the struggle between China and the United States.

India

The competition between the U.S. and China for influence in India is part of a broader struggle for power in the Indo-Pacific region. India is the world's second most populous country with rapidly growing economic potential and a strategically important location in South Asia. Therefore, India is a key player in this competition.

The United States views India as a strategic partner in containing China in Asia. Since the end of the Cold War, their relationship has gradually strengthened, especially since the early 2000s. In 2008, the two countries signed an agreement on civil nuclear cooperation. India joined the Quad (Quadrilateral Security Dialogue) in 2007 and again in 2017.

Moreover, U.S. policy aims to strengthen India's economic and political potential so that it can serve as a counterweight to China, the new "world factory." A key step in this direction was the 2023 agreement to establish the India-Middle East-Europe Economic Corridor (IMEC), positioned as an alternative to China's Belt and Road Initiative (BRI).

This route is intended to connect India and Europe via the Middle East, facilitating the transportation of goods and energy resources. It involves developing railway and port infrastructure, laying submarine cables for data transmission, and building pipelines to export electricity and green hydrogen.

The creation of IMEC is a key example of the U.S. strategy to limit China's economic and political influence. The Belt and Road Initiative, a Chinese project, aims to develop a global network of trade routes connecting China with Asia, Africa, and Europe. IMEC, on the other hand, offers an alternative route that bypasses China and its allies. IMEC is not only an infrastructure project but also part of a broader U.S. strategy to shift global production and trade chains from China to allied countries.

The U.S. is also counting on India in military terms. Americans are promoting arms sales to India, conducting joint military exercises, and investing in the Indian economy to reduce its dependence on China. However, India maintains its strategic autonomy by avoiding complete subordination to American interests. This sometimes causes friction, as seen with India's purchase of Russian (С400) weapons in defiance of US sanctions.

In turn, China views India as both a partner and a potential rival. China aims to keep India within its sphere of influence and prevent India from fully aligning with the United States. However, territorial disputes and competition for regional influence complicate relations.

From June 15 to 16, 2020, clashes broke out between Indian and Chinese troops in the Galwan Valley, which is located on the disputed border between India and China. Twenty Indian soldiers were killed, and China officially acknowledged the deaths of four of its servicemen. Following these events, India banned dozens of Chinese apps and tightened control over Chinese investments. Despite this, India refuses to participate in the Belt and Road Initiative, even though China remains a major trading partner of India.

For several decades, China has used Pakistan as a strategic counterweight to India, supporting it in order to contain Delhi should it take an anti-Chinese stance. The key economic instrument is the China-Pakistan Economic Corridor, which is part of the Belt and Road Initiative.

Since the 1960s, Beijing has provided Pakistan with military assistance, supplying weapons and helping to develop military technology, including its nuclear program. India believes China helped Pakistan become a nuclear power in the 1990s, changing the balance of power in the region. Additionally, China has repeatedly blocked UN Security Council resolutions against Pakistani militants, which India views as protection for Islamabad and a threat to its own interests.

In April 2025, relations between India and Pakistan sharply deteriorated after a terrorist attack in Pahalgam. India accused Pakistan of supporting the terrorists responsible for the attack, which triggered a diplomatic crisis involving mutual expulsions of diplomats, border closures, and the suspension of trade. This was followed by armed clashes. China likely views this escalation as a means of weakening India without becoming directly involved in the conflict. Pakistan, on the other hand, is acting more confidently, bolstered by Beijing's support.

Most of Pakistan's weapons come from China. They use the Wing Loong I/II and the CH4B drones, which are capable of reconnaissance, electronic warfare, and precision strikes. The quantity of UAVs Pakistan receives is classified, but China has increased its drone exports to Pakistan in recent years.

Additionally, Islamabad possesses Chinese short-range ballistic and air-to-air missiles. Half of Pakistan's tactical fighters are Chinese-made or jointly developed, primarily the JF-17 Thunder.

These Chinese weapons significantly strengthen Pakistan's capabilities in its confrontation with India. Regardless of the outcome of the Indian-Pakistani conflict, Beijing is unlikely to abandon using Pakistan as a tool to pressure Delhi and will enter the fray when it benefits China.

Europe

Since 2022, Europe has begun to realize the need for military and political independence by coordinating sanctions against Russia with the US. The conflict in Ukraine has accelerated the review of EU defense strategies. In 2023, the defense industry grew by 16.9% to €160 billion, with the naval and land sectors growing by 17.7%. This growth reflects a desire for strategic autonomy, driven by the need to counter Russia and mistrust of the U.S.'s long-term intentions.

On the other hand, US policy toward Europe underwent a sharp shift with the arrival of the Trump administration in 2025. While Washington and the EU had previously supported Ukraine with measured arms deliveries and sanctions aimed at "slowly strangling" Russia, the new US strategy focused entirely on countering China. This shift led to reduced domestic and foreign financial aid, a freeze on support for Ukraine, the dissolution of USAID, and the reallocation of resources to the military.

At the same time, the U.S. seeks to maintain its hegemony over the EU by preventing its militarization and consolidation. Washington does not want an independent Europe with its own armed forces and foreign policy. Rather, the U.S. wants to see the EU as a subordinate market and military ally. To this end, the U.S. supports far-right Eurosceptics who have a pro-American stance and a moderate attitude toward Russia. One such leader is Viktor Orbán, whose policies weaken EU unity.

In France, Marine Le Pen plays a similar role. Her National Rally party advocates for "national sovereignty," criticizes the EU, and promotes closer ties with the U.S. while softening its rhetoric toward Russia. In Germany, Alternative for Germany (AfD) performs a similar function. Despite internal divisions, the party undermines European integration and inflates antimigrant sentiment and skepticism toward panEuropean institutions. This serves the interests of the U.S., which seeks to maintain the fragmentation of the EU.

Elon Musk, the current co-chair of the U.S. Department of Management Efficiency and one of the world's richest individuals, openly supports the Alternative for Germany (AfD) party. His interactions with the party reflect his role as an ideologue and proponent of rightwing populism, which he promotes for both personal and political reasons.

The tension between the U.S. and Europe creates opportunities for China. By keeping Russia within its sphere of influence, Beijing exploits divisions within the Euro-Atlantic bloc to gain access to European markets with Chinese capital. China could support EU peace initiatives by mediating negotiations with Russia or by intensifying the militarization of Europe and Ukraine. If Trump's “peace agenda” fails, China is prepared to take the lead by offering Ukraine its own “peace plan.” This would strengthen China's position as an alternative to the U.S. on the world stage, adding Ukraine and Europe to its assets alongside Russia.

For now, China is in a favorable position in Europe. Russia remains within its sphere of influence. The rift between the U.S. and Europe benefits the position of Chinese capital. Trump's unpredictable policies undermine E.U. trust in the U.S. Beijing is taking advantage of this without taking overtly active measures because tacit anti-American rhetoric in Europe distracts EU capital and the population from criticising China's support of Russia as before.

Trump's tariffs complicated the situation. They intensified the struggle for influence in Europe and gave China additional opportunities to strengthen its position on the continent.

European companies that are facing restrictions in the U.S. market will likely start actively seeking alternative destinations for exports and investments. China is a potentially attractive partner for them, given its huge domestic market and infrastructure projects.

Thus, while Europe's economic dependence on the U.S. may decrease, its dependence on China will increase. By strengthening trade and investment ties with Beijing, especially through initiatives like the Belt and Road Initiative, China will be able to increase its influence over the European economy, gradually shifting the balance of power in its favor.

Overall summary at this point
The United States and China are engaged in a classic fight for spheres of influence in each particular region. Both sides are using economic, military, and diplomatic tools to lay the groundwork for a potential full-scale conflict. They are recruiting allies and dependent countries to strengthen their positions in the inevitable conflict over global dominance.

This struggle is taking place in several areas: Europe, Russia, Ukraine, the Middle East, India, Pakistan, the Asia-Pacific region, Latin America, and Africa. In more and more places, the struggle is manifesting as armed conflict with indirect involvement from the U.S. and China. A clash of economic and political interests between American and Chinese corporations lies behind almost every major conflict in the world today.

All of this comes together in the broader context of the global confrontation between the United States and China as they compete for world domination. In this situation, compromise is only temporary. Ultimately, each side wants to be the sole superpower that dictates its rules to the rest of the world.

2.3. The fight for AI

The competition between the United States and China in the technology sector is an important aspect of their overall confrontation. Technological progress provides countries with economic advantages, such as reduced production costs, access to new markets, and advanced warfare methods. Domestic innovation enables a country to be independent of external suppliers and control access to its developments. For this reason, both countries are investing significant resources in research and development to strengthen their global position.

The technological competition between the United States and China is particularly evident in the field of artificial intelligence (AI). The competition for leadership in AI is linked to its potential to alter economic and military balances. AI can optimize production, reduce labor costs, and create new markets. In the military, AI can control drones, analyze data, and coordinate operations.

Developed by the American company OpenAI, ChatGPT is one of the most well-known artificial intelligence models based on the GPT (Generative Pretrained Transformer) architecture. Since its launch in November 2022, ChatGPT has become a symbol of generative AI, capable of holding conversations, generating text, solving problems, and adapting to various use cases, such as writing code and creating content.

Founded in 2015, OpenAI is a nonprofit organization whose self-declared mission is to “ensure that AI benefits all of humanity.” Its initial founders included Elon Musk, Sam Altman, and Greg Brockman. However, by 2019, the company realized that competing with tech giants like Google would require significant financial investment. This led to the creation of a hybrid structure in which the nonprofit mission remains, but the commercial subsidiary, OpenAI LP, generates profits.

OpenAI attracted significant investments from Microsoft in 2019 and 2023, subsequently integrating ChatGPT into Microsoft's products, including Azure, Bing, and Office 365. In 2024, OpenAI raised an additional $6.6 billion in a funding round led by Thrive Capital. OpenAI earned $3.7 billion in 2024 and plans to triple its revenue in 2025.

ChatGPT requires thousands of servers equipped with Nvidia A100 and H100 chips to operate daily, costing approximately $700,000 per day. These high daily costs and dependence on expensive chips have paved the way for more efficient competitors to enter the AI market.

In December 2024, the Chinese company DeepSeek, founded in 2023 by scientist Liang Wenfeng, introduced the DeepSeekV3 model. In January 2025, they introduced the more powerful and specialized DeepSeekR1. These models are positioned as competitors to ChatGPT.

DeepSeek demonstrates performance comparable to ChatGPT's in tasks such as solving mathematical equations, generating code, and processing text. Additionally, DeepSeek claims that training its model had cost them less than $6 million using Nvidia H800 chips, whereas OpenAI's ChatGPT required approximately $100 million. Additionally, DeepSeek only uses about 2,000 Nvidia chips, whereas ChatGPT requires tens of thousands of processors to operate at peak capacity.

Unlike OpenAI's closed ecosystem, DeepSeek is an open-source model that allows developers worldwide to use and modify it freely. The existence of DeepSeek alone challenges the monopoly of ChatGPT and other commercial AI models. The rapid development of the Chinese model with fewer resources calls into question the necessity of large budgets and advanced chips for creating AI. This alarmed investors immediately, leading to a 17% drop in Nvidia's stock in January 2025. Additionally, DeepSeek's open source code enables the accelerated development of AI outside the control of American companies, thereby reducing their market dominance.

However, DeepSeek poses not only an economic threat but also a political threat to the U.S. China's growth in creating affordable and effective AI solutions reduces the global market's dependence on Western technologies and intensifies competition between the two countries.

The threat to U.S. cutting-edge technologies prompted a swift response from the U.S. government and technology companies. DeepSeek has been banned from use on devices belonging to US federal agencies, including NASA and the Navy, since January 2025 due to "potential security threats." Some states, including Texas, New York, and Virginia, have banned DeepSeek in government agencies due to the risks of espionage and data leaks. US lawmakers have proposed a nationwide ban on using DeepSeek in government agencies.

Australia, Taiwan, Italy, and South Korea have banned DeepSeek in government agencies due to violations of local privacy laws.

To support American AI models, the U.S. government announced significant investments in AI infrastructure, totaling $500 billion, through the Stargate Project. This project is a collaboration between the government and private companies, including OpenAI, SoftBank, and Oracle. Additionally, on January 23, 2025, Trump signed an executive order titled "Removing Barriers to American Leadership in Artificial Intelligence," aiming to eliminate regulatory barriers to AI development and stimulate innovation by offering tax breaks and grants.

The rivalry between the U.S. and China in the field of artificial intelligence (AI) will intensify with each passing year. In today's world, AI is already key to the economic, industrial, and military development of both countries.

III. Is War Possible?

The rivalry between China and the United States is a conflict between imperialist powers competing for control over global resources and markets. China’s growth, which largely began after the 1978 reforms and was reinforced by major foreign investments and subsequent global expansion, is confronting the established hegemony of the United States, which is based on financial mechanisms and military superiority. The contradictions between the two countries create preconditions for a military conflict, but it is restrained by objective factors arising from the nature of capitalist production.

3.1. What could trigger an escalation of the conflict?

Economic struggle. The basis for a potential military clash, which threatens to escalate into a world war, lies in the very nature of the rivalry between Chinese and American capital for dominance over global resources, sales markets, and areas for capital investment, as well as production chains. This is not merely competition between two powers, but a manifestation of the deep contradictions of capitalism, where capital accumulation inevitably collides with the finite nature of resources and the need for constant expansion of markets and spheres of influence.

The United States, as the principal imperialist power, has spent decades building its hegemony through control over financial flows, international institutions, and military power. Its economy requires a constant influx of resources and markets to sustain profits.

However, China’s rise has changed the balance of power. Thanks to cheap labor, state planning, and an influx of foreign investment, China has turned into a vast manufacturing base, seizing a significant share of the global industrial goods market. This has not only undermined the position of American manufacturers but has also created U.S. dependence on imports, which is seen as a challenge to its economic security.

The U.S. policy aimed at containing China, starting with the 2018 trade war, is an attempt to slow down the inevitable redistribution of economic power. The introduction of tariffs, sanctions against Chinese companies, and restrictions on technology exports reflect the desire of American capital to maintain its privileged position. However, these measures only exacerbate the contradictions.

China, in turn, uses its influence in global supply chains and access to raw materials to redirect trade flows, strengthening ties with other countries and reducing dependence on the American market. This tug-of-war over the economic sphere inevitably heightens tensions, as both sides rely on economic growth while the global market is limited. The U.S. cannot afford to lose control over the world economy, and China cannot halt its development without risking an internal crisis.

Economic struggle escalates into a military threat when the stakes become too high. Control over key resources such as oil and rare earth metals, markets for goods, and areas for capital investment turns into a matter of survival for the economies of both powers.

Any attempt by one side to monopolize resources and markets may provoke a direct conflict, especially if economic pressure reaches its limit and internal problems begin to threaten the position of the ruling oligarchic groups in both countries.

Thus, the economic struggle between China and the United States is not merely a trade war, but a clash between two capitalist economies, each striving to dominate global production and distribution. It is a classic inter-imperialist conflict, similar to those that twice before in human history led to world wars. As long as capitalist logic dictates the necessity of expansion, this rivalry will push both powers to the brink, where military conflict will not be an accident but a natural outcome of accumulated contradictions and an inevitable necessity for their further development.

Diplomatic deadlocks are a direct consequence of the antagonism between China and the United States and one of the key factors that could lead to military confrontation, as they reflect not just disagreements but a fundamental confrontation between two powers over the restructuring of the world order.

This rivalry stems from the objective necessity of each side to defend and expand its positions in conditions where compromise is becoming increasingly unattainable. At the diplomatic level, contradictions intensify due to the inability of the existing international relations system, based on the capitalist model of dominance and subordination, to reconcile the interests of the old U.S. hegemony and the rising power of China, which pushes both powers toward the use of force as a last resort to resolve the conflict.

China, using its economic influence and political weight, is actively strengthening its positions in international institutions such as the UN and creating alternative platforms like the Asian Infrastructure Investment Bank.

This undermines the traditional dominance of the United States, which for decades relied on institutions such as the IMF and the World Bank to advance its interests. For American capital, losing control over global mechanisms of oversight and governance is perceived as a direct threat, causing the U.S. to increasingly resort to unilateral actions – sanctions, military alliances, and displays of force.

China, facing these measures, interprets them as an attempt to stifle its development, which only strengthens its determination to defend its claims on the international stage.

The epicenter of this diplomatic confrontation is Taiwan, where economic and strategic interests intertwine with questions of national prestige. This region, which accounts for a significant share of global semiconductor production, is not just a territory but a key to technological independence for China and to maintaining American superiority in hightech industries.

China sees reunification with Taiwan as a way to break its dependence on Western technologies, while the United States, by increasing military support for the island and supplying weapons, seeks to keep it within its sphere of influence. Regular Chinese military maneuvers in the Taiwan Strait and the U.S. Navy’s responses create a situation where any small incident, whether an accidental collision or provocation, can escalate into open conflict. Diplomacy fails here because neither side is willing to back down: for China, it is a matter of survival; for the U.S., of preserving global influence.

Another example of a diplomatic deadlock is the Indo-Pacific region, where the United States, through its containment strategy and alliances such as the Quad and AUKUS, is trying to encircle China with a ring of its allies. This is perceived by the PRC as a direct threat to its security and economic interests, especially within the framework of the "Belt and Road" initiative, which connects China with dozens of countries through infrastructure projects.

In response, China is increasing its presence in the South China Sea, strengthening artificial islands and asserting claims over disputed territories, which has met protests from U.S. allies the Philippines, Vietnam, and Japan. Every move by one side provokes countermeasures from the other, and diplomatic negotiations are mired in mutual accusations.

Any incident in this region, such as a collision between ships, interception of aircraft, or disputes over fishing zone,s risks spiraling out of control, especially if perceived as an attack on "national sovereignty" or economic interests.

3.2. What restrains the conflict?

Economic interdependence

The intertwining of the Chinese and American economies remains a powerful restraining factor that prevents the escalation of their rivalry into an open military conflict.

This interdependence stems from the deep integration of the two largest economies in the world, where severing ties threatens chaos in global supply chains and undermines the very foundation of capitalist accumulation, on which both sides’ interests rely. As long as profit and stability remain priorities, war becomes an undesirable scenario despite growing contradictions.

Bilateral trade between China and the United States, despite tariffs and sanctions, remains on a colossal scale. China continues to be a key supplier of industrial goods, electronics, and raw materials to the American market. For China, the American market is an important source of revenue necessary to sustain economic growth and internal stability.

The severing of these ties, as the consequences of the 2018 trade war showed, results not only in increased costs and loss of competitiveness but also in direct losses for capital. Both sides, therefore, find themselves in a position where destroying economic cooperation goes against their own interests.

Moreover, U.S. attempts to shift production to other countries India, Vietnam, or Mexico only partially address the problem of dependence on China. Restructuring supply chains takes time, investment, and does not guarantee the same efficiency provided by China’s industrial base.

Rare earth metals, essential for high-tech industries, are still largely controlled by China, making a complete break not only costly but practically impossible in the short term.

For China, a complete loss of the American market could trigger a crisis of overproduction and rising unemployment, threatening not only its economy but also social stability. This mutual vulnerability creates a situation where war becomes too risky a step for now, capable of undermining the economic foundations of both powers.

Nuclear weapons

The possession of significant nuclear arsenals by both countries makes direct military confrontation extremely risky. The United States has a larger and more advanced nuclear capability, but the rapid growth of China’s arsenal strengthens the factor of mutual deterrence. The awareness of the possibility of mutual destruction reduces the likelihood of the conflict escalating into a full-scale war.

Mutual destruction clearly cannot be the goal of capitalist circles in either country and is definitely an undesirable scenario for them. However, one cannot rule out the possibility that a potential armed conflict could escalate to such a scale and nature that the ruling circles of the U.S. and China might consider the limited use of nuclear weapons against each other acceptable. And where such use is considered possible, there is always a risk of uncontrolled nuclear escalation that could lead to a global catastrophe. This scenario becomes more likely the weaker the position of either side becomes in a military confrontation.

3.3. Preparation for War

In any case, the ruling classes of both powers are preparing for war. Both China and the United States are aware of the likelihood of a military confrontation and are steadily increasing their military capabilities.

In recent years, China has sharply hardened its stance on Taiwan, declaring its readiness for "reunification" by all means, including military force. Against the backdrop of growing confrontation with the United States, China is increasing its military power:

• China’s military expenditures in 2024 exceeded $230 billion, making it the second highest in the world after the United States.
• Military production is being intensified: construction of aircraft carriers, expansion of the fleet, modernization of the air force, and strategic rocket forces.
• The focus in the development of the military-industrial complex is shifting toward the technological race: hypersonic weapons, artificial intelligence, cyber warfare, and satellite systems.
• Large-scale exercises are regularly conducted off the coast of Taiwan, effectively constituting a partial military blockade of the island.

In the United States, the policies of Trump and his supporters also led to increased militarization:

• Under the slogan "Make America Great Again," the cult of the military and patriotism is being strengthened.
• The largest military budget in human history, amounting to $1.01 trillion, is planned for 2026.
• Military production is actively expanding, and a technological arms race with China is also underway.
• The emphasis is increasing on containing China through strengthening alliances (AUKUS, Japan, South Korea, the Philippines) and maintaining a presence in the Indo-Pacific region.

IV. Are the Chinese and Americans ready to kill each other?

Under capitalism, wars are started by governments and capitalists, but it is not them who do the fighting and dying – this is reserved for ordinary people on both sides of the conflict. Simple workers and their children are the ones to be sent to the front. It is them who bear the heaviest burden of war by paying a “blood tax” which will profit the capitalists, who are often spared from the devastating consequences of conflicts they start.

In the event of an armed conflict between the United States and China, the main burden would fall on the working class of both countries: soldiers, conscripts, defense industry workers, and all laborers in general. They would be the ones forced to shoulder the weight of war and sustain its daily needs. That is why the attitudes of the working class, the level of its awareness, and its susceptibility to propaganda determine not only the nature of the war but also the very possibility of it breaking out.

The corporations that dominate in the United States and China understand this all too well and make every effort to instil mutual hatred and hostility among their populations. At the same time, propaganda collides with a reality in which both American and Chinese workers share common interests and goals.

4.1. Living conditions of the Chinese working class

Wages
All of China’s economic achievements (its rise to the world’s second-largest economy and a global industrial hub) were paid for through the backbreaking labor and decades of extreme overexploitation of millions of Chinese workers.

From the very outset of market reforms, most notably in the 1980s and 1990s, China rose to prominence as the “world’s factory” precisely because the wages of an ordinary Chinese worker ranked among the lowest on earth, a mere $15-30 per month. This rock bottom cost of labor became the decisive factor prompting Western corporations to shift their production lines to China, enabling them to slash expenses dramatically. Yet even as the economy expanded and national capital grew in strength, the fate of China’s workers changed little, with their condition remaining, to a large extent, one of hardship and deprivation.

By the year 2000, the average wage had risen to 700 yuan compared to the previous decade, and by 2020 it had reached 8,000. In 2023, the average salary in China stood at just over 10,000 yuan, roughly $1,400. The minimum wage varies by region: the highest is in Shanghai, at 2,690 yuan per month (around $370), while the lowest is in rural areas, at 1,690 yuan (about $233).

Wage growth resulted from China’s integration into the global capitalist system and the shift in economic priorities that began in the early 2000s. Yet this increase did not eliminate the fundamental issue: exploitation. It merely changed its form, and alongside economic growth, social and economic inequality deepened.

In China, there is a pronounced disparity in wages between skilled and unskilled workers, citizens and migrants, as well as between rural and urban residents. Workers employed in hazardous and dangerous industries often receive pay that does not compensate them for the level of risk and the harshness of their working conditions. These positions are predominantly filled by migrants and low-skilled laborers, who are forced to accept low wages and unsafe conditions due to a lack of alternatives.

According to the Premier of the State Council of the PRC, in 2020, approximately 600 million Chinese, about 39% of the population, earned less than 1,000 yuan ($145) per month, that is, below the national minimum wage. Such earnings reflect the extreme poverty of a vast portion of the population and the staggering degree of class inequality.

However, the situation of skilled urban workers is no better. Up to 87% of the income of residents in major cities goes solely toward essential expenses such as rent, utilities, transportation, food, and communication. Young workers often cannot afford to pay mandatory social contributions, including pensions and healthcare. Meanwhile, living standards in rural areas lag even further behind those of the cities.

Overtime
Overwork is another cornerstone of China’s economic “miracle.” In 2024, the average Chinese worker put in 44.8 hours per week. According to Chinese law, standard working hours range from 40 to 44 hours per week, with overtime beyond this paid extra. In practice, however, overtime (especially in manufacturing) often exceeds the legal limit of 36 hours per month and is rarely compensated properly.

Low-skilled workers and migrants are particularly prone to extensive overtime. However, office employees are also largely forced to work extra hours, with half of them logging more than 10 hours of overtime per week.

In China, there is a widespread work schedule called “9-9-6”, which means working from 9 a.m. to 9 p.m., six days a week, totaling 72 hours per week. This grueling system has become a symbol of intense exploitation in China, particularly in the tech sector. The schedule is often presented as “voluntary,” yet refusal can result in dismissal or career stagnation. The practice violates Chinese labor laws but remains widespread with the tacit approval of the government.

This practice is most prevalent in IT giants like Alibaba, ByteDance, JD.com, and others. Up until 2021, their owners didn’t even shy away from openly praising the extreme exploitation of their employees. In 2019, Alibaba’s founder, Jack Ma, famously called the “9-9-6” work schedule a tremendous “blessing” for everyone. Meanwhile, Liu Qiangdong, founder of JD.com, stated that he does not consider employees who spend their time resting to be his “brothers.”

However, the employees of China’s tech giants were far from thrilled about the idea of spending their lives for the benefit of corporations. Between 2019 and 2021, outrage erupted over the “9-9-6” practice. Programmers and other IT workers protested through social media and the platform GitHub, creating the “996.ICU” repository (a reference to “work 9-9-6, end up in intensive care). The protesters condemned the unbearable schedule, which led to burnout and even deaths from overwork.

In 2021, following a series of employee deaths at Pinduoduo caused by grueling work, public outrage reached its peak. Under pressure from the protests, China’s Supreme Court declared the “9-9-6” practice illegal and required companies to pay compensation for overtime. However, after symbolic inspections and fines, the practice returned to the lives of Chinese workers, albeit in a more concealed form.

Housing
In a context where most of their income goes toward basic living expenses, buying a home either becomes a heavy burden for workers or is simply unattainable.

Official mortgage rates in China, ranging from 3% to 5% per year, are considered relatively low. In practice, however, access to mortgages is limited due to high down payments, starting at 30-40% and higher; for a second home, the down payment begins at 80% of the property’s price. Another barrier is the high cost of the housing itself. There is no public data on property prices in China, but indirect estimates put the average cost at around 1 million yuan.

With an average salary of 10,000 yuan, saving for a home would effectively require giving up all other expenses and literally living in near-starvation conditions for eight years without accounting for basic living costs. Considering that a significant portion of the population earns substantially less, only a minority can afford to buy a home: this mainly applies to the so-called “oligarchy” and the “labor aristocracy” with exceptionally high incomes. 

As a result, household mortgage debt in China has been rising for many years. Before the pandemic, 56% of urban households in China were in debt. By early 2025, Chinese household debt reached $11.5 trillion, or 63% of China’s nominal GDP, with mortgage loans accounting for over 70% of this total.

Retirement system
Another major problem for the Chinese working class is the lack of any guarantee of a secure old age. In 2020, the average monthly pension in China was around 170 yuan – an absurd $23.62, effectively equivalent to having no pension at all. The burden of supporting the older generation is, in practice, shifted by Chinese oligarchs onto the shoulders of their children, further increasing the financial pressure on the working population.

For some time, China had one of the lowest retirement ages: 60 for men and 50-55 for women. But in 2025, the retirement age is being raised to 63 for men and 55-58 for women. It is entirely expected that these numbers will continue to rise in the future.

Quality of life
Economic growth, accompanied by a corresponding rise in inequality, frequent and prolonged overtime, mounting debt, and instability, has triggered an epidemic of chronic stress and depression among Chinese citizens.

A 2023 survey revealed that more than half of office employees suffer from severe emotional pressure at work, while 46% live in a state of constant anxiety. In megacities such as Beijing, Shanghai, and Guangzhou, roughly three-quarters of workers struggle with chronic fatigue, sleep deprivation, and health problems caused by ongoing stress and overwork. In 2020, 51 million people in China were suffering from depression, 17.3% of all cases worldwide.

Surveys also point to an understandably low level of life satisfaction among the Chinese population. China ranks 64th out of 137 countries in the so-called “Happiness Index,” scoring particularly low in social security and civil liberties. Despite the growth in relative prosperity between 1990 and 2010, the average level of life satisfaction in China remained flat and even declined among poorer groups, further exacerbating social inequality.

Political system
The so-called “Communist Party of China” (CPC) has long since turned into an oligarchic clan structure masquerading as a party of the working class. Behind the loud slogans of “socialism with Chinese characteristics” lies a rigid power vertical of the superrich, serving the interests of transnational capital.

All real power in China is concentrated in the hands of a narrow group that unites the top party leadership, provincial officials, and executives of state-owned corporations. From there, it extends to the capitalists and oligarchs connected to them. State enterprises have long since become business empires, while the privatization of the 1990s gave rise to a class of the superwealthy, closely integrated into the party-state apparatus.

More than a hundred Chinese billionaire oligarchs hold positions in state bodies such as the National People’s Congress (formally the highest organ of state power in the PRC) and the Chinese People’s Political Consultative Conference, while also maintaining membership in the CPC. Notable figures include Jack Ma, founder of Alibaba; Ma Huateng, founder and chairman of Tencent; Hui Ka Yan, chairman of Evergrande; and Sun Dawu, founder of Dawu Group. It is obvious what “people” these figures represent, and it is certainly not those whose labor created their fortunes.

The CPC maintains its power not only through control of the economy but also via pervasive censorship, ideological indoctrination, and a repressive apparatus.

The internet in China is under strict control through a system known as the “Great Firewall of China”, which blocks access to numerous foreign websites, including Google and Wikipedia, while also filtering domestic content. Posts critical of the authorities or touching on sensitive topics are often quickly removed, and their authors may face consequences ranging from “preventive conversations” with the police to criminal prosecution. WeChat (the popular app used for communication, payments, and access to government services) serves not only as a convenient tool but also as a means of data collection. It is controlled by the authorities and can be used to monitor user activity and suppress actions deemed a threat to stability.

Journalists, politicians, human rights advocates, and even ordinary citizens sometimes disappear without a trace or end up imprisoned for statements or actions that contradict official propaganda. In the PRC, just like in other capitalist states, the right to free expression exists only insofar as it does not question the legitimacy of the ruling elite, Chinese capitalists.

A striking example of digital control over the population is the “social credit” system. Since 2014, China has been building what is essentially a mechanism for assessing the “trustworthiness” of citizens and organizations. Through it, the ruling corporations of the PRC seek to discipline the population, subject citizens to the will of the ruling class, and strengthen their class dictatorship. A low rating can deprive a person of the right to fly, as well as access to good schools and jobs.

At the same time, the authorities have been expanding the scope of video surveillance: as of 2024, more than 700 million cameras had been installed across the country. In the largest cities, surveillance density is especially high, for example, in Shanghai, more than 5,000 cameras monitor every square mile.

What large-scale censorship and strict digital control can lead to is clearly illustrated by the CPC’s policy toward the Uyghurs: under the pretext of combating separatism and terrorism, the authorities subjected them to repression and extensive surveillance.

Since 2014, Xinjiang has been subjected to a system of total control and repression. Millions of Uyghurs have come under round-the-clock surveillance, and hundreds of thousands have been placed in so-called "reeducation" camps, where loyalty to the CPC was drilled into them, the use of their native language was forbidden, the practice of Islam was banned, and traditional holidays were prohibited. The region was covered with checkpoints and facial scanners, every step was recorded in databases, and any "suspicious activity" from a beard deemed too long to a switched-off phone could serve as grounds for arrest. Uyghurs were subjected to systematic humiliation, violence, torture, forced labor, and the separation of families.

Beijing’s policy in Xinjiang is not a "fight against terrorism" but a systemic destruction of a people through forced assimilation and the dismantling of the foundations of their existence. The Uyghur tragedy has vividly demonstrated how the CPC turns the full power of its repressive apparatus against those who threaten its order. Today, Xinjiang has been crushed under this machinery of repression, but tomorrow the same "reeducation" and pressure may be used against ordinary Chinese citizens if they dare to demand better working conditions or social equality.

It is by the hands of ordinary Chinese workers from Guangdong, Shanghai, Shanxi, Hunan, or any other region that the entire economic power of modern China has been built. It is the labor of the Chinese worker, suffering from overwork and extreme exploitation, from digital control and censorship, that has paid for the superprofits of China’s transnational corporations. The ruling party, which calls itself "communist," suppresses any attempt at self-organization by the working class. When people demand the protection of their rights, the CPC responds with police violence, arrests, and the abduction of activists.

These are the conditions in which Chinese workers live, facing chronic stress, depression, burnout at work, and a sense of dissatisfaction with life. Propagandist clichés about "socialism with Chinese characteristics" have nothing in common with the harsh reality, where the labor of an ordinary PRC citizen is turned into a tool of oppression and the suppression of human will and aspirations.

Between the Chinese proletariat on one side, and the oligarchic clans hiding behind "red" rhetoric on the other, lies a deep class antagonism. For the Chinese worker, as for any worker in the world, "they have no homeland": the businessman and the worker live in different worlds and have different standards of living - one of whom owns nearly all the national wealth, while the other has to make do with a mere pittance. The wealth and luxury of some are paid for by the sweatshop labor of others.

Whatever foreign policy is being set by the ruling elite of China, it remains alien to millions of ordinary Chinese, for whom issues of life and well-being are more important. Nevertheless, it is precisely these people whom the PRC oligarchy exploits to advance its own interests, which are indistinguishable from any other imperialist power, disregarding the real needs of the working people.

4.2. The Situation of the Working Class in the USA

Many of the problems faced by ordinary Americans coincide with the difficulties encountered by Chinese workers.

Wages and Working Conditions
Americans, just like the Chinese, suffer from suffocating class inequality. The rigid class hierarchy is already apparent in income distribution: in 2022, the top 1% of earners received 20% of the national income, while the bottom 50% received only 13%. Since 1979, the incomes of the top 1% have grown by 182%, while those of the bottom 90% have grown by only 29%. All these point to a systematic distribution of the fruits of labor in favor of a narrow circle of the super-rich: heads of investment funds, corporations, top management, the political elite, and others.

Formally, the incomes of American workers are considered among the highest in the world: in 2020, the median annual household income in the U.S. was $67,000. But almost all earnings are offset by equally high expenses - on average, Americans spend $61,000 a year covering their needs, which constitutes 91% of their income.

The working conditions for the majority of American workers are constantly deteriorating. Since the late 1970s, real wages adjusted for inflation for most workers have either stagnated or declined, despite growth in labor productivity. The average hourly wage in 2017 was $23.15 - $9.95 less than the net productivity indicator. For half of Americans, real purchasing power by 2020 remained at the 1979 level - their standard of living has effectively stagnated.

In addition to this, the federal minimum wage, set at $7.25 per hour since 2009, is not indexed to inflation, eroding the incomes of low-wage workers in the face of rising prices.

Workers also lack equal rights to rest: the USA is the only Western country without a federal law on mandatory paid vacation. In 2023, almost a quarter of private-sector workers did not have access to paid vacation, and 40% of low-wage employees did not even have paid sick leave.

The official U.S. unemployment rate is 3–4%, but the real rate, including underemployed workers and those who have stopped looking for work, reaches 7% (23.8 million people). During crises, unemployment sharply increases to 15–20% (51–68 million people), exposing the extreme instability of the situation for working Americans.

Access to Healthcare
One of the key and long-standing problems for Americans remains healthcare. The U.S. healthcare system vividly demonstrates the existing class inequality. As of 2023, 9.5% of the population lacks health insurance and, consequently, access to basic medical care.

Half of low-wage workers either have no access to insurance or cannot afford it due to high premiums. The average annual cost of health insurance for a family of four in 2023 was $23,968, of which workers paid an average of $6,575. This situation has led to mass debt: 41% of Americans had medical debts in 2023, and 12% owed over $10,000. The very existence of employer-tied insurance limits workers' ability to fight for labor rights: 180 million Americans depend on their employer's insurance, making them vulnerable.

The Housing Issue
The sharp spike in real estate prices observed in the U.S. since the early 2020s has made buying a home unaffordable for most: in 2025, the average cost of housing reached $367,000, which is 40% higher than it was 5 years ago.

The rate for a 30-year fixed mortgage, which an American can take out to purchase a home, fluctuates in the range of 6–7%. A down payment of 10–15% does not make a mortgage affordable. The average apartment costs about 5.5 years of median income, and mortgage interest increases the total sum. At the same time, 91% of income goes to basic needs, and even minimal loan payments become unmanageable without an above-average income. Typically, buyers pay over 35% of their income just for their mortgage.

Besides the high cost of housing, the real estate market is unstable and prone to constant financial machinations, which is well known to many Americans. The mortgage crisis of 2007–2009 led to more than 4.5 million families losing their homes. Since then, mortgage lending policies have not undergone significant changes, meaning a permanent risk of home loss exists for the indebted population.

Access to Education
Workers with low or medium incomes often cannot afford to pay for their children's education themselves. From 1980 to 2020, the cost of college tuition increased by 1200%, against an inflation rate of 236%. The average annual tuition cost at private universities in 2020 was $34,000; at public universities, it was $9,000 for in-state residents.

Many are forced to take out student loans to have a chance at a more or less decent life. But this also increases the stratum of indebted population: in 2025, the total U.S. student debt reached $1.79 trillion, distributed among 45 million people. The average debt per person is $37,338. At the same time, up to 20% of those who took out student loans are systematically unable to repay their debt, which limits their ability to buy a home or start a family.

Stress and Life Satisfaction
As of 2023, over 75% of Americans experienced work-related stress; almost 60% showed signs of burnout. One in five Americans has been diagnosed with depression at some point.

For a long time, the USA held one of the highest positions in the world in the so-called "happiness index." In 2024, the country dropped to 24th place out of 137 - the lowest result for America in the entire history of the index. The lowest life satisfaction is noted among young people.

Political System
As in China, the U.S. political system is subordinated to the interests of a narrow circle of the wealthiest individuals: owners of large transnational corporations, banks, and investment funds.

Officially, the USA is a bourgeois democracy with regular elections, guaranteed freedom of speech, separation of powers, and a multi-party system.

The electoral system is structured so that no party other than the Democratic or Republican is likely to win. Both parties lobby for the interests of big business, banks, and corporations - often the same ones. The differences between them are declarative, and in key areas - economics, foreign policy, corporate support - their course coincides. On issues of the fundamental structure of society, the parties are united: they mask the systemic vices of capitalism by offering cosmetic solutions. Systemically, both represent different wings of big capital and serve to preserve its dominance.

The U.S. electoral system precludes the victory of a candidate outside the two-party oligopoly. Meanwhile, the election campaigns of candidates from both ruling parties are financed by big capital, creating a dependency on oligarchic interests.

The separation of powers is fictitious, as all of them – judicial, executive, and legislative – are controlled by oligarchic clans and their political representatives. Congress and other legislative institutions are also controlled by big capital through lobbying: large corporations like Amazon, Pfizer, and others spend $15-20 million annually promoting their own interests in politics. In total, in 2024, companies and lobbying groups spent $4.4 billion lobbying for their interests in Congress. Politicians and entire organizations are thoroughly bought by the companies and corporations that fund them.

Freedom of the press, which has been praised as the brightest hallmark of American freedom, turns out to be fictitious in practice. Major media are in the hands of financial elites, which completely eliminates press independence. About 90% of the U.S. media market is controlled by six conglomerates: Comcast (owner of NBCUniversal), Disney (ABC, ESPN), Warner Bros. Discovery (CNN), Paramount Global (CBS), Fox Corporation (Fox News), and The New York Times Company. These companies, in turn, are linked to large investment funds like BlackRock and Vanguard.

Oligarchs and large businessmen shape policies beneficial to themselves by controlling media and advertising budgets. For example, after Jeff Bezos acquired The Washington Post in 2013, the publication became noticeably more restrained in its criticism of Amazon and other tech giants. In 2019, when the U.S. Congress discussed antitrust measures against Amazon, Google, and Facebook, The Washington Post published materials promoting a positive image of these companies, their innovations, and their benefits for humanity. Fox News, under the leadership of media mogul Murdoch, consistently promotes a conservative agenda, reflecting the views and interests of its owner.

During the pandemic, major media like CNN and MSNBC actively built a positive image of pharmaceutical giants (key advertising sponsors), such as Pfizer and Moderna, highlighting their role in vaccine development. At the same time, data on the side effects of these vaccines or their price gouging was ignored.

Ultimately, the entire American "democracy," much like the Chinese system, is built by the rich and for the rich. Corporations use the political superstructure to maintain their power. They divide the working class using cultural, racial, and ideological narratives, diverting Americans' attention from economic problems toward "culture wars" (abortion, minority rights, migrants, guns, etc.).

To cement their system, the ruling groups use the principle of "divide and rule": they fragment workers into divided groups and pit them against each other. Targeting white, conservatively inclined workers, the Republican Party promotes an anti-immigrant agenda, promises to bring back the "good old America"; for people of color, minorities, and less affluent workers, the Democratic Party, a "progressive agenda," promises of social reforms and a social-democratic agenda.

This division prevents workers from uniting to fight for their common interests. Instead of class solidarity, they are fed artificially constructed conflicts that only benefit the ruling class.

The established system is guarded by an extensive repressive state apparatus. After the September 11, 2001, terrorist attacks, the so-called "Patriot Act" was adopted in the U.S., granting the FBI, NSA, and other intelligence agencies vast powers for surveillance, wiretapping, and data collection. Under the pretext of fighting terrorism, a virtually total system of population control was created: intelligence agencies have access to all citizens' banking, medical, and internet data. They are aided in population surveillance by the largest IT corporations - Google, Apple, Facebook, etc. This entire system reacts quickly and harshly when the interests of the ruling class are threatened.

In 2013, E. Snowden revealed NSA programs such as PRISM and XKeyscore, showing that the agency collected the contents of emails, browser history, and chats of millions of people worldwide, including Americans, without any warrants or court orders. And in 2024, Congress extended the key provisions of the law, cementing the state's right to warrantless mass data collection. Snowden was forced to flee the U.S. due to persecution.

Thanks to the "Patriot Act," so-called "SWAT-style police" began to be established across America - highly militarized units equipped with hardware decommissioned from military bases, armored vehicles, automatic weapons, and stun grenades. They are used not only against armed criminals but also against protesters, students, and strikers.

In 2020, the American repressive apparatus vividly showed its essence when, after the murder of George Floyd, millions of Americans took to the streets to protest police brutality. The system's response was open terror: police beat demonstrators, shot rubber bullets and launched stun grenades, detained journalists, and destroyed first aid stations. Those protesting "violence" were detained and jailed, while almost no one was held accountable for beatings and killings by the police.

Despite some reforms following the protests, the number of killings by police not only did not decrease but continued to grow. In 2024, American police killed at least 1,365 people - the highest figure ever recorded.

U.S. police also began widely implementing Palantir Gotham and Palantir Foundry systems. Palantir is an American company of major oligarch Alex Karp, specializing in big data analysis, and was founded with CIA involvement. Police use Palantir for so-called "predictive analytics": the program processes vast arrays of data (arrests, social connections, place of residence, even social media likes) and flags those who allegedly "might commit a crime." This data forms the basis for decisions on patrols, searches, and surveillance, although in fact the algorithms simply replicate biased data from the past. Ultimately, this only expands repression against the working class.

The American political system is essentially a dictatorship of capital, operating through a mechanism of constant deception, ideological manipulation, and suppression of any attempts at organized resistance by workers. The differences between the U.S. and Chinese political systems do not negate their fundamental similarity: it is the very same dictatorship of big capital, exploiting wage labor and suppressing the working-class movement. The working population itself in the U.S. suffers from exactly the same problems: poverty, indebtedness, housing inaccessibility, lack of access to healthcare, etc.

4.3. How Propaganda Prepares the Chinese and Americans for war

On both sides of the confrontation, propaganda is actively preparing the population for a possible war. Amid the enormous social and societal problems faced by workers in both China and the United States, this propaganda takes on an extremely aggressive form. In both countries, nationalist sentiments and ideas of reviving past "greatness" are being equally promoted.

Propaganda in China
Chinese propaganda is built around two central narratives: the “great rejuvenation of the Chinese nation” and “one country, two systems.” These slogans, presented as expressions of patriotism and national unity, in reality serve as tools to prepare the masses for military confrontation, distract them from domestic problems, and preserve the power of the oligarchy.

With Xi Jinping’s rise to power in 2012, the idea of the “great rejuvenation of the Chinese nation” became the cornerstone of CPC ideology. It appeals to the trauma of the “century of humiliation” - the period of colonial oppression that ended with the founding of the PRC in 1949. In CPC rhetoric, “rejuvenation” is defined as the restoration of China’s historic strength, prosperity, and respect on the global stage. Behind these propagandistic catchphrases lies a concrete political and military agenda: a massive increase in military spending, the buildup of the naval fleet, active maneuvers in the South China Sea, and preparations for a potential conflict with Taiwan and the United States.

There is, of course, no “rejuvenation” when it comes to prosperity and improved well-being for the Chinese people. The working class, which bears the burden of China’s economy, continues to face low wages, long workweeks, the absence of a guaranteed pension, and the impossibility of purchasing their own housing. Pensions often fail to cover even basic needs, while millions of migrant workers labor without rights or protection. Capitalists – especially those tied to IT, exports, and construction – are the ones who flourish, with their profits growing both from the exploitation of workers and from generous state subsidies.

As for the concept of “one country, two systems,” it was originally devised to disguise the lack of control the PRC had over regions such as Hong Kong, Macau, and Taiwan. Under this framework, these entities were allowed to preserve their own economic and political systems on the condition that they recognized Beijing’s supremacy.

From the very beginning, the concept was intended as a long-term strategy for integrating territories beyond Beijing’s control. Over time, as China grew stronger economically, politically, and militarily, the CPС began pursuing a more aggressive policy toward these regions. The idea of “one country, two systems” gradually shifted toward the formula of “one country, one leadership” – and that leadership, of course, resides in Beijing.

After the mass protests in Hong Kong in 2019-2020 and the adoption of the “National Security Law” in 2020, the region’s autonomy was effectively dismantled. With regard to Taiwan, the CPC has been steadily hardening its rhetoric, accusing the island of separatism and of advancing U.S. interests in the region.

Chinese state propaganda portrays the “reunification” of mainland China with other Chinese territories as a matter of historical inevitability. At the same time, following the Hong Kong scenario, it has become clear that Taiwan will not be offered any genuine autonomy. In reality, what is at stake is forced incorporation into the PRC as an ordinary region.

Chinese propaganda deliberately cultivates the image of an external enemy in the form of the United States. America is blamed for obstructing China’s development, undermining its sovereignty, supporting “anti-China forces” in Hong Kong and Taiwan, as well as imposing technological sanctions, waging a trade war, and militarizing the Asia-Pacific region. The U.S. is portrayed as an imperialist power striving for global dominance, while China presents itself as a peace-loving state advocating for a “just multipolar world.”

The concept of a “multipolar world” holds a special place in Chinese propaganda. Emerging in the 1990s, it began to be used as an instrument of ideological struggle against the United States, exposing America as the sole global hegemon standing in the way of other nations’ development. China promotes ideas of a “just world order,” “equality without the diktat of a single power,” and “unity for the sake of common prosperity.” Targeting the political vulnerability and economic dependence of countries in Asia, Africa, and South America, Chinese propaganda seeks to win them over by promising mutually beneficial cooperation and an alternative to American influence.

In reality, behind the “American hegemony” propagandistic clichés lie China’s own ambitions to take the place of the United States. China uses this narrative to contrast itself with the “selfish” U.S. in the eyes of its population, accusing America of unilateral dominance and wars. Through the media, platforms such as the Shanghai Cooperation Organization, and initiatives like the Belt and Road, China promotes the concept of a multipolar world as an alternative to the American world order, presenting itself as the defender of “developing countries’” interests and a new “center of global influence.”

Finally, Chinese propaganda deliberately fuels militaristic hysteria and sentiments: it popularizes images of a “strong Chinese army” and reinforces “patriotic” feelings.

Through films, TV series, and school textbooks, China glorifies military narratives, such as the Korean War of 1950–1953 or the resistance against the Japanese occupation in the 1930s and 1940s. Some films draw direct parallels with contemporary situations; for example, the 2021 movie The Battle at Lake Chosin shows Chinese soldiers clashing with the American army, attempting to frame the modern struggle as also one between communist liberators and imperialist invaders.

On popular online platforms like Weibo and Douyin, videos featuring military parades and tests of the newest weaponry, such as tanks and fighter jets, are widely circulated. A notable element in stoking militaristic hysteria has been footage of Chinese soldiers participating in the May 9th parade in Moscow this year.

Propaganda portrays China’s militarization as a response to threats from the United States, accusing it of attempting to contain a “rising China.” Media outlets and social networks are filled with clips of military parades and exercises in the South China Sea, where China continues to fortify its artificial islands.

At the same time, China has been intensifying its military rhetoric regarding Taiwan, referring to it as an "inseparable part" of the PRC and threatening the use of force. Between 2022 and 2024, China conducted large-scale military drills simulating a blockade or invasion of the island. In statements of the Ministry of Foreign Affairs official representatives, it is declared that "the Chinese people’s determination to safeguard their national sovereignty and territorial integrity is unwavering" and that "all separatist acts of 'Taiwanese independence' will be crushed by the 1.4-billion-strong Chinese population." These statements explicitly reaffirm that "the Chinese people’s determination to safeguard their national sovereignty and territorial integrity is unwavering."

Continuing its efforts to stoke militaristic sentiments, Chinese propagandists systematically demean the image of the United States and Americans. Anti-American rhetoric permeates all levels of China’s information space – from school textbooks to videos on Douyin – creating a lasting impression among ordinary Chinese citizens that the U.S. is a pathetic, caricatured, and morally corrupt adversary.

In China’s latest history textbook, the section on the Korean War states that "the United States violated borders and bombed Chinese civilians," while China "delivered a decisive response to the aggressor." Passages like these mark the beginning of a long process of "normalizing" the image of the "American invader."

These objective historical facts are torn from their original context of the struggle of socialist forces against capitalism. In the modern narrative, they are intended to identify the American capitalist state with the American people and to form a negative image of any American, regardless of class. Similar processes are taking place in Russia, an ally of China. The Russian government separates the Bolsheviks and the Soviet Union from the Soviet victory in World War II, using it to advance the narrative of the "eternal struggle between the West and Russia".

The Chinese tabloid Global Times churns out a recurring series of illustrations portraying Uncle Sam in all manner of absurd and villainous roles – sometimes "dragging the entire world into his military games," other times lying about efforts to halt the conflict in Ukraine, or undermining the "one China" principle. Popular artist Wuhe Cilin routinely depicts the U.S. as a Trump-like clown on a shattered Statue of Liberty, or as a figure "crowning the world with a new virus," with his posters racking up hundreds of thousands of likes on Weibo. Following the U.S. withdrawal from Afghanistan in 2021, a headline declaring, "The Taliban changed power more smoothly than the U.S. changed its president," amassed over 110 million views in just 24 hours. Hu Xijin, editor of Global Times, personally reposted ironic collages on the topic, amplifying the tabloid’s satirical – and deeply politicized – narrative.

Conspiracy theories targeting the United States have been a constant feature of Chinese discourse. In 2020-2021, Chinese internet platforms were flooded with claims that the U.S. created COVID-19 in the “Fort Detrick” laboratory. A petition demanding that the world be given access to data from this lab garnered 25 million signatures. Chinese academics have even accused the U.S. of secretly deploying climate weapons against China.

The demonization of Americans extends to China’s official circles. For instance, Hua Chunying, spokesperson for the Ministry of Foreign Affairs, published “10 Reasons Why China Will Never Become a Second U.S.” Each illustration addresses issues such as racism, mass shootings, or inequality in America, delivering a clear moral for Chinese readers: aspiring to be like the U.S. is shameful.

In addition, China hosts an entire network of anti-American bloggers who claim to speak “for the people,” while their rhetoric fully mirrors the CPC line. Among the most prominent are:

• Hu Xijin (25 million followers on Weibo); typical narrative: "The U.S. behaves like a dying hegemon… Taiwan independence equals death."
• Jin Canrong (11 million on Douyin, 3.3 million on Weibo); typical narrative: "America is the aggressor in the Pacific," "China could topple Taiwan in 72 hours."
• Zhang Hao (2.2 million on WeChat); typical narrative: "The U.S. dollar is on the verge of collapse," "The Chinese model will prevail without war."

Patriotic films in China openly exploit the theme of “victory over Americans.” In The Battle at Lake Chosin, as well as in another propaganda movie, Wolf Warrior 2, American mercenaries are portrayed as marauders – pathetic and cowardly. The film’s promotional slogan bluntly declares: "Whoever dares to harm China will be destroyed, no matter where they hide."

Ultimately, Chinese propaganda employs every available tool to pump the society with militaristic hysteria and “patriotic” fervor. This propaganda not only directly prepares China’s working class for war against the U.S. and its allies but also distracts them from harsh living conditions and unresolved social problems. By instilling hatred toward the U.S. and Americans, and embedding extreme chauvinism and a grandiose, patriotic frenzy of “defending the nation’s unity and integrity,” Chinese propaganda gradually primes the population to accept the idea that dying in an upcoming war is a necessary sacrifice – without question.

Propaganda in the U.S.
U.S. propaganda leans on familiar narratives, portraying America as a “bulwark of democracy”, a champion of “freedom of speech,” and a defender of “human rights.” This image is actively promoted both domestically and internationally to justify military interventions, meddling in other countries’ politics, and increased defense spending.

When it comes to China, this rhetoric echoes Cold War-era tropes. China is depicted as embodying values diametrically opposed to those of the U.S.: a “totalitarian system,” the dictatorship of the “Communist Party,” the “Red Threat,” digital surveillance, and suppression of individual freedoms. At the same time, the fact that political competition in the U.S. is largely absent, dominated by two bourgeois parties serving the interests of big capital, is turned into a propagandistic tool: in comparison with China, the U.S. is presented as a land of “political freedoms” and opportunity.

Just as in China, American propaganda systematically constructs the image of an external enemy. China is portrayed as an almost “existential threat” to the very existence of the United States.

The 2022 U.S. National Security Strategy labels China as “the most serious threat and systemic challenge,” describing its ambitions in the Indo-Pacific as “aggressive efforts to reshape the region and the international system to align with its interests and authoritarian preferences.” In 2020, former Secretary of State Mike Pompeo called the CPC “the central threat of our time,” accusing it of seeking to dismantle the “free world.” Senator Marsha Blackburn, amid rising tensions over Taiwan, went so far as to depict China as part of a “new global axis of evil.”

American media and politicians propagate narratives portraying the PRC as “engaging in unfair trade”, “stealing technology”, “displacing American workers” and “expanding its military presence in Asia”. Every economic downturn, every factory job loss, is framed not as a consequence of the U.S. capitalist system, but as the machinations of “Chinese communists”.

For example, Trump has repeatedly and directly accused China of “taking advantage of America for years,” “stealing jobs,” and claimed that U.S. economic performance is “less than optimal” due to China’s trade and tariff policies. In 2023, FBI Director Christopher Wray stated that China possesses more extensive cyberattack and cyberespionage capabilities than all its rival countries combined. Even by American political standards, however, his statements were considered excessively alarmist.

These narratives, much like those promoted by the Chinese elite, effectively distract Americans from domestic socio-economic problems. At the same time, they fuel anti-China sentiment, cultivating hostility and disdain toward the PRC within U.S. society.

According to Blackburn, “China’s history is 5,000 years of theft and deceit.” And, in the view of Trump advisor Larry Kudlow, Americans should blame China – not their own president – for the negative consequences of trade wars.

Just as in China, the U.S. has its own network of handpicked “China experts” who profit from anti-China propaganda. The most prominent figures include:

• Gordon Chang – author of The Coming Collapse of China (2001), predicting the “inevitable collapse” of the PRC for over 20 years; frequently appears on Fox and Newsmax.
• Steve Bannon – openly claims that the PRC is waging an “undeclared biological war”; calls the CPC a “demonic cult”; and founded an informal “anti-China alliance.”
• Guo Wengui – co-founded the “New Federal State of China” with Bannon; accuses the PRC of “creating COVID” and “corrupting the West.”
• The Epoch Times / NTD TV – one of the largest sources of anti-China theories, from “biolabs” to claims of China’s “total control over Hollywood.”

A favorite theme of U.S. anti-China propaganda has been hysteria surrounding the COVID-19 pandemic. China was accused of hiding data, “creating the virus,” and deliberately “infecting the world.” Donald Trump was particularly prominent in this sphere, openly promoting the term “Chinese virus,” blaming China for damaging the U.S. economy during the pandemic, and calling on the UN to punish China for “releasing this plague on the world.” According to Kevin McCarthy, a member of the House of Representatives, the high COVID-19 death toll in the U.S. was not the fault of the American healthcare system but of China, which “intentionally cornered the market on protective equipment.”

In its information and propaganda campaign against China, the U.S. actively draws on Cold War-era anti-communism. During that period, America leveraged the narrative of the “Red Threat” to justify widespread suppression of communist movements at home and abroad. U.S. administrations conducted massive anti-communist campaigns, “witch hunts,” political purges, and cultivated a culture of fear around a supposed “communist invasion.”

Today’s anti-China rhetoric in American politics echoes many of these themes. For instance, Mike Pompeo claims that Chinese propagandists operate everywhere – at American press conferences, think tanks, and schools. Bills have been proposed in Congress aimed at preventing “Chinese communist operatives” from obtaining U.S. citizenship. “Communist” China is labeled a “new empire of evil,” a direct echo of Reagan’s 1983 speech, in which he applied the same label to the USSR. The key difference is that the PRC is long integrated into the global capitalist system, and the anti-communist hysteria is built not on the actual structure of China but on myths.

Ultimately, this propaganda and the deliberately fueled hysteria have contributed to a rise in violence against Asian Americans within the U.S. Ethnic Chinese have been perceived by the most reactionary segments of the population as a hidden domestic threat. According to a 2023 study, up to 40% of Asians in the U.S., either personally or through close acquaintances, experienced threats or attacks following the pandemic’s onset. In 2020, 66% of Americans held negative views of China, and 62% saw it as a serious threat – figures that had risen to 77% by 2025.

V. Is There Another Way?

The rivalry between the United States and China is not a “clash of civilizations,” nor a battle between “democracy and dictatorship,” and certainly not a struggle of good versus evil. It is the inevitable collision of the two largest imperialist powers, whose coexistence as equals within a single global market is becoming increasingly impossible. Both the United States and China are leading forces in the modern imperialist system, each striving to maximize the expansion of its spheres of influence, its markets, and the outlets for its capital. In the struggle to redivide the world, the interests of Chinese and American transnational corporations inevitably come into sharp and irreconcilable conflict.

The capital of each side depends on the constant growth of its economy and profit margins – growth made possible through the exploitation of populations, the seizure of resources, control over markets, and investment opportunities around the globe. In such a system, compromise is impossible: under the laws of capitalism, growth is essential for both. But the more they expand, the more, within the limits of the finite global market, they press against each other. The only “solution” open to one side under capitalism is to eliminate its rival – by military means if necessary.

And this – war between the world’s largest imperialist powers – is now becoming ever more likely, and indeed, ever more inevitable. Victory by one of these powers, one of these blocs, is seen by both sides as the only way to resolve the contradictions between them. This is precisely the outcome toward which the governments, politicians, and ruling elites in both the United States and China are driving their peoples.

Yet none of the possible outcomes of such a clash, nor the war itself, would serve the interests of working people in either China or the United States. The working class on both sides of the Pacific would be the first and principal victim. They would bear the full weight of mobilization, combat operations, the militarization of the economy, economic crisis, rising prices, unemployment, and ultimately, the deaths of millions. Even now, the working class is carrying the costs of U.S.-China confrontation; in the event of war, their suffering would multiply many times over.

In reality, workers in the United States and China have no reason to see each other as enemies, to despise one another’s nations, and certainly not to go to war. Their enemies are not “other nations” supposedly standing in the way of their development, but the capitalist class, the holders of political and economic power who set people against each other in the internecine battles of transnational corporations.

Workers in both countries share the same problems, endure the same capitalist oppression, and have no control over their states or their own destinies. Low wages, the dismantling of social protections, inequality, limited access to basic needs, the absence of prospects – these are constant features of life anywhere in the capitalist world. It is no coincidence that in both Shenzhen and Detroit, workers face the same set of problems: exploitation, lack of union protection, and insecurity. Is the shape of one’s eyelids, the color of one’s skin, or the language one speaks really a reason for mutual hatred?

Peace between different groups of people is possible. More than that, it is only through mutual cooperation that they can truly increase their prosperity. But such peace cannot be built on bourgeois nationalism, militarist hysteria, chauvinistic hatred, and rivalry. It can only be built on the basis of class solidarity – on the recognition that the interests of American and Chinese workers are not merely similar, but identical. And they share a common enemy: big capital, which owns their countries and their lives.

Imperialist war is not a historical inevitability; it is the direct result of preserving a capitalist system in which war is both inevitable and profitable for corporations. Only by breaking this system – by replacing the very socioeconomic order – can humanity eliminate the threat of war. Only socialism, founded on a planned economy, public ownership, and genuine workers’ democracy, can remove the contradictions that drive the world toward catastrophe. Socialism is the only practical way out of the vicious cycle of war and exploitation – the only true way forward for the peoples of China, the United States, and the entire world.

To bring about the transition to socialism, the united effort of working people everywhere is essential. The working class of China and the United States, with its immense numbers, productive capacity, and historical experience, is capable of playing a decisive role in this process. Ultimately, only in the hands of American and Chinese workers lies the power to prevent the war that transnational corporations on both sides of the Pacific are preparing to fight with their labor, and to put an end to the exhausting rivalry of capitalist elites.

But to do so, they must recognize their own class interests, break free from nationalist and great-power illusions and prejudices, organize themselves, and bring to the forefront a political force that represents the interests of the labouring majority – a communist party.

The true future of the peoples lies not in the victory of one imperialism over another, but in the defeat of both through the united, international movement of working people. Only in this way can we not merely prevent war, but build a world in which it will no longer be needed, and in which peaceful cooperation among working peoples will be the strongest guarantee of shared prosperity.

We are already engaged in this work – exposing imperialist propaganda, revealing the class nature of the conflict, and helping the working class understand its own interests. Our organization is committed to building a genuine Marxist-Leninist party – an organized political force of the working people. Join us.

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197. The New York Times – ‘Absolutely No Mercy’: Leaked Files Expose How China Organized Mass Detentions of Muslims – November 16, 2019. 
198. Economic Policy Institute – Inequality in annual earnings worsens in 2021 – December 21, 2022.
199. U.S. Census Bureau – Income and Poverty in the United States: 2020 – September 14, 2021.
200. Bureau of Labor Statistics – Consumer Expenditures in 2023 – December 2024.
201. Economic Policy Institute – Identifying the policy levers generating wage suppression and wage inequality – May 13, 2021.
202. Economic Policy Institute – A real agenda for working people – June 2018.
203. Bureau of Labor Statistics – Employment Situatihttps://www.bls.gov/news.release/empsit.nr0.htmon Summary – June 6, 2025.
204. KFF – Key Facts about the Uninsured Population – December 18, 2024.
205. KFF – 2023 Employer Health Benefits Survey – October 18, 2023.
206. Zillow – United States Housing Market – May 31, 2025.
207. DSA USA – A Social and Economic Bill of Rights – December 23, 2012.
208. Visual Capitalist – The Rising Cost of College in U.S. – February 3, 2021.
209. Federal Reserve – Consumer Credit – June 6, 2025.
210. American Psychological Association – 2023 Work in America Survey – March 5, 2023.
211. CDC News – Nearly 1 in 5 Diagnosed Depression – June 26, 2023.
212. OpenSecrets – Federal Lobbying Data – 2025.
213. CNN Business – Washington Post staffers are in open rebellion against Jeff Bezos – February 27, 2025. 
214. AP News – Court records show political pressure behind Fox programming – March 10, 2023.
215. Arxiv.org – Writing about COVID19 vaccines: Emotional profiling unravels how mainstream and alternative press framed AstraZeneca, Pfizer and vaccination campaigns – January 19, 2022. 
216. The Guardian – Edward Snowden NSA files: secret surveillance and our revelations so far – August 21, 2013.
217. The Washington Post – Congress extends controversial warrantless surveillance law for two years – April 20, 2024.
218. Campaign Zero – Mapping Police Violence: 2024 Was the Deadliest Year for Police Violence – February 27, 2025.
219. The Guardian – Palantir: the ‘special ops’ tech giant that wields as much real-world power as Google – July 30, 2017.
220. BBC News – Taiwan military on high alert as Chinese drills encircle the island – October 14, 2024.
221. Consulate of the People's Republic of China in Vladivostok – The next press conference on May 23, 2024 will be held by the official representative of the Ministry of Foreign Affairs of the People's Republic of China Wang Wenbin – May 23, 2024.
222. Global Times – America’s war game – January 30, 2023.
223. Global Times – Clad in hypocrisy – August 14, 2022.
224. Global Times – US’ shameless hypocrisy – August 2, 2022.
225. The New Arab – Chinese social media users mock US, say Taliban takeover 'smoother' than presidential transition – August 16, 2021.
226. BBC – Why is Fort Detrick, the US military base, the center of China's new crown conspiracy theory? – August 24, 2021.
227. Secret China – Jin Canrong issued a document that the US meteorological weapons attack caused flooding in Henan – July 28, 2021.
228. DotDotNews – Hua Chunying gives 10 reasons why China will not become another US – February 22, 2023.
229. U.S. Department of Defense – National Defense Strategy – October 27, 2022.
230. Breaking the News – Pompeo: CCP is central threat of our time – January 18, 2021.
231. Fox News – Marsha Blackburn: China is new axis of evil – April 11, 2021.
232. CNN – Trump: China taking advantage of US for years – April 9, 2018.
233. Economic Times – Will bring back jobs from countries like China, India: Trump – February 22, 2016.
234. Reuters – FBI chief says China has bigger hacking program than competition combined – September 19, 2023.
235. Asian Dawn – Sen. Marsha Blackburn: China has a 5000‑year history of cheating and stealing – December 4, 2020.
236. Daily Caller – Kudlow parries on tariffs: “Don’t blame Trump, blame China” – April 9, 2018.
237. Financial Express – Trump says he built greatest economy interrupted by plague from China – November 3, 2020.
238. The New York Times – Trump Demands U.N. Hold China to Account for Coronavirus Pandemic – September 22, 2020.
239. Fox 11 LA – Rep. Kevin McCarthy: China’s actions directly led to Americans dying – April 25, 2020.