The world is entering a phase of geopolitical transformation, as China accelerates its efforts to challenge U.S. dominance and reshape the global order to its advantage. Mika Hentunen and Kristiina Helenius argue in their BSR Policy Briefing 3/2026 report that the rivalry between China and the United States will shape not only international relations, but also technological development, economic systems and global governance.
From cooperation to confrontation
The report describes a clear shift in U.S.–China relations over recent decades. Where economic interdependence once underpinned the relationship, both sides increasingly see each other as strategic adversaries.
China’s ambitions go well beyond becoming the world’s largest economy. China wants to position itself at the centre of a new global system, influencing the rules, institutions and flows of power. While the United States promotes liberal democratic values, China advances a state-centric model that prioritises control and stability. Rather than exporting its ideology directly, China aims to legitimise its approach globally, particularly in regions where Western influence is weaker.
At the heart of the confrontation lies Taiwan, identified as the most dangerous geopolitical flashpoint. China considers the island a non-negotiable part of its territory, while the United States maintains close ties and security commitments.
China’s expanding toolkit of influence
China’s rise is driven by a comprehensive strategy that blends economic, technological and political tools. These include large-scale investments in infrastructure abroad, efforts to dominate key industries such as green technology and telecommunications, and the use of cyber capabilities and surveillance systems. At the same time, China is deepening ties with countries in the Global South, building economic dependencies that translate into political influence.
The West responds: de-risking and decoupling
The United States and its allies are adjusting their approach. Policies aimed at reducing dependence on China in critical sectors are already underway, alongside growing discussions about partial economic decoupling.
However, the report notes that full disengagement would be extremely difficult in a deeply interconnected global economy.
An uncertain outcome with global consequences
The authors identify five key factors that will determine the balance of power in the coming decades: leadership in advanced technologies, access to critical resources, the global role of the U.S. dollar, influence in the Global South, and progress in the green transition.
The outcome of this competition remains uncertain. What is clear, however, is that the consequences will be far-reaching and will shape the future of global stability.
BSR Policy Briefing 3/2026: The next superpower – China’s plan to reorder the world
