BSR Policy Briefing 3/2026

China has set its sights on becoming the leading nation of the world and to move the system currently operating between nations under China’s sphere of influence. The world order dominated by the United States has felt obvious and permanent up to this point. Now this order is crumbling, and in its place a new arrangement is taking shape, one that is challenging the original power structures. The relationship between China and the U.S. will also determine the character of this century.

The fracture that’s now underway will influence every single person living on this globe through the effects of geopolitics, technology and social systems. This is not only a fight for power: this is also a struggle about values and influence.

In our book we use the American definition, according to which there is just now one, or at most two, superpowers in the world: the United States and China. While writing this book, one of us lived in Beijing, the other in Washington D.C. Our professions are connected to international politics, which helped us to investigate the big picture: We were living in the centre of what was happening in the world. Our home in Beijing was next door to the Chinese Foreign Department; our home in Washington is five blocks from the White House.

We recorded the conversations we had with hundreds of people, our experiences and our discoveries. We attempted to present questions that were simple, but important to answer: Why is Taiwan so important? Is the risk of a world war real? Will China be the next leading power, and will it displace the U.S.?

When we speak of China – and China’s world – we refer to several political apparatuses. And when we speak of Beijing, we mean the Communist Party, the administration and Xi Jinping, the country’s leader. In the single-party system, ‘Beijing’ doesn’t simply lead the country – it also designates the leaders of large concerns and banks as well as the editors-in-chief of the media. On the other hand, the opinions and wishes of Chinese citizens are just as diverse as they are anywhere else.

All of these actors appear in our book in a more or less simplified version so that the text will be more comprehensible to Western readers.

An autocracy is never transparent. The matter of state control is, however, pivotal. State property and support are critical tools of the state, and China won’t let them slip from its grasp.  At the same time as they’re an important explanation for China’s successes thus far, they’re also the largest point of contention with Western nations and they explain the special features of China’s relationship to the outside.

Kristiina Helenius: After a 38-year break, I returned to Beijing in November 2024. The city had changed so much it was no longer recognizable. The hutong areas had disappeared and endless skyscrapers had risen in their place. There were fewer people exercising and fewer bicycles, but thousands more automobiles. Some barbers still plied their trade outdoors, nor had the officials yet been able to make people stop spitting in the streets.

Nobody paid any attention at all this foreigner. Everyone was in a hurry, with their eyes glued to their mobiles. Gucci belt bags and iPhones had taken the place of Mao overalls, and curiosity had shifted to indifference.

The United States and China were on a collision course. My employer didn’t want me to take technological devices with me. ‘The Chinese will find out about everything they want,’ is how an experienced diplomat in Beijing summarized it. Official visits to organisations had to be dropped from my plans. For security reasons, I had to content myself with simply being a spouse and a tourist.

Even as late as the beginning of the 21^st century, it was taken for granted that a delegation of members of Congress from the U.S. would visit Beijing every month. Since 2014, Congress hasn’t made a single trip to China. For a long time, trade remained a point of light in an environment that was becoming tense, but now both countries are protecting their markets fiercely.

For the United States, Russia is like a hurricane; China is like climate change. You can ward off individual crises, but China’s influence is constant and reaches everywhere. I was able to focus my attention on transatlantic relationships for more than forty years as a journalist, as a diplomat, as head of a company and as a consultant. Now the centre of gravity is resting more than ever before on the Far East and the Global South.

The most important state relationship is changing the world, whether we wanted it to or not. It’s no longer a question of whether we can avoid its influence, but rather whether we understand its world-changing significance.

Mika Hentunen: I was a correspondent in Washington D.C. in 2020 when yet another diplomatic skirmish occurred between China and the United States. Donald Trump’s administration changed the classification of five Chinese news media offices to foreign missions and deported 60 of their employees. China responded in kind and deported a group of North American journalists from Beijing.

While working in Beijing as a news correspondent, the leasing agreement for the office I used stated that I was sharing it with journalists from a Canadian media agency. My only company was their furniture, photographic equipment and shelves full of hundreds of cassettes. The journalists hadn’t been allowed back to the city even after five years had passed since those events.

At the beginning of 2025, there were still a couple of dozen American journalists in China. To some extent there were larger numbers of European media representatives, but of these, too, a notable number have moved to other places in Asia.

International reporters documented the blood bath at Tiananmen Square in 1989 by interviewing protestors and describing events on site. Nowadays this would be impossible. Every time I took out my camera, a police officer or a security guard arrived immediately to harass us and to check my press credentials.

The Chinese are careful when they speak with foreign journalists, for the state media have labelled us suspicious actors. Experts on human rights warned us to keep our distance, especially from civilians, so we wouldn’t expose them to charges of espionage.

My work as a journalist wasn’t hindered, but from time to time I was given to understand that I was under constant surveillance. Both frequent visa interviews and intentionally left traces that my flat had been visited told me this was the case.

Building a unique broad security and surveillance machinery is a part of China’s attempt to rise to number one in the world. This development has been astoundingly rapid; not all of Chinese society or its people have been able to keep up with this speed.

Chinese of my age were born under the oppression of the Cultural Revolution and in the midst of a famine. Now they’re more modern than I am. On the other hand, the rice farmers in Zhejiang who tap on their smart phones during their lunch breaks use the same methods for their work that their forefathers did 8,000 years ago.

Nancy Pelosi is a highly regarded American politician who has visited Taiwan during the current millennium. Her visit to the controversial island in August 2022 was a cold-blooded diplomatic move that infuriated Beijing and precipitated the relationship between China and the U.S. into a steeper tailspin than ever before. Pelosi, in her capacity of Speaker of the House, was next in line to the American presidency after the Vice President. From these heights, she was content to announce that the purpose of her trip was to provide unwavering support for the democracy.

More than a year later, Mika went to Taiwan together with a group of international journalists. When they spoke to the Taiwanese minister of foreign affairs at the time, Jaushieh Joseph Wu, he admitted that Pelosi’s visit had created more military tensions between Taiwan and China than ever before. The relationship between China and the U.S. culminates in Taiwan – the island is a nerve cluster where all of the twists and turns between the world’s sole superpower and the candidate for that position are felt in one way or another.

Wu attended the media conference on the advice of his ministry, where their belligerent neighbour’s most recent move was being discussed. Chinese fishing vessels had anchored at the boundaries of Taiwan’s maritime defence zone. On the previous day, destroyers had just nudged the Taiwanese air defence zone before turning back towards mainland China. Taiwan does not possess any sea or air spaces that it can control itself. Only thirteen small countries have officially recognized the island nation, with its population of 23 million; their clout is negligible in international forums that decide over the areas belonging to each of them. In these forums, Taiwan is steamrolled by China, which only considers it one of their provinces, and a rebellious one at that.

‘Taiwan does not provoke or harass,’ Minister Wu told the journalists. ‘We aren’t troublemakers. We stress upon our soldiers that the first shot must not come from our side in the event that we end up warding off or catching invaders.’ Nevertheless, he admitted that keeping a cool head is becoming more difficult all the time. The danger of a clash or a stray shot is real in the Taiwan Strait.

China holds a grudge against the United States that reaches back to the first half of the 20^th century. Its roots lie in China’s two-part, bloody civil war in 1927-1936 and 1946-1950 in which the Communists and China’s national party, the Kuomintang, fought each other for control of the country.  The war ended in victory for Mao and the Communists, and the Kuomintang fled to the island of Taiwan. The United States for its part had supported them during the war, and when the Communists ascended to power and established the People’s Republic of China in 1949, relations between the two countries broke off completely. Americans were not even permitted to visit China, and the United States built alliances with the nations that bordered it.

This break in relations lasted for more than two decades, when in 1971, a remarkable turn took place: the United States and the People’s Republic of China began to approach each other with the help of so-called ping-pong diplomacy. First the American ping-pong team received a surprising invitation to participate in games in China. President Nixon took advantage of this opening and sent his advisor Henry Kissinger on a secret diplomacy trip to Beijing, which quickly led to a state visit and establishment of diplomatic relations between the countries.

Official recognition of this relationship initiated a decades-long era of cooperation. During this period, China and the United States stimulated each other’s economic growth. American businesses and many average citizens as well saw their opportunities for future success as strongly tied to China. Great hopes for profit were tied to this market. When we were living in the suburbs of Washington D.C. at the beginning of the 2000s, Chinese language instruction began as early as elementary school. Multi-faceted interactions between the countries lasted, despite intermittent fierce controversies, until the beginning of the trade war in 2018.

The year 2022 was the point at which China perceived Pelosi’s trip to Taiwan as a deliberate threat. In Beijing, it was well understood that with the help of Pelosi’s trip, the Biden administration was sending the message that the United States was committed to the Western Pacific region. The message was simply wrong for China’s purposes. In response, China organized extensive military exercises around Taiwan and launched ballistic missiles over the island. The superpowers blamed each other for escalating the situation. Pelosi’s visit showed how sensitive to irritation their relationship is – and how Taiwan serves as a mirror for geopolitical tensions.

During her self-initiated visit to Taiwan, Pelosi could well predict China’s reaction, and she stressed that supporting democracy was not only a principle for the United States but also a strategic choice. The brief visit of Pelosi and her delegation led to a new normal, where China’s military presence around Taiwan has increased and harsh remarks by American politicians are everyday fare. The United States is a thorn in China’s side.

At the end of 2024 – or more than two years after Pelosi’s visit and two months before Donald Trump’s inauguration – Xi Jinping presented to President Biden, in polite but strict tones, four ‘red lines’ that the U.S. must not cross. These lines relate to China’s endeavour to control both its own borders as well as global use of force.

At the top of the list was Taiwan. According to Beijing, the country, which has existed as an autonomous area and market economy since 1949, is part of China, and no other countries have any say there. There is only one China. An independent Taiwan is not mentioned in mainland China at all – not in news media nor in history books. Any comments that refer to it disappear quickly from social media.

The one-China policy is also a cornerstone of official foreign policy for the United States. Washington recognizes Beijing as the only legal government in China, but at the same time it stays in active contact with Taiwan’s capital, as Pelosi’s visit showed. In Taipei, the U.S. has an ‘America centre’ handling economic and cultural matters, corresponding in practice to an embassy. Situated on the outskirts of the city, the colossus employs 600 people, and in terms of its architecture, it resembles larger American embassy buildings. For the sake of comparison, the EU has a delegation in Taiwan, located in a high-rise building in the centre of Taipei and employing seven people.

Beijing does not speak of a one-China policy in the way the U.S. does, but rather of the one-China principle. This choice of words hints at why Taiwan is such a central sore point for China: the principle does not conform to the policy. It contains an ethical and moral dimension which it is a crime to violate. In Beijing’s eyes, the United States is piling crime upon crime by maintaining its warm relationship to Taiwan.

The second red line and a great source of irritation for China is reminders of human rights and democracy, something the United States makes a part of discussions in all of the encounters between the two countries. China is on a completely different line than Western countries regarding the freedoms its people are entitled to: It violently suppresses ethnic minorities such as its Uyghur communities, and it also limits all of its citizens’ freedoms of speech and assembly with a firm hand. When the United States scolds China about it, the latter likes to point to their success in raising hundreds of millions of people from poverty at the same time as it has guaranteed its enormous population stable social conditions.

Beijing considers this mentioning of human rights and democracy to be interference in the country’s internal affairs. In addition, it considers the American demands hypocritical since the country itself is suffering vast social problems. Commenting on China’s internal affairs crosses Xi’s third red line, which warns the U.S. against involving itself in China’s political system. In fact, China itself publishes an annual report that looks at the deficiencies in American human rights, primarily for its own people and its partner countries. With this report, China aims to deflect criticism from its own crimes to the U.S. instead. Reports from recent years rebuke the country for the cleavage of its society into two political and social camps where only the most wealthy are able to enjoy full rights. Making repeated appearances are also armed violence, in particular mass shootings, and the high number of people suffering jail sentences, which is why China calls the U.S. a ‘prison nation’. In its reports, China calls the blatant election campaign advertising in the U.S., and, for example, the messy election of the Speaker of the House in 2023, election manipulation. China also tries to divert attention from its own heavy surveillance machinery by emphasizing that the police force’s responsibilities can also include monitoring the American people.

The fourth demand that Xi presented to U.S. leadership is China’s right to free development without the interference of others. In China’s view, the U.S. is continually taking actions that have an effect on China’s economic development and its international range of motion. Rising to the top of China’s list of pet peeves are sanctions and export restrictions that hit high tech and the defence industry in particular. Their number has increased quickly at the same time as the relationship between the two countries has weakened. China’s characteristic takeover techniques of overproduction and undercutting prices have made the United States send severe warnings, which in turn have angered the Beijing establishment.

The third area in which China believes the U.S. is preventing its development is talk about risk reduction. For several years, the U.S. has tried to shed its dependence on China’s ability to cripple either its manufacturing or its social sector. The American strategy of identifying its overdependency and getting rid of it is to China’s way of thinking, however, an aggressive torpedoing of its development.

This kind of sharpening of deal-breaker issues between the two is nothing new in the relationship between China and the United States. However, for China, the issue has never been under the purview of the autocratic General Secretary of the Communist Party, President Xi Jinping, but rather some diplomat or minister. The reprimands given from the highest possible level were seen in Washington as confirmation of Xi’s iron grip in Beijing. At the same time, Washington interpreted them as a signal of the direction in which China intends to develop in the next few years. Why else would China have used such a highly placed messenger? The outcome was also a clear warning to the next administration of the United States.

Xi Jinping is serious about raising China to the position of the world’s leading power by the year 2049. By then, the People’s Republic of China will be one hundred years old. In Xi’s speeches, global changes – the rapid rise of developing nations, technological development and new patterns of global government – support the growth of China at the same time as decline awaits the U.S. and other Western nations.

How China’s leadership understands historic changes has deepened thanks to recent, large international events. A notable watershed was the financial crisis of 2008. At that time, China’s economy and its financial system were still so different from the Western banking system that they didn’t suffer from the Western crash, but simply continued steadily forward.

For China’s leadership, watching the way the United States acted at that time was eye-opening. At the beginning of the 2000s, the United States deregulated financing and both dismantled the barriers between different financial services and made it possible to provide high-risk loans for real estate and households. To Beijing, this even looked self-destructive and it emphasized the contrasts between the countries’ economic systems even more than before. The irony is that the Chinese real estate sector crashed in the 2020s as well when the state finally began to clamp down on wild debt and speculation in its own market and on poorly targeted investments. To be sure, the root causes of the crises were more diverse than those in the U.S.

From a Chinese perspective, the Brexit vote in the United Kingdom in 2016 and Donald Trump’s election to the presidency of the United States three months later were just as shocking. They made the Western countries look noticeably more vulnerable and gave China much more information about how to influence the West. China and other countries in opposition to the West have begun to consider causing internal strife to be one of its strongest methods of influence.

In Beijing’s opinion, the U.K.’s exit from the EU showed that the Western countries themselves don’t even trust their own organizations, and that when push comes to shove, the pressure of internal politics overrules international commitments and partnerships. After he took office, President Trump in turn pulled the United States out of free-trade agreements with countries both across the Pacific and the Atlantic, where negotiations were already in the final stages. In addition, he withdrew the U.S. from the Paris Climate Agreement and several other multilateral projects, and he used harsh language against NATO allies, among others.

The withdrawals appeared to be a deterioration of the liberal international system, something that both astonished and delighted Beijing. And more good news was on the way for China: First the pandemic caused polarisation in the United States, and then came the attack on the American Congress by Trump supporters in January 2021. These events also confirmed China’s belief that waiting is to its benefit: The West seemed to be doing a fine job of weakening itself without much help from the outside. Xi Jinping also declared after these events that the U.S. would only be wiser when it adopted the ‘correct view of history’, meaning the inevitable crumbling of the West.

Xi Jinping’s government not only desires a place in history, but is striving to set the rules of the game for the future. In Xi’s opinion, it would be a good idea for the U.S. to cease resisting the rise of China and to gradually withdraw from the East Asian and Western Pacific regions instead of defending their interests there militarily or economically. Xi considers this kind of geopolitical and geostrategic shift to be just one step that could decrease tensions between the two great powers while at the same time balancing global power in China’s favour.

On the other hand, from the point of view of the United States, just the idea of voluntarily placing global power in the hands of the Party leader of a communist country is utterly insane, no matter how clear the motivations may be. The U.S. doesn’t see any alternative to its presence in the Pacific. It is unequivocally of the opinion that the rules of the world order are not up for discussion, and China in particular is certainly not going to be able to rewrite them. And rolling its eyes, Washington adds that China’s leader also talks over issues often and happily with his ‘best friend’ Vladimir Putin, as Xi has publicly acknowledged.

This kind of shift would accomplish Xi’s vision of China’s central position in the international system. He wrote about this extensively in his compilation A Global Society of Shared Future (人类命运共同体), which appeared in 2018. In this work, he called into question the universal values determined by Western countries and presented his alternative for establishing a rules-based international order. Challenging and interfering in the Western structure is China’s most important method for influencing the predominant international system.

China itself believes that its ascent – or return – to the top of the world has been occurring modestly for a long time. But as it gains speed, China’s belief in itself has strengthened. The pursuit of its goals is no longer covert. As long as he has been in office, Xi Jinping has directed resources to the kinds of projects that reshape the international order and strengthen China’s economic, military and global position. This has often happened at the expense of such needs as environmental protection and social welfare.

The mutual dependency of two economic giants has shifted over the years, first into competition and then into opposition. The stakes have only increased. China has established its position as a factory and labour repository for the world by satisfying the demands of its customer nations more quickly and cheaply than these nations themselves were able. At the same time, it took advantage of the opportunity to learn and progress. All of this has happened under the approving eyes of Western countries. For the United States, it was advantageous to outsource its labour-intensive industries to China for a long time, and it took a good while before it noticed it was jealous of China despite its accumulated know-how and its edge in wind and solar energy, for example. China had taken advantage of the opportunity while the U.S. was still focusing on fossil fuels.

In accumulating know-how for its labour force, China willingly accepted increasingly demanding commissions from other countries, and the country’s middle class grew quickly as the standard of living rose. Since the 2010s, China has shifted to developing the technology it has both for its own use and for exporting it to the world instead of building technology solely on the basis of other country’s orders and instructions.

China expert Eric Olander, founder of the China Global South Project, says that the West had not prepared for this ascent. ‘I keep hearing complaints that the leaders of the wealthier industrial nations don’t understand China’s new approach.’ According to Olander, this applies to both American and European decision-makers. ‘For Europe, too, it’s been a surprise to encounter a China which is much more developed, aggressive and powerful than the country they previously did business with. They don’t have current knowledge nor the skill to meet the challenge of China,’ Olander reflected during our meeting.

The approaches China utilized through the years to take advantage of other countries in benefitting its own growth were cold-blooded, if not unique. At the beginning of its process of opening up, the country encouraged foreign companies to form cooperative businesses with the Chinese under the pretext that it would make the adaptation of their workers to new conditions easier. The agreements stipulated almost without exception the transfer of technology and know-how to Chinese partners. This practice helped China to easily gain control of the patents and licenses of other countries until at the beginning of the 1990s, the world began gradually to discover China’s systematic industrial espionage.

China’s membership in the global trade organization WTO made it possible for the country to expand direct investments in foreign properties on a broader scale than ever before. This brought a lot of money and know-how into the country. In increased interactions, the first problems also began to raise their heads, although the mutual benefits of cooperation still weighed more heavily than the disadvantages many times over.

Economic growth, particularly in China’s southern provinces, was furious, and it was an ego boost for Beijing. On the other hand, the Americans began to feel that they were not only being copied, but that they were also being treated haughtily and dishonestly. As American grumbling about copyrights and dishonest business practices grew louder, China never made any gesture in response, but simply allowed the relationship between the two countries to deteriorate. In retrospect, this worked to its own disadvantage.

After China’s entry into the pull of the global economy, Chinese companies began to infiltrate all over the world. This is how front companies operate, who internally practiced completely different trades than what they officially announced, as well as shell companies, located in tax-shelter havens, managing large transactions. They’ve been repeatedly caught committing industrial espionage. According to the American federal police, the FBI, the incidence of industrial espionage has increased 1300% during the past decade, and a new case involving Chinese industrial espionage is opened on average every tenth hour. China benefitted from academic cooperation and research projects as well by attracting important expertise from abroad. Copyright infringements committed by China, according to the U.S. Department of Commerce, cost 225-600 billion euros per year, depending on the method of calculation.

Digitalization brought about unforeseen opportunities and new threats to international security and economic balance. The Internet age offered the Communist Party additional methods of influencing actors in foreign countries, by hacking and cybersurveillance, and China’s state-run innovation activities began to produce their own large companies in this area. The most important of these was Huawei and the entire technological ecosystem around it. The Chinese state’s strong hold was a cause for concern for its trade partners from the beginning; it was feared the country could use technology for espionage and military purposes, something that involved serious security risks.

Manipulation of currency and the markets were also central and controversial tools in China’s strategy. In recent years the country has utilized dumping of state-supported steel, solar panels and electronics to break into international markets and to displace competitors. This dumping has weakened China’s reputation more than ever, but its enormous internal markets and lower production costs have nonetheless constituted an irresistible attraction for foreign businesses despite this.

At the same time, China’s self-image was strengthened by the weakening of the EU and Trump’s preference for working directly with the heads of state at the expense of international organizations. These also marked a turn in the relationship between China and the U.S. in a more negative direction. In 2017, the U.S. adopted a completely new strategy towards China. It stipulates that China is no longer to be handled tactically, one subject and situation at a time, but rather the U.S. has an all-encompassing approach which covers all policy areas. It treats China as a threat to the American political system and to its security.

With the arrival of the 2020s, Washington has further tightened this strategy in accordance with its approach to China, and it still sees China as an adversary, precisely as its strategy dictates. During the blossoming years of relations, Americans certainly got to enjoy an endless amount of products at ridiculously low prices, and the wide cooperation between companies benefitted both parties. In current discussions, however, this partnership has been forgotten. The shelves of book stores in Washington feature works which highlight the Chinese threat. The greater part of speeches deal with how China attempts to exploit the weaknesses of U.S. national security, and American legislation has begun to change accordingly at an astonishing speed.

There are reasons for distrust. One example is the massive telecommunications hacking operation carried out by China called ‘Salt Typhoon’. The large attack, discovered at the end of 2024, is one of the most significant intelligence crimes in the history of the United States, nor did the old-fashioned American telephone network system make the break-in very difficult. With the aid of this operation, Beijing has been able to listen in on phone customers’ calls and to read their text messages for years.

Chinese officials are constantly warning the United States of consequences if it crosses the lines set by China. At the same time, criticism voiced by Chinese diplomats against the U.S. has become harsher. Qin Gang, former Chinese ambassador to the U.S. and later minister of foreign affairs, often emphasized China’s endeavour to change the world order more to its liking and urged the U.S. to accept China’s central role as a world power.

However, Qin Gang’s voice has fallen silent; his brief term as minister of foreign affairs ended in his mysterious disappearance in June 2023. The approach of Xi’s government is seen in the fact that even in the inner circles of the Communist Party, disappearances are becoming more common than before. No official explanation has been provided for Qin Gang’s marginalization, but American sources report on rumours that he is supposed to have endangered national security, and of scandals in his private life that have to do with an illegitimate child, among other things. Information was leaked from an unknown source to foreign media working in Beijing about Qin’s secret relationship with a well-known TV reporter.

Qin Gang was also considered to have reacted too slowly to a comment from Biden in which the president gave a positive answer to the question, posed in a briefing, of whether he felt Xi Jinping was a dictator. The Chinese Ministry of Foreign Affairs sent a diplomatic missive to Washington about the event on the following day, but apparently the minister of foreign affairs should have raised a cry about it immediately. Qin was not the only one who was fired that summer. Just over a month after him, Defence Minister Li Shangfu disappeared from public view. Both of them were placed under house arrest and an investigation for corruption, and they were removed from office and later from the Communist Party as well.

On a global scale, the development of the relationship between the United States and China is a measure of stability that has become ever more important – and possibly its greatest threat. The amount of distrust in American-Chinese relations has grown to alarming proportions and the tone of their communications is, as a rule, hostile. It is certainly true that the red lines Beijing has drawn will be crossed in the future as well. The United States has no intention of respecting them.

Economic crimes and diplomatic discontinuity, however, are not the most important reasons for the dramatic change in policy of the United States. The greatest reason is the change in China’s position.  The identification of this country as a challenger to the system is a fundamental shift which at the same time is an indirect acknowledgement of China’s economic and military successes. A question related to this as well is which of the superpowers will be able to determine the next steps in global development? Or will the growth of artificial intelligence and the strengthening power of the technology giants lead to the leadership of the world engaging in a destructive superpower struggle, resulting in an essentially super-national digital government? Will the international community be forced to choose sides, or can it succeed in balancing between the superpowers in the midst of the artificial intelligence revolution?

China’s dramatic metamorphosis from a developing country to an economic and military power has made it a challenger to the system for the United States during the 2020s. This new position has initiated a competition between China and the United States, and the final outcome will determine whether one of them will become the next global hegemon.

At this very moment, the countries are preparing for economic, military and technological domination. The effects of this confrontation could reach far into the future. The 2030s will in all probability change the geopolitical landscape in a way that will deeply influence international relations, economy and security.

The closest comparison can be seen in the decades-long tensions between the United States and the Soviet Union, something that divided the world into two competing camps. However, the current situation is not leading to the kind of bifurcation seen after the Cold War, because China is making its ascent in a multi-nodal system shaped by globalization and interdependency. An abrupt and unambiguous division into two parts would be practically impossible to bring about under these circumstances.

Following the internal discussions in both China and the United States – not to mention the arguments between them – tells a lot about what kinds of development processes a tightening competitive situation generates. As part of its system competition, the United States has begun fierce implementation of a risk-dismantling (de-risking) process. Its goal is to eliminate situations in which China could get into American systems through the help of some network connection or where China can cripple American supply chains and society by cutting off a delivery route. The second, and more dramatic, pattern is so-called de-coupling, by which all possible cooperation between the countries is interrupted or at least reduced to as low a level as possible. In a networked world, complete disengagement would be incredibly difficult, and even an attempt to achieve it may be senseless.

In the United States, it is generally believed that American businesses can still produce many kinds of goods and services for Chinese markets without endangering America’s national security as long as its risk-taking capacity can bear it. In many cases these businesses would be damaging their own commercial interests by withdrawing from China completely.

However, the shift from de-risking and a near complete interruption of co-operation is looking more likely all the time. This is how poorly things are now going between China and the United States. The most critical reasons are China’s surveillance laws and exit bans, the American sanctions, and mutual military threats. A recent example of a de-coupling situation is Russia’s separation from the West, as far as possible, which is felt in a very tangible way in the eastern regions of Finland.

One of the largest issues is the future of the Internet and the possibility of a so-called splinternet. Is China developing a technologically proprietary Internet which could end up in two or more fully separated ecosystems? There are no signs of the emergence of this kind of splinternet, at least not yet. Before globalization, different parts of the country used different electric outlets and circuitry, which still makes people travel with an adaptor in their luggage. In terms of the Internet, on the other hand, China utilizes the same basic technology and protocols as the global Internet, but at the same time it limits and censors content by means of a so-called large firewall. In this way it strives to benefit from the global Internet at the same time as it maintains tight internal controls.

The Internet is an important example, but only one, of how China’s point of departure in challenging the West is completely different in a post-global world than previously. China is building its world on a foundation that in many aspects is already established: According to its own interests, it utilizes an international system, a dollar economy, and cutting-edge technology created under the leadership of the United States after World War II.

The United States established its position as a global leader at the end of the 19^th century and the beginning of the 20^th. Initially, it was itself a colony, but it benefitted from the time of colonial power and imperialism as well as from the weakening of Europe in the aftermath of the world wars. After the fall of the Soviet Union, it emerged as the sole superpower. The United States has maintained a liberal world order and borne the lion’s share of the risks, responsibility and costs of doing so: It has attempted to ensure global stability by heading a world-wide network of military bases and acting as the biggest financial backer and guarantor in many international organizations. President Trump’s administrations have levelled strong criticism at this arrangement.

As for China, it has a habit of choosing to act where there is the most room for influence, nor has it been willing, at least thus far, to engage in bloody battles over roles that are already established and being maintained. It is interested in new conquests, in particular rising technologies and new organizations through which it is possible to get the inside track and elbow its way directly to the top.

The timing of China’s ascent and the timing of its challenge also have an effect on how China’s world may take shape. It has the opportunity to build its hegemony from its own point of departure and at the same time take advantage of the current international system. An important factor in the birth of the global order led by the United States and its commitment to its allies was the so-called Marshall Plan. This aid, which was given to western European countries after World War II, accelerated the rebuilding of Europe and ensured that it would remain within the market economy and the liberal system. Whereas the United States has emphasized market capitalism and free trade for decades, China is aspiring to create a world order focusing on Beijing. It is presenting its own model of government as a global standard, in particular in those organizations where the influence of Western countries is negligible and in which China has a dominant position.

Unlike the Soviet Union, which pursues its goals with open and often clumsy struggles, China uses its influence to achieve strategies that look more peaceful, such as partnerships, investments and cybersecurity-related methods. Its guiding star is maximization of control and power in ways other than through military invasions if at all possible. Although regional objectives such as Taiwan or similar disputed islands are clearly in mind, China’s main emphasis is on the utilization of technological strength and the creation of economic dependencies.

For a long time, the Western world believed that the acceleration of globalization by means of technology during the 1990s influenced a long process in which the rest of the world would adopt ever more Western characteristics. It was believed that the market economy, privatization, the principle of the rule of law, human rights and democratic norms would ineluctably spread on a universal front.

Notably, the United States has seen itself as the defender of universal values since World War II. It believes that the world would be a better place if other nations would adopt the American value system. A quote from Hillary Clinton during her campaign for the presidency shows this typical American viewpoint:

When we say America is exceptional… we recognize America’s unique and unparalleled ability to be a force for peace and progress, a champion for freedom and opportunity. Our power comes with a responsibility to lead, humbly, thoughtfully, and with a fierce commitment to our values.

Beijing has a different mindset: a nation’s task is not to offer its most basic values to other nations or to defend them outside the area of one’s own country. Although China is pursuing a leadership ‘that belongs to it historically’, its goal is not to make the whole world Chinese. They think that it is only Chinese people who can be Chinese in terms of beliefs and culture. Beijing believes more in coercion and control as well than in converting the people. However, this is a different matter than the spreading of camera surveillance systems, news or popular culture. China foists these systematically on other countries and hopes that its own influence will grow as a result.

On the other hand, as Clinton and many other American leaders have stated, if the United States allows a power vacuum to arise anywhere at all in the world, it would be a failure. In such a case, enemy nations or networks would move in to fill those vacuums and thus cause chaos and damage to the United States as well. This is why the U.S. has to be in such places, preferably ahead of time, or in any event no later than the point at which a crisis arises.

As a result of China’s intensifying oppositional position, questions relating to it are driving Washington policies even more strongly, particularly in the allotment of resources between various security threats. This has an impact in particular on decisions about where resources will be targeted between various security risks. In fact the United States withdrew its troops from Afghanistan in 2021 in order to increase its mobility, and after the Russian attack on Ukraine, furious discussions had to be held about whether supporting Ukraine was simply a resource drain or in fact a form of opposition to China. At the end of February 2025, Ukraine’s President Volodymyr Zelenskyy visited the White House, a visit that ended in a raging dispute with Trump and Vice President J.D. Vance in front of the television cameras. Afterwards it looked for moment as though the United States would lean towards continuing to support Ukraine as a mere line-item expenditure instead of as part of a larger China strategy.

Cultural differences guide the way China and the United States approach their relationship to militarism. In the United States, ‘a man in uniform’ is valued. This means that peace is ensured through force if needed, and losing one’s life in the service of the armed forces is seen as a noble sacrifice. In China, on the other hand, learnedness is traditionally appreciated more than military skill, and the ideal is to unite education and military ability. This is shown in the concept of wén wǔ shuāng quán (文武双全), which means a person who is competent in both areas.

The founder and president of the Information Technology and Innovation Foundation located in Washington, Robert Atkinson, describes how China and the United States both have strengths and weaknesses rooted in their own traditions. In the U.S., ingenuity shines, in particular in science, and the country has a strong business ecosystem for cultivating start-ups quickly. However, international comparisons show that it is not as successful as China in manufacturing, long-term risk taking and the maintaining of technical innovations, because the system and the four-quarter thinking familiar from the stock market do not favour long horizons and resilience.

China’s system, often underestimated, is more entrepreneurial, even more than Japan’s, and it’s able to take significant risks. What probably also influences this besides the state-centred nature of China is the ideal of slow and gradually maturing ascendancy featured in the Chinese moral philosophy of Confucianism.

The United States has used its world-wide network of military bases for conflicts beyond its borders, whereas China has primarily been involved in wars of defence for the past 2000 years. China’s military has essentially avoided initiating attacks, but its new global role may lead to a reassessment of that philosophy. For example, the South China Sea offers a picture of the current strategy, where China is taking over islands and challenging neighbouring countries. The U.S. is preparing for the possibility that China will move on to seize larger areas.

The strategic approaches of different cultures also reflect their patterns of geopolitical action. The former American Secretary of State Henry Kissinger described how China’s strategy is governed by its ancient game of wei qi (Go), whereas America’s action can be compared to the Western game of chess. The Singaporean diplomat Kishore Mahbubani confirms this view: In chess, one attempts to capture the king quickly, but in wei qi, the goal is to slowly and patiently isolate and conquer the opponent by means of a long-term strategy.

When the wei-qi strategy and the power politics played on a chess board collide, the rules of the global playing field will inevitably change. China’s world is already taking shape, and its direction and its power will soon be at a critical juncture.

The United States radically changed its China policy as soon as President Donald Trump’s first term began. Tracing the new strategy leads to a man named Yu ‘Miles’ Maochun. Born in China and already past 60, Yu moved to the United States as a student. Since then he has accumulated a whole slew of prestigious titles: he is professor of military history and modern China at the U.S. Naval Academy, director of the China Center at the Hudson Institute, director of the Project 2049 Institute and a visiting researcher at the Hoover Institute. Miles Yu’s native language is Mandarin Chinese and he knows the structure of the Communist Party and the logic of its workings thoroughly.

Above all, however, Miles Yu is one of the most important strategists of American policies with respect to China. In 2017, after Trump ascended to power, he received a phone call from the White House in which he was invited to be Foreign Minister Mike Pompeo’s sidekick in determining and implementing a large change in direction for America. He says that during the Trump administration, he had an enormous assignment but also a lot of room to manoeuvre. The most important question we wanted to ask Miles Yu is this: What is China really intending to do?

Yu’s answer booms out forcefully and loudly: ‘China’s strategic goal is to destroy the United States and take over its global leadership. This goal penetrates China’s politics no matter what kind of administration has the power in the White House,’ he says, continuing: ‘China is attempting to weaken the U.S. role as a global hegemon, defender of democracy and head of NATO and other democratic alliances.’

Yu says that China understands that destroying the United States is the only road to becoming a superpower. ‘The appeal of the United States is a serious threat to the Chinese government,’ Yu explains. ‘China has tried for decades to demonize the U.S. by presenting it as a corrupt imperialist society. Despite this, many Chinese people still admire America and want to move there.’

Yu himself is a splendid example of America’s appeal. When we ask why he wanted to become a U.S. citizen, he says he feels his decision was obvious: ‘This is like asking me why I breathe.’

Although China’s goal is clear, what its future would look like is not explained in detail in any official documents or speeches by China’s leaders. However, one can get some idea from the ceremoniously presented five-year plans of the Party as well as national invigoration and other images of the Chinese dream which Xi and his diplomats constantly keep in the public eye. They are something like puzzle pieces which, when put together, reveal a more all-encompassing picture. These pieces form a so-called overall strategy, and with its help we can see how the different sectors together are moving China towards its goal: dominion over the world and the displacement of the United States.

China’s overall strategy is both ideological and practical. It functions as the basic coordinating principle for all state activities, directs the country’s political development and strengthens Xi’s leadership. Although the nuances of the strategy may remain unclear to foreigners, its policies are anchored strongly in the classic combination of control and power, or factors familiar in the history of the human race.

Although Xi Jinping is just as mortal as anyone else, his autocratic way of leading has a decisive effect on China’s direction. He has concentrated his power in himself in an unprecedented way and uses it to manage and control China’s development. His personality also mainly explains China’s purposes and approaches as well as its Marxist-Leninist ideology. Everything follows his wishes: innovations in the Army, economic policy positions and foreign policy goals are set forth and written into the Party’s five-year plans according to them. This makes China’s direction more coherent and long-term than the policies in superpower democracies, in which changing administrations can also mean large differences in emphasis.

According to its strategic documents, China is pursuing a status as the leader of world hegemony in two ways: by weakening the United States and by strengthening its own power. Miles Yu believes that China’s greatest fear is that the Chinese people will adopt the ideals and values defended by the United States and the democratic world. ‘This is also the reason why China’s Communist Party considers the instability of America’s domestic politics as its greatest opportunity to erode the U.S. position,’ he says.

Above all, China uses economic means to oppose the influence of the United States. It is diversifying its own trade relations and strengthening its domestic industry, particularly in the areas of semi-conductors and green energy. China wants to make as many countries as possible dependent on its advanced industries and to replace them as suppliers of resources. This reflects the model of economic dependence known from history and colonial economics.

China also has a goal of decreasing its dependency on the United States as it builds its own global position. It takes an aggressive stance with respect to American attempts at the same kind of detachment from its side. It would be in China’s interest to do the opposite – to increase those dependencies that could make the United States vulnerable.

In terms of diplomacy, China avoids participating in conflicts led by the U.S., but at the same time it is strengthening its position with respect to other countries such as Russia. It also invests heavily in Africa and other developing markets, which weakens the effect of American sanctions and alliances. In terms of its military, China aims to prevent American influence from expanding in its vicinity by modernizing its missile systems and developing its ability to ward off military interventions. China’s cyberattacks and interference in the elections of other countries have been seen to occur repeatedly, but strategic documents about such attacks cannot be found.

Building up local power is the second central part of its strategy. China’s interim objective is to attain a dominant position in Asia. It is using its massive Belt and Road Initiative to this end – a programme it has already committed to in dozens of countries in Asia, Africa and Latin America. This infrastructure and investment project creates economic dependencies between the participating nations and China, which gives the latter influence over the politics of the former. China is also militarizing the South China Sea by building artificial islands and defending them militarily. This strengthens its position as the sovereign power over important shipping routes.

China also avails itself of trade agreements for its own benefit such as the Regional Comprehensive Economic Partnership, or the RCEP agreement. This group includes fifteen participating countries from Asia and the Pacific region, which represent one-third of both the world’s population and the combined gross national product of all countries. To be sure, the group includes Western-minded nations such as Australia and New Zealand, but the agreement nonetheless shuts the United States out and strengthen China’s role as the economic centre of Asia.

The significance of the RCEP began to grow at the beginning of President Donald Trump’s first term of office in 2017: at that time, Trump namely withdrew the United States from the existing Pacific Free Trade Agreement and left the countries to develop trade relationships with the assistance of the RCEP. As a model, China is using the history of Great Britain, which expanded its presence by sea all over the world and thus prospered powerfully.

This strategy of exclusion also extends to the areas of monetary policy and technology. China wants to weaken the dollar’s dominant position and to promote the use of its own currency, the yuan, for international trade. At the same time, it is investing strongly in developing technologies such as artificial intelligence, quantum computing and 5G technologies. Through their help, China is building dependence on itself, particularly amongst countries of the Global South.

China’s strategy is not only limited to finance and technology, however. There is also a struggle in the area of values. The broader goal of the Communist Party is to strengthen the approval and even desirability of authoritarian values as well as to challenge the Western countries’ understanding of democracy and human rights. This is seen in how China exports surveillance technology to developing countries, for example. Additionally, in international forums, it actively promotes so-called cyber-sovereignty, or the rights of national governments to a protected digital space within their own borders. In this way it promotes its own control-centred model of governance and attempts to legitimize it on a global scale.

Explaining and parsing China’s overall strategy has required enormous amounts of work for researchers. Information about the country’s policies is not as readily available as it is in Western countries. But beginning in the 1980s, China has gradually opened up part of its archives to both domestic and foreign researchers. According to the 1988 archive law and the measure implementing it, the security classification on materials was removed and foreign researchers received conditional access to source materials 30 years after they had become archived. Mitigating measures have been granted for rules on materials related to the economy and culture in particular.

For years, many Chinese and foreign researchers have also gone through and interpreted the Communist Party’s archives, the contents of its 14 five-year plans and supporting documents as well as the libraries of different institutions. As a result of this, a large part of the materials can now be read from digital sources. To be sure, the Chinese government still carefully controls the availability of certain sensitive documents and during Xi’s term, it has once again become more difficult to access sources.

Archival findings also bear witness to the direction in which China’s overall strategy is taking in its aim to change the current world order according to its own goals. This inevitably causes ideological opposition, or competition for appeal, in which China’s focused authoritarianism and the liberal democracy set forth in America’s Constitution each try to gain the advantage over the other. The final result of this confrontation may be a division of the world into two or more different spheres of influence, or the clear dominance of one power.

The final result is a significant issue. It is important for the world’s citizens to reflect on what price this new world order may demand. Its effects will spread not only to the future of the superpowers, but also to our individual lives and the future of the entire human race.

We ended up basing our research work on five indicators while following the competition between China and the United States. There can be more measures, but these five points are a direct reflection of which country has the upper hand in this critical contest.

1. Who has control of leading technologies and know-how?
2. Who has strategical resources, in particular rare metals?
3. How is the position of the dollar as a reserve currency developing?
4. To whom is the Global South listening?
5. How is the green transition progressing, or who is opening the door to the future?

BONUS: Is the United States transforming into a more authoritarian state?