Since 2017, when Xi decreed that China should become a leader in generative artificial intelligence (that which feeds on citizens’ data to create its own reality), the country has exploded. It has generated 38 patent applications in the field of artificial intelligence, five times more than the US.
It was supposed to be the day America “became great again.” Instead, April 2, 2025, risks being remembered as the moment when US President Donald Trump inadvertently gave China the opportunity, which, after a century of darkness and three decades of rampant debauchery, is “becoming great again,” reclaiming the place at the center of the world it had occupied during the centuries when East and West barely touched.
Despite the MAGA (“Make America Great Again”) rhetoric, America has never ceased to be great. Less powerful, yes, and time has never been kind to any superpower. But globalization and even de-industrialization have been conscious choices that have brought it great benefits, focusing its energies on advanced technologies and strengthening its global power throughout the past century. However, because of the illusion that its winning formula – democracy, the dollar and the bazooka – was untouchable, that global order built by and for the US today is much better suited to China, which, with a frantic run and a different formula, has won the triple challenge of industrialization, militarization and digitalization.
Its president, Xi Jinping, can not only afford to sue the US at the World Trade Organization, as he did over Trump’s tariffs, but also to seek anti-American alliances, presenting himself as the true defender of the free market and a harmonious world order. And this, despite decades of shamelessly copying products and processes from the West, reproducing (and often improving) them, thanks to a very cheap labor force. Now times have changed. With the one-child policy introduced in 1979 and abolished in 2013, the Chinese population has stopped growing. There will no longer be enough young people to replace working grandparents and parents. According to the National Bureau of Statistics, by 2030 China will have 81 million fewer people of working age compared to 2015. This means that it is forced to innovate to grow the economy. And it has already begun to do so, putting a heavy foot on the true source of wealth and power in this century.
Since 2017, when Xi decided that China should become a leader in generative artificial intelligence (that which feeds on citizens’ data to create its own reality), the country has exploded. It has generated 38 patent applications in the field of artificial intelligence, five times more than the United States. The applications range from chatbots in e-commerce, used by giants like Alibaba and ByteDance that are revolutionizing global trade without being noticed, to autonomous driving, more widespread in Chinese cities than in American ones (and almost non-existent in Europe), supported by electric cars from BYD, a brand that is now replacing Volkswagen, the leader for 20 years.
The large trade deficit ($300 billion) that the US has accumulated with China and that prompted Trump to impose 145 percent tariffs on Chinese imports, shaking up the world order, would not be a problem for the US if China had not already developed a digitally advanced ecosystem and an increasingly powerful army, in the service of a geopolitical ambition that has grown in parallel with its economic one.
Trump is reacting in a disorganized way to a reality that was underestimated by his predecessors, starting with Barack Obama. And his tools, tariffs, risk resembling a stick used against a war cannon. “Cutting trade ties with China?” asks Zak Dychtwald, author of the book Young China. “It could have worked 20 years ago.” Today, China is a self-reliant system, relying on a strong industrial base to advance technologically, as it has shown extensively in the nuclear energy and electric vehicle sectors.
For years, a school of thought has prevailed in the US, represented by Regina Abrami in the Harvard Business Review in 2014, according to which a dictatorship like the Chinese one would never be able to innovate in the field of technology, hampered by the restrictions imposed on its citizens. Forgetting that, in the XNUMXth century, it was the US itself that “stole” innovations from the British (the case of textile machinery technology is well known) to fill the industrial gap and build the foundations of their future dominance. American elites have been reassured by the idea that the Chinese would remain mere copycats, and for years have accepted unfavorable industrial conditions, such as the transfer of know-how, only to sign joint agreements that allowed them to produce in China at low costs.
The reality is very different. Not only has the Chinese dictatorship become increasingly harsh, aided precisely by new technologies and millions of cameras scattered everywhere, but thanks to a mixture of careful planning, a large dose of luck and a highly adaptable population, China has gone far beyond its simple role as the manufacturing heart of the globe: today it is one of the main hubs of global innovation.
When the Chinese government built the famous “firewall” around the internet, it not only shaped the Chinese vision of the world, imbuing it with an anti-Western rhetoric that today reinforces and supports Xi’s harsh response to US tariffs in the name of “saving” China, but it also achieved an unexpected, very useful side effect: it fostered the development of a large number of domestic startups, which later became web giants. Unlike the broad masses of the population, Chinese entrepreneur-scientists have always had the opportunity to overcome the “firewall” via VPNs (never completely banned) and be informed about what was happening in the Western ecosystem. From time to time, even Google and Facebook have been accessible: enough to help domestic technological development, then heavily promoted and financed by the state. Giants like Alibaba, Baidu and Tencent are the result of this.
WeChat, Tencent’s messaging service, illustrates well the exponential technological growth that China has experienced in recent years, especially during the Covid period, when the West somehow lost sight of the Chinese reality. A development that was based not so much on great inventions that give birth to individual multi-billion dollar colossuses, as happens in the US, but on the massive spread of technology among a young and very suitable population, “helped” by a government that has granted it few rights and privacy.
WeChatPay, the digital payment system, has almost completely replaced cash, with a penetration rate of up to 90 percent. In 2018, it was estimated at 1.2 billion transactions per day, compared to just 1 billion per month for Apple Pay.
“To have lived in China from 1990 to the present day is to have experienced the greatest and fastest economic change in any corner of the world,” explains Dychtwald, who presents the “Experienced Change Index.” To put that into perspective: between 1990 and 2019, China’s per capita GDP grew more than thirtyfold, while in second place, Poland, it only grew by about tenfold. “It is this great tolerance for change that makes China so globally competitive,” he continues: “Ultimately, innovations must be judged on the basis of people’s willingness to use them, and in this respect, China has no rivals.” This is the country on which Trump imposed tariffs, hoping to halt its expansion. A China that is already beyond industrial production (which still accounts for a third of its GDP) and aims to export advanced technology and services, while, quietly, with a slow but steady military strangulation of the island, is testing American tolerance for the long-warned future invasion of Taiwan.
A trade war and a military conflict in the east. And Europe in the middle, forced to choose. “Both sides have left the door open for negotiations, but the sustainability of a real deal is questionable,” says Jacob Gunter, senior analyst at the think tank Merics: “The foundations of the economic, technological, security and geopolitical relationship between the US and China are increasingly incompatible.” The clash seems inevitable.
