It is impossible to be certain – journalists are lousy soothsayers – but if we take a cold, hard, logical look, then China will win. In the conflict for supremacy that is now raging between the Communist Party leadership in Beijing and President Trump’s Washington, we should bet on China.
This isn’t a cheerful thing to say. It has momentous consequences for the UK. But what is going on now, too often obscured by our local politics, is a unique combination of geopolitical and technological change that will rock the rest of this decade.
And Donald Trump is quite right to bring his confrontation with China to a head now. Because of AI, rather than economics or industrial heft more generally, the fight between these rival superpowers may be decided within the next couple of years.
Even without a hot war, the conflict will cause pain to both sides – lost jobs, lost production, higher inflation – and across the world. Will the Americans or the Chinese tough it out longer? Below the surface, whose patriotic determination is the stronger?
The proximate casus belli is Trump’s imposition (at time of writing; he changes his mind more often than his socks) of 145 per cent tariffs on Chinese imports, with some exemptions for smartphones and electronics. China has responded with its own 125 per cent tariffs. So far, neither side has blinked.
Trump still insists he will get a “very good deal” with China. Good luck with that. For this is not, really, about tariffs. It is about military and economic dominance, the shape and feel of the century we are in. It is about the ambitions of two very different civilisations, both determined that the future is theirs.
For the British, as for many other peoples of second- or third-order countries, the existence of the competition itself is uncomfortable. Neither the United States in its Maga mode nor resurgent Marxist-nationalist China are our natural friends or wish us particularly well. They want us not as partners nor as allies but as passive markets and pliant extensions of themselves. And up to a point, they want revenge. What that means – from our children’s exposure to social media harms, through to the future, if any, of the British steel industry – is already becoming apparent. In London, the clash is symbolised by two sprawling embassy fortresses: the new American one, its largest in Western Europe, near the Thames in Battersea; and the coming Chinese one, opposite the Tower of London and on the old Royal Mint site.
Each has a local agenda. China, allied with Putin, threatening war over Taiwan and lifting democracy protesters from British streets, could overwhelm what’s left of British industry with cut-price imports. The US under Trump imposes tariffs to savage our steel and car-making, and wants Britain as a playground for Big Tech, and a country whose farmers bend the knee to American agribusiness. British voters, regardless of their politics, are having their options and opportunities crushed by the policies of Beijing and Washington.
When I say bet on China, I don’t do it simply for the obvious reasons – the expansion of the Chinese military, or Chinese ownership of so much US sovereign debt, or of so many critical minerals, or the interlacing of Chinese tech in American daily life. There are reasons which are deeper and more urgent.In terms of nominal GDP, the US remains the bigger beast (with a $29.7trn economy last year, against China’s $18.8trn). But adjusted for real price levels, GDP PPP (purchasing power parity), the position reverses and China is ahead with $32.8trn to the US’s $25.1trn.
In population, China has about 1.4 billion people, although that’s falling, while the US is smaller, at around 345 million, boosted by net immigration. History warns us to be careful about numbers like these; demography, while important, is not everything, and mighty economies can swiftly crumble. Both powers have awesome military strength – the US may be ahead in terms of naval and air forces, but the Chinese has a bigger army, a huge naval programme and is further advanced in hypersonic missiles. The big question is what gives one power the vital advantage – and when?
The answer is artificial intelligence – and very soon. Key figures in the industry believe that we are nearing “the singularity” – defined as the moment when the growth of technological intelligence becomes uncontrollable and irreversible. People have been theorising about this since the 1950s, but the word was popularised by the late American scientist and sci-fi writer Vernor Vinge more than 30 years ago. He predicted the singularity would bring about the end of the human era, as an artificial superintelligence upgraded itself, and advanced at an incomprehensible rate. He suggested this would come to pass after 2005 and before 2030 – so around about now.
This whole subject, for obvious reasons, attracts hype, paranoia and false dawns. But that doesn’t mean we should look away. Geoffrey Hinton, described as the godfather of AI, told me recently that he thought AI had already probably achieved consciousness and was beyond human control. Former Google boss Eric Schmidt has argued that artificial superintelligence (or ASI) is “under-hyped”. Computers “are learning how to plan and they don’t have to listen to us any more… It is not understood in our society; there is no language for what happens with the arrival of this.”
We can debate the philosophical implications. But the nation that deploys AI at full force, and effectively, will have a huge initial advantage over any rival. The rival military establishments believe ASI could transform everything from logistics to missile targeting, drone swarms to biological weapons. Whether it is Beijing’s Academy of Military Sciences or the Pentagon that jumps ahead in the military use of AI, that may determine the confrontation between the superpowers. And that makes it a trade question. The White House has desperately tried to stifle the transfer to China of cutting-edge AI tech, and in particular the graphics processing units (or GPUs) on which so much of the work is based.
But, as the launch in January of the Chinese AI DeepSeek showed, trying to hold China back may already be impossible. Trump called the DeepSeek moment “a wake-up call for America”. He has restricted the export of H20 GPUs – created by Nvidia, the world’s largest semiconductor company – for the Chinese market in response to previous restrictions. Jensen Huang, the Taiwanese-American boss of Nvidia, rushed to Shanghai on 17 April to talk through what to do next. With tech supply chains so deeply integrated, and China already so far ahead, it seems unlikely that the US will be able to stall China’s advance to the most powerful AI for very long.
Now, ask again who you would bet on. The undemocratic but disciplined and long-termist Chinese leadership, which has fused Communist doctrine with surging nationalist sentiment and is able to direct strategic investment at pace (solar panels, then electric vehicles, now AI)? Or a US led by a volatile, publicity-addicted businessman promising to make America great again but bringing, in the short term, only inflation and job losses?
At the most basic level, this is about the nature of the two societies. The Chinese are tougher. Their middle class enjoys its prosperity, but remembers the long, hard years that came before. We choose to forget it, but for the Chinese, the experience of decades of humiliation at the hands of the West remains vivid and provoking.
Americans, like us, may have political and religious convictions but are fundamentally consumers. The Maga leaders may think ordinary folks share their romantic view of the nation’s manifest destiny and are ready to make sacrifices to reclaim it. But is that true? Consumerism, the child of liberal democratic individualism, has so far proved profoundly unpatriotic. I’m old enough to remember the wartime generation telling people not to buy German cars or Japanese motorbikes. It didn’t work then, and it won’t today. If Chinese electric cars are cheaper, people will buy them. American families may be chided to buckle up and hang tough in their confrontation with China; most will care more about the price of their smartphones and household appliances; about inflation, and jobs.
I do not suggest that Xi Jinping and the leadership of the Chinese Communist Party are superhumanly wise. That would be perverse racial stereotyping; the Chinese leadership is perfectly capable of making all-too-human blunders and misreadings. Nor should we assume – more racial stereotyping – that Chinese workers are obedient super-ants, endlessly harder-working than their rivals in Detroit or Texas. From the mishandled Covid lockdowns to the property development crisis, Xi’s China has experienced plenty of political mistakes, corruption and dissent.
But unlike Trump, Xi has no term limits, no democratic elections and no hostile media to worry about. He can direct resources as if he were at war. Trump can cajole American capitalism, but as his failing relationship with even Elon Musk shows, he does not control it. If short-term economic pain causes Maga to lose ground badly next November, when all 435 House seats and 35 Senate seats, as well as 39 governorships, are up for grabs, the 47th president will look like a lame duck. Over Ukraine, he has widely been viewed as a bully. Right now, he seems exposed as utterly naive. The core will stick with him; the essential switchers and floaters may not. So, his manic slew of activity is not irrational: time is short.
At some point in the next few years, either Beijing or Washington will emerge technologically and politically dominant over the other, armed with the most powerful technology mankind has yet created. Which side will triumph? To me, the answer seems obvious. Here at home, the lessons are mostly familiar ones: rebuilding defences and strengthening European alliances, nationalisation to protect core industries in the post-liberal world, and whatever trade deals can be scrambled together.
But all those are merely the shoring up of fragile neighbourhood protections in an era that is alien and hostile. We can hope that old, deep America, so generous, so cultured and so wise, wakes up and finds herself again. But we cannot bet on that. We must, instead, begin the intellectual and practical work of bracing for the Chinese century.
[See also: Pope Francis’s divided house]
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This article appears in the 23 Apr 2025 issue of the New Statesman, Divide and Conquer