2025 Year in Review: China’s Strategic Triumph over U.S. Volatility

Throughout 2025, the world’s loudest voice has undoubtedly been Donald Trump. Since his inauguration, the U.S. President has wielded executive orders like a sledgehammer, sending shockwaves across the globe. Internationally, Trump didn't just use "tariff wars" to rewrite trade rules; he attempted to force peace through a mix of American prestige and bellicose threats of global conflict.

However, as 2025 draws to a close, the thunderous rhetoric has yielded an unexpected result. The true beneficiary of the year was not Trump, but Chinese President Xi Jinping. Xi demonstrated exactly how much the U.S. still relies on China, leading many analysts to conclude that China has decisively won the first round of the battle for 21st-century supremacy.

The Industrial Juggernaut China’s industrial might was on full display this year. Accounting for over one-third of global value-added manufacturing, Beijing now possesses the power to disrupt global supply chains overnight. In the green tech sector, Chinese firms control 60-80% of the supply chain—from raw materials to finished goods like solar panels, wind turbines, and EVs. Meanwhile, the emergence of "DeepSeek" proved that China is making massive strides in AI, despite U.S. efforts to maintain its lead. Furthermore, Chinese pharmaceutical innovators are now conducting clinical trials at a pace and scale that rivals their American counterparts.

Economic Leverage as a Weapon The tide has shifted for American corporations. Two decades ago, they flocked to China for cheap labor; today, they maintain R&D labs there to stay relevant. Xi Jinping has proven that industrial capacity is not just a source of wealth, but a source of power. By restricting the export of rare earth minerals, Beijing demonstrated its willingness to weaponize global dependencies.

Data from the Australian Strategic Policy Institute (ASPI) reinforces this lead: China now dominates research in 66 out of 74 critical areas, holding a "monopoly-level" lead in 22 of them.

The Trump "Assist" Ironically, Xi’s success was aided by Trump’s own policies. Economists now view Trump’s renewed trade war as a strategic blunder. Trump failed to realize that China’s non-democratic system can endure economic pain far longer than the American electorate.

By favoring unilateral tariffs over building a commercial coalition with allies, Trump failed to isolate China. Domestically, his hostility toward the scientific community—slashing grants and targeting researchers of Chinese descent—triggered a "brain drain." Talented individuals are now fleeing the U.S. or avoiding it altogether, with China being the primary beneficiary of this talent migration.

The Long-Term Outlook While China secured a clear short-term victory, the long-term outlook remains clouded by political rigidity. China’s economic data reveals underlying cracks: factory-gate prices fell 2.2% in November, marking the 38th consecutive month of decline, while secondary property prices remain 20% below their peak. Though the CCP vows to stimulate domestic consumption in 2026, its unwavering support for "strategic manufacturing" suggests that the global markets must brace for continued overcapacity.