Is China winning? Three wake-up moments the world can’t ignore

For five long years, the global narrative about China has been increasingly dominated by doubt. Internally, the real-estate crisis, local debt levels, pandemic response, tech crackdowns, economic slowdown, unemployment, and a fast demographic decline made many believe that China was losing control of its economy and society. Externally, the geopolitical environment, Xi Jinping’s ideological stance, military build-up, Taiwan’s future, technology sanctions, and China’s position on Russia and Ukraine painted a picture of a country that was on the losing side of history.

But March 2025 told a very different story. A story of resurgence, clarity, and strategic strength. Not only did this message of hope resonate with the Chinese people, but also with the global business world. Something is clearly going on. In just one month, China delivered three powerful wake-up calls to the world. These weren’t loud declarations, but unmistakable signals that the country is not only back on its feet, it’s winning again. But how is China winning?

Wake-Up Moment #1: China Is Awake Again

After five years of crisis management, China has turned a decisive corner. The recent Two Sessions (or lianghui in Chinese), which is the most important political meeting of the year, was more than a policy update. It was a clear message. The leadership in Beijing projected confidence in the future and showed clarity in its priorities: high-quality development, greater self-reliance, investment in people, and long-term strategic planning. Gone is the reactive, cautious tone of previous years. In its place is a sense of bullish momentum. Policies emphasize upgrading its traditional industries, growing domestic consumption, and betting big on next-generation technologies.

From deep-sea exploration to supporting the low-altitude economy, China wants to set the global standard in innovation and become the smartest factory in the world. China’s plan to modernize the nation under the ‘New Quality Productive Forces’ initiative became, as I forecasted in my December 2024 Newsletter, the megatrend for China’s next decade. Traditional industries that have historically fueled China’s economic growth are expected to move up the value chain through rapid integration of digital technologies, AI, and robotics. China wants to compete with the West on quality and efficient supply chains, not anymore on capacity and low price. All this, while Trump pushes to bring these the old factories back to the U.S. to create jobs.

Beijing’s projected 5% GDP growth for 2025 signals confidence that China is back in business. Not only is China planning to stimulate the economy with an anticipated increase in fiscal deficit to 4% of GDP, but it is also prepared to fight the American trade war. While much of the world is focused on tariffs and protectionism, China is fighting a different battle: one for leadership in emerging industries and technology. China is no longer sleepwalking through the global disruption. It is awake, alert, and actively reshaping its path forward with many more Chinese breakthroughs expected in AI, biomanufacturing, quantum computing, embodied intelligence, 6G telecom, chips, robotics, and green technologies.

Wake-Up Moment #2: The Tech War Failed

Under Biden, America and its allies launched a coordinated campaign to try to isolate China technologically. The logic was simple: cut off access to advanced chips, tools, money, and talent, and China’s tech sector would stagnate. The gap with America would widen again. But the results have been quite the opposite. The tech war didn’t cripple China. It motivated it. China shifted from a pragmatic to a more idealistic mindset, determined to prove that Chinese engineers are just as creative, innovative, and skilled as their Western counterparts.

Chinese electric vehicle makers, led by BYD, are no longer playing catch-up. They’re leading. These companies are outperforming Western competitors, including Tesla, in both price and quality and are now dominating key global markets. Foreign car sales in China dropped from over 70% market share in 2019 to an expected 32% in 2025. Seven out of the top 10 intelligent driving systems in the world are now Chinese.

In artificial intelligence, DeepSeek’s reasoning model, Alibaba’s QwQ and Quark and the Chinese agentic AI platform Manus have emerged as serious competitors to the biggest Western names. They are developing large language models that are both powerful and increasingly self-reliant. The hit the NASDAQ took after DeepSeek’s release in January speaks volumes. In Europe - my home base - DeepSeek triggered a wave of renewed interest in Chinese tech from the business community and media.

Even in the most sensitive fronts like in semiconductors and lithography, China has made visible progress. Despite sanctions, Chinese chipmakers are innovating swiftly. As loyal readers of my newsletter know, China has been accelerating its technology breakthroughs despite widespread skepticism. The common assumption that innovation cannot flourish in a state-driven system is proving wrong. What the world misunderstood is that China’s innovation is driven first by its vast talent base and secondly supported by national policy. It doesn’t look like Silicon Valley, but it works. And China is winning battles the world never saw coming.

Wake-Up Moment #3: China Looks Like the Adult in the Room

While the United States turns inward, deals with political dysfunction, protectionism, and Trump’s transactional approach, China is quietly positioning itself as a stabilizing force. Trump-era tariffs and "America First" trade policies didn’t just target China; they are disrupting global supply chains, alienated allies, and shook long-standing partnerships and trade agreements.

Today, China and the U.S. are starting to trade places in global perception. Even if Trump pulls off his high-stakes gamble to reduce U.S. manufacturing dependence and debt, the price will be America’s global well-standing reputation. If he fails, the world risks a full-blown trade war and recession. This time, America will be blamed.

In contrast, China is presenting itself with calm and predictability. No ideological claims, just pragmatic diplomacy, long-term trade deals, and continued market reforms. China is rebuilding its global image. Not only as a manufacturing power but as a strategic partner. And when it comes to America’s threats, China isn’t seeking more dialogue; it’s responding with strength, signaling that this is a very different China from 2017. China’s strength also reveals the weakness of developed economies who put up with Trump’s bullying.

This shift is not going unnoticed. Europe and Japan, the world’s third- and fourth-largest economies, are increasingly turning their gaze eastward. Disillusioned with Washington’s unpredictability, they are rediscovering Asia, including China, as a stable engine of growth and opportunity. In a world where the U.S. is seen as volatile and unpredictable, China is being cast as the adult in the room.

March 2025 was a moment of global reawakening. The three wake-up calls - China’s renewed confidence, its unexpected tech strength, and its quiet rise as a stabilizing force - are challenging the old assumptions of global powerplays. China is no longer struggling to stay in the game. It’s shaping the next round. For companies, governments, and analysts still playing by a decade-old playbook, the message is clear: the game has changed. China isn’t retreating. It’s competing. And, in many ways, it’s already winning.