The recent summit between Donald Trump and Xi Jinping in Beijing produced no major breakthroughs on tariffs, Taiwan, or ongoing geopolitical conflicts like the Iran war, prompting many observers to dismiss it as inconsequential. Yet its restrained and cordial tone suggested a new, more pragmatic approach that implicitly acknowledges the two countries' deep economic interdependence.
Recognising China as a formidable economic competitor is not a concession; it is simply an acknowledgement of reality. Over the years, the debate in the United States over China's rise has followed a familiar pattern: denial, anger, and eventual acceptance. During the era of double-digit Chinese growth, many US analysts dismissed official Chinese statistics as unreliable or inflated. As China's economic transformation became difficult to ignore, its success was often attributed to industrial policy, imitation, and unfair practices, including intellectual-property theft and currency manipulation.
But those narratives are harder to sustain now that China has reached the technological frontier in several strategic industries. Most notably, Chinese electric-vehicle manufacturers have emerged as major global competitors across a broad range of market segments, from low-cost models to increasingly sophisticated premium brands. In pharmaceuticals, Chinese firms have evolved from imitators into innovators, shedding the old "free rider" label. And in semiconductors, China has made significant strides in producing advanced chips, though it still trails behind global leaders like TSMC.
