For decades, the United States criticised China for not aligning with the liberal, rules-based global order. Washington consistently rebuked Beijing's practices of protectionism, trade barriers, and heavy state intervention in business and policy.

Yet, despite its efforts, the US achieved little success in forcing China to conform. Ironically, instead of changing China, the US itself has begun to mirror many aspects of China's long-standing approach to business and trade.

This shift became particularly evident after 2016, when then-President Donald Trump adopted an aggressive stance on China. As Trump returns to power in 2025 with renewed determination to bring China in line with US systems, it appears the US now resembles China more than ever.

While Washington may have built the liberal rules-based order, Beijing is now skilfully dictating the next steps with surgical precision.

China's journey to economic dominance has been a roller coaster of strategic manoeuvring. In the 1970s, then-Chinese leader Deng Xiaoping initiated market reforms, opening China to foreign investment.

This approach was further accelerated under President Jiang Zemin and Premier Zhu Rongji, who restructured the Chinese economy to align with capitalist practices. These reforms ultimately facilitated China's entry into the World Trade Organization (WTO) in 2001.

Western policymakers believed that economic liberalisation would inevitably spill over into political reform, transforming China into a more democratic society aligned with the global liberal order.

However, much to the disappointment of the US and its allies, China never seriously entertained the Western package of reforms. Instead, under President Hu Jintao, China made a complete U-turn from the path of earlier Chinese leaders.

Emphasizing state intervention, President Hu prioritized the creation of "national champions" in strategic sectors through large-scale state subsidies.

This trajectory has intensified under President Xi Jinping with new vigour—who, for over a decade, has accelerated China's dominance in critical technologies, industrial production, and export-led growth.

The scale of China's industrial strategy and its output is staggering—with export-led, unparalleled, cheap manufacturing products in focus.

In 2004, China accounted for just 9% of global manufacturing output; by 2023, this figure had surged to 29%, according to a World Bank report.

This transformation devastated the US manufacturing sector by accelerating deindustrialization, while enabling China to surpass traditional manufacturing giants like Japan and Germany.

China's economic output reflects this dramatic ascent: from a GDP of approximately $350 billion in 1989, it grew to $1.66 trillion by 2003 and an astonishing $17.79 trillion by 2023—second only to the United States.

Despite relentless US pressure over intellectual property theft and unfair trade practices, China has not yielded. Rather than adopting US norms, China has refined its approach to dominate emerging strategic sectors.

Economist Brad Setser points out that China's export growth is now three times the rate of global trade. China is leading the world in automobile production, accounting for two-thirds of global demand.

It also dominates the supply of steel and aluminium and holds the largest rare-earth reserves in the world, while controlling approximately 90% of the separation and refining capacity of this crucial material—essential for advanced technological production such as iPhones and laser-guided missiles.

In shipbuilding, China is again an unparalleled giant. According to a finding of The Economist, China's state-owned shipbuilder produced a larger tonnage of commercial vessels in 2024 than America has built since the Second World War!

The electric vehicle (EV) sector is another striking example of China's industrial prowess. Chinese EVs are 50% cheaper than their US counterparts, and China accounts for 60% of global EV sales.

This dominance extends to battery production, solar panels, and clean energy equipment, where Chinese firms enjoy similar competitive advantages.

However, the US administration's ability to expand industrial capacity beyond a few key sectors remains a complex issue, especially during periods of rising demand for industrial inputs.

Economist Jason Furman highlighted this challenge in Foreign Affairs earlier this year, noting, "The proportion of people working in manufacturing has been declining for decades and has not ticked back up, and overall domestic industrial production remains stagnant—in part because the fiscal expansion from Biden to Trump has led to higher costs, a stronger dollar, and higher interest rates, all of which have created headwinds for the manufacturing sectors that received no special subsidies from the legislation the US championed."

While the US appears poised to fully embrace protectionist policies, this approach carries risks. It could drive up inflation, increase the cost of living, and result in job losses in industries vulnerable to retaliatory measures from other countries.

For US industrial production to truly thrive, the country needs consistent and stable trade and industrial policies. A predictable policy environment would offer businesses the clarity needed for long-term planning, in contrast to the uncertainty created by abrupt or aggressive policy shifts.

The scenarios outlined above highlight the internal picture of how China has outmanoeuvred the US and its allies collectively. However, externally and in broader perspectives, China has also executed precise and strategic manoeuvres that have bolstered its current standing on the global stage. Despite being burdened by tariffs, trade barriers, monetary policies from different economic blocs, and geopolitical tensions, China has made calculated moves to adapt and thrive.

According to findings published in the MIT Sloan Management Review (Spring 2025), Chinese companies face at least a threefold challenge in branching out globally.

The first and most evident challenge is the rising trade tensions with the US, particularly the export restrictions on AI chips, which have directly affected China's technological advancements.

Second, there are the new investment regulations imposed by other countries. For instance, governments in North America and Western Europe have implemented stringent regulatory scrutiny on foreign businesses, especially Chinese firms, which has significantly hindered smooth operations and expansion.

Finally, as Chinese companies aim to tap into new potential markets, they encounter additional hurdles such as infrastructure deficits, bureaucratic inefficiencies, and the difficulties of adapting to unfamiliar cultures.

Despite these challenges, China has taken a "place-based" approach to internationalization, as highlighted by the MIT Sloan Management Review.

Ever heard of "microregions"? That's the focus of China's strategy to overcome these obstacles. Microregions refer to subnational units such as provinces, cities, or economic zones—terms that resonate well within the context of Bangladesh and South Asia.

This approach provides a granular perspective, pinpointing global opportunities more effectively than a broader national-level view.

A 2019 McKinsey study sheds light on the global significance of microregions. According to the study, there are at least 40,000 microregions worldwide, each spanning around 3,000 square kilometres, with an average GDP of $3 billion and about 180,000 residents.

Remarkably, among the 2 billion people living in microregions that achieved high growth over the past 20 years, 1.1 billion were in China. This staggering statistic underscores the scale and impact of China's targeted strategy.

Chinese firms are using three key tactics to sustain global growth despite mounting geopolitical pressures:

Finding New Routes to Existing Markets: Rather than exploiting loopholes, Chinese companies strategically relocate operations to regions with fewer restrictions.

For example, a Nanjing-based company recently established a manufacturing facility in Vietnam's Binh Duong province, allowing it to maintain supply chain flexibility while continuing to serve major markets.

Building Regional Hubs for Emerging Markets: China targets strategic launch points in regions such as Southeast Asia, the Middle East, Africa, and Latin America.

Cities like Singapore, Dubai, Addis Ababa, Nairobi, and Accra serve as operational bases to expand in these regions, focusing on industries such as technology, infrastructure, and energy.

Many of these Chinese firms—such as Shopee, Lazada, Tokopedia, IClear, Landcent, or Shenzhen Power Solutions—are well-established globally but remain relatively unknown in mainland China.

Leveraging Digital Talent Hubs: Chinese microregions specialize in specific technological competencies. For example, Shenzhen is known for electronics innovation, while Hangzhou has emerged as a hub for e-commerce expertise.

Make no mistake—DeepSeek, the Chinese AI chatbot that created a 'Sputnik Moment' in the AI rivalry, is based in Hangzhou. This regional specialization, coupled with global digital outreach, allows Chinese companies to craft competitive brands for international markets.

By focusing on microregions, Chinese companies are finding ways to expand globally while minimizing risks and adapting to complex international landscapes. This deliberate and nuanced approach not only mitigates external pressures but also positions China as a resilient force in an increasingly interconnected world.

The US once sought to reshape China in its own image. Instead, it is the US that now reflects many of China's state-driven economic strategies.

While Washington remains committed to protecting its industrial base, the path it follows increasingly mirrors Beijing's model of protectionism, state subsidies, and strategic industrial policy.

China's ability to navigate internal control while executing sophisticated external manoeuvres has not only strengthened its global position but also forced the US into an uncomfortable paradox: to compete with China, America must become more like it.

As the geopolitical rivalry intensifies, the ultimate question is whether the US can outlast China at its own game—or whether Beijing will continue to dictate the rules of global trade and industry in the years to come.

Shahjahan Ali is an alumnus of international relations of the University of Dhaka. He can be reached at: [email protected]