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    Home»Economy»Is China the ultimate free-rider?
    Economy

    Is China the ultimate free-rider?

    Press RoomBy Press RoomApril 16, 2025No Comments4 Mins Read
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    With a Trump-induced decline of American alliances n the works, is Chinese global ascendancy going to result? It would seem so. Matt Yglesias tweeted that “America may be cooked and it’s gonna be the Chinese century.” Thomas Friedman recently wrote a column suggesting that the future is to be found in China, not America.

    In the realm of technology, China’s advances are impressive. BYD has the best and cheapest electric vehicles, the CCP is pulling out all stops to attain high-quality chips and lithography capabilities. Chinese AI, in the form of DeepSeek and Manus, has shocked many Westerners with its inventiveness.

    Yet Western and most of all American hegemony is not over yet. These advances by China are real, but they rest on a foundation of Western values and institutions more than it might appear at first.

    Consider global economic growth over the last few decades. China has risen in import, relative to most of the poorer nations it was once bunched with. America too has risen in economic influence, widening the gdp gap with Western Europe. The lesson is that economies with scale have prospered more than average, which is hardly surprising in a world where tech and also big business are ascendant. America and China are thus likely to prosper jointly under broadly common conditions.

    The inconvenient truth, for China, is that its scale relies upon American power and influence. The Chinese export machine, for instance, requires a relatively free world trading order. The recipe to date has been “mercantilism for us, free trade for everybody else.” Yet Trump threatens to smash that framework. If the world breaks down into bitterly selfish protectionist trading blocs, China will be one of the biggest losers. After all, where will the Chinese sell the rising output from their factories?

    The Chinese growth and stability model also requires relatively secure energy supplies. For that it relies on the United States and its allies, as the Chinese programs for nuclear and solar power remain far from their final goals. If the Western alliance system collapses, who is to keep the Middle East relatively stable, at least stable from the point of view of procuring fossil fuels? China hardly seems up to that task, as the country has neither the means, the inclination, the experience, nor the allies to do the job.

    Furthermore, China relies more on American hard and soft power more than it likes to let on. The leading role of America makes both Western Europe and also Latin America a bit “soft” when it comes to self-defense and martial spirit and also nationalistic pluck. After all, many countries are outsourcing their defense and also parts of their intelligence-gathering to the United States. That makes them relatively easy pickings for Chinese infiltration, whether it be economic infiltration, pulling up alongside as an easy “extra friend” to boost bargaining power with America, or spying and surveillance. If Trump scuttles our current multilateral commitments and trust, China will find most other countries harder to penetrate, not easier.

    Another risk on the horizon is nuclear proliferation, which could result from any number of events, ranging from an Israeli attack on Iran, the partial fall of Ukraine, or a Chinese invasion of Taiwan. The more nuclear powers inhabit the world, the more China is hemmed in with its foreign policy ambitions. That outcome may not be good for the United States either, but again we are back to the scenario where the US and China have some fundamental common interests, rather than the narrative where China displaces America as world leader.

    There is much to rue in the first few months of Trump’s foreign and economic policy, but China is far from being able to take the baton. They are running second, and doing a great job of that, precisely because we Americans – in spite of all our mistakes — still have the lead.

    The post Is China the ultimate free-rider? appeared first on Marginal REVOLUTION.



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