For ages, everyone needed access to the American market. I used to call the US, “the consumer of last resort.” If you wanted to get rich, if you wanted to industrialize, if you wanted to scale, you needed the American market. Europe sold to the US, Japan sold to the US, South Korean and China sold to the US. This requirement is why Japan was forced to sign the Plaza Accords, which basically destroyed their future. Oh, life in Japan is fine now, but it’s no longer the roaring Tiger of the 80s.
But the US has lost its place, which is why China was able to laugh in its face when Trump tried to use tariffs against it. His assumption was that China needed the American market. This was true 20 years ago, maybe true ten years ago, but it’s not true now.
But wait… there’s more!
Not so pretty, is it? And unlike America, Chinese consumers aren’t in debt. Their market isn’t based on a deck of cards or predatory lending meant to lock consumers into never ending debt payments.
Looks a lot like America in the 50s and 60s, actually.
China’s growing fast, and certain respects, they’re growing smart.
China is building nuclear plants 2 to 4 times faster than the West and 3 to 7 times cheaper”
Further, China is building far more renewable energy than anyone else, and MAGidiots beliefs aside, it’s working out just fine for them. Ninety percent of new power in China is renewable.
You can see this on this lovely map:
Indeed, for the first time ever, China’s increasing energy demand happened at the same time as a reduction in CO2 production. If there’s a hope for us on climate change (there really isn’t, but still) it’s that China is the primary industrial power AND its leaders and population aren’t idiots who think climate change is a hoax or that it’s real but ignoring it is good for the economy.
Now this isn’t to say that China’s all wonderful or anything. They have high speed trains and they’re electrifying based on renewable energy and to a much lesser extent nuclear fast, but they still have an insane car-centric society.
Still, they’re more sane than any other major country, by a fair margin.
China is now the world’s largest consumer, industrial producer, ship builder, drone maker, auto manufacturer, leads in about 80% of tech fields, produces more scientific papers and patents than any other country, has 8 of the world’s top 10 research universities (Harvard is the only American university on the list, at #1, but…. recent events are not promising), the most electricity production and the cleanest energy mix of any major country.
The idea that China and the US have a serious rivalry is laughable. The US has lost. It’s like Britain in 1920. It’s all over, except, possibly, for the shooting.
mago
“It’s all over, except, possibly, for the shooting. “
Let’s hope it doesn’t come to that because then it’s all over except for the crying if there’s anyone left to cry.
The cockroaches and rats might make it.
someofparts
So I guess in a few years, for those of us still here, members of this community who leave the country can regale us with stories of tooling around in cheap, cool Chinese EVs in whatever expat destination they settle into.
Jessica
A quibble: Purchasing power parity for consumption shows how far Chinese consumers’ yuan go for them, but for someone exporting to China, the meaningful number is the international value of their sales to China.
Chinese wages have been rising rapidly (from a low level), so the difference is not as great as it once was, but it is still there.
To put the same thing another way, PPP attempts to capture use value but international trade is about exchange value.
The other factor that other nations’ exporters need to take into account is how much they figure to be able to sell to a China explicitly dedicated to continually expanding its own production and capable of doing so compared to what they figure to be able to sell to a US that its fitfully and spitefully mercantilist but incapable of the same degree of production as long as it is run for and by rent seekers not producers.
EGrise
>>It’s all over, except, possibly, for the shooting.
What do we think will be America’s Suez Crisis? Taiwan?
And do the powers that be *really* think the US could win a naval+air war in the Taiwan Strait? I assume it’s mostly bluffing on the behalf of the MIC and their weapon contracts, but some of them seem to be in earnest…
KT Chong
“It’s all over, except, possibly, for the shooting.”
A war between China and the US will NOT be a short one. It will be a war of attrition like the one in Ukraine between the US and Russia.
In a prolonged long war of attrition, China will wear down the US — because: (1) China has the superior manufacturing capability, many times over America; and (2) China controls critical components and rare earth minerals that are essential inputs for manufacturing and maintaining modern weaponry like drones, jets and missiles.
In a war with the US, (most likely via a proxy like Taiwan* or more likely the Philippines,) China will OF COURSE cut off all those critical and essential inputs to the US. The US will NOT be able to find substitutes and become self-sufficient for those components and minerals in the short and even medium terms; (I would say, realistically, not even in the immediate long term.)
That means: over time during the war, the US military industry complex will run out of critical input components and supplies. US industry will NOT be able to replenish and resupply the US military with aircrafts, drones, missiles, drones and other weaponry that will gradually be destroyed, lost and exhausted in the long war. IMO: after one year or probably as soon as 8-10 months, the war will become in China’s favor when the world will notice that the US is running out of and not having enough weapons to continue the war; (i.e., 8-10 months because the US military industry complex only has about 3-6 months of critical and rare earth reserves, which will quickly be exhausted in a wartime and will not be able to quickly replenish/restock when China cuts off supplies.)
On the other side: China (with its superior manufacturing prowess) will be able to replenish, restock and resupply its destoryed and lost military hardware, constantly and without interruptions. The US will NOT be able to do the same.
And, atop of China’s manufacturing prowess + control of critical components to replenish and resupply during wartime.: the recent war between India vs. Pakistan — i.e., India used Western weaponry and Pakistan used Chinese combined arms — showed that Chinese military technology and weapons are very close to if not already on par or even have surpassed Western ones.
That is why I am very confident that in an actual hot war, the US will lose to China over time… and likely lose very badly. BTW, that’s not just me conjecturing: the US has run simulations of wars between the US and China, and the US lost every one.
*A war over Taiwan will likely be a short one, with China winning decisively and quickly. China will be able to overrun and overwhelm the small island very quickly. However, the victory will be more costly (in terms of human cost) and has more negative long-term consequences (economically and politically) for China than, let say, a proxy war fought in the Philippines, which will last much longer but incur fewer costs to China. It will be extremely costly and devastatingly to the Philippines, though.
GrimJim
RE: War with China, under the current regime China gets nuked. plenty of EMP to knock out their factories, maybe a nuke on the Three Gorges Dam to take out massive population. I put nothing past the current Regime in DC.
Of course, they’d have to personally piss off Trump, as he won’t care what happens to Taiwan without big, BIGLY bribes. Without the moolah, they are out of sight, out of mind (as is Trump).
More and more I think the way things will start to end in the US, with the pending complete collapse of the economy, start out more like the end of the Ancien Regime, the French Revolution, and the Regin of Terror, until we go full Yugoslavia via Rwanda.
Except as there is damn all on the Left, it will be all Right-wing fascist factions vying for power in the urban power centers as the rural areas mostly fall to pieces with their own race wars.
We are in the Wyle E. Coyote “walking in midair” phase. There’s no telling when Trump will pull a massive, unavoidable, utterly cockamamie financial-economic-political scheme — and when no one in SCOTUS or Congress stops him, all of the adults will cash out from the US casino and run for the exits. Note this is something that affects the actual economy, I’m not talking his grifts and grafts — that’s penny-ante stuff.
I see Trump losing his patience with the Fed and just sending the SS in to oust the leadership and take over directly. Something on that level, with that kind of resonance on the Richter Scale… that’s coming soon. No one will stop him, so…
Jan Wiklund
About China’s insane car society: You can’t have cars in the cities without sooner or later making room for them. And that means dispersing the cities. And that means loosing the synergies the economy depends on.
As Fed discovered (J. Abel et al: Productivity and the density of human capital, 2010) the more dispersed the cities, the worse their economical outcome.
So it’s apparently just a matter of time until China’s growth flats out….
Edmund Johnson
A well-researched, well-presented and informative article, thank you!
Jefferson Hamilton
>more sane than any other major country
I am usually a China booster, but talk about damning with faint praise…
Tony Wikrent
Also, I note that for years China has been producing over TEN times more steel than USA. Not ten percent more; TEN times more.
someofparts
Well, here is a big thing the US is doing to undermine China – buying ports.
https://www.nakedcapitalism.com/2025/05/joker-geoeconomics-and-the-fight-over-global-ports.html
someofparts
Also this, on how far ahead China is –
https://neuburger.substack.com/p/china-leapfrogging-the-us-in-tech
“Soon we may not even show up in their rear view window.”
Silicon is yesterday’s technology. China is moving to post-silicon tech that produce speed multiple times faster than anything possible with silicon, laws of physics being what they are. I’m guessing the US can’t even get this new tech TO the drawing board, much less into production.
miss jennings
‘Well, here is a big thing the US is doing to undermine China – buying ports.’
Blackrock is buying the ports, not the US government.
Blackrock is a private entity.
Blackrock’s Plan to Own the Fractionalized World:
https://unlimitedhangout.com/2024/02/investigative-reports/tokenized-inc-blackrocks-plan-to-own-the-fractionalized-world/
Larry Fink Holds ‘Anti-Hate’ Pro-Israel Townhall for All Blackrock Employees:
https://valuetainment.com/larry-fink-holds-anti-hate-pro-israel-townhall-for-all-blackrock-employees/
Blackrock: There Can Be No Compromise With Evil:
https://www.middleeastmonitor.com/20240625-blackrock-there-can-be-no-compromise-with-evil/
Seattle Resident
EGrise
Iran might be that American Suez canal crisis. And if we get involved with Israel in fighting Iran, we won’t be in any shape to fight China. Col. Larry Wilkerson said it would be a 10 year war, 100,000 casualties, and 200-300 a barrel oil, which would likely send us into a depression.
eg
EGrise, Ukraine may be the US/NATO/EU Suez, but acknowledgement of such is likely to be a ways off yet …
c1ue
Only people who don’t look at China’s rising coal, nuclear, oil and natural gas use, think China is focusing on renewable energy.
China’s plan is glaringly obviously “all of the above” – but wind and solar PV are still tiny fractions of total Chinese power consumption. Arguably, this fraction exists more due to Western alternative energy subsidies leading to purchasing of Chinese solar panels and wind turbines, than anything else.
As for the wealth of Chinese: it is certainly growing, but failure to recognize the much higher population hence low per capita wealth is a minor problem… minor compared to the failure to understand the differences between a massive food, commodity and energy importing nation vs. the United States today and in the past.
China, Japan, the EU and South Korea MUST have massive export surpluses in order to pay for these massive energy and food imports. They can not and will not continue to grow with concomitant export increases to provide the increased influx of food and energy.
It is laughable to think that switchover of export sales to internal consumption will somehow magically compensate.
Ian Welsh
Someone doesn’t understand marginal economics. About 86% of new energy capacity was renewable in 2024 and more than half their energy capacity is now solar.
https://english.www.gov.cn/archive/statistics/202501/28/content_WS6798de96c6d0868f4e8ef410.html
As for their requirement for trade, sure. And since they’re the leading manufacturing power and their products are far cheaper than anyone else’s in most categories, that’s not a problem. In fact, they are the leading exporter to more countries than any other nation in the world.
Since I pointed out in multiple articles that the Russia/China alliance is a huge deal because of energy and food, I’ll just laugh now.
EGrise
Seattle Resident, eg, thanks for those – for some reason I hadn’t considered either. Ukraine is looking more and more likely, and if Col. Wilkerson is right with regard to Iran the entire world will hate us, and so too will unborn generations of Americans.
Carborundum
It’s important to note that cumulative installed capacity is not the same as production and electricity generation accounts for less than a third of China’s total energy use.
The article looks to me like it must have been machine translated. When one does the math on the various numbers cited, solar is about 47% of total culmulative installed renewable capacity and wind and solar together account for approximately 18.5% of total power generation. For context, that would be equivalent to roughly a 5 percentage point increase from 2022, which is the last IEA figures I can find.