The world is witnessing a shift in power dynamics, and the question on everyone’s mind is: Can China successfully position itself as the next global leader? China’s rise appears unstoppable, yet the nation faces the monumental challenge of shaping its identity on the world stage. This task is not just about economic might or military strength—China must also project its values, culture, and soft power in ways that will help reshape the global order.
China’s Path: From Humiliation to Domination
China’s journey from weakness to power has been profoundly shaped by its past. For over a century, China suffered foreign invasions, territorial losses, and a series of weak dynastic rulers, leading to the period known as the “Century of Humiliation” (1839-1949). This era left China with a deep resolve never to be weak again.
Following the victory of the Communist Party in 1949, China focused on rebuilding its infrastructure, economy, and military power. The emphasis was on regaining national dignity and ensuring China would never again suffer foreign domination.
A critical turning point came with the collapse of the Soviet Union in 1991. China learned crucial lessons from the Soviet experience: the failure to balance political reform with economic stability led to the Soviet Union’s downfall. In contrast, China adopted an approach of gradual economic liberalization, focusing on growth, political stability, and national unity prioritizing stability over rapid political reform. As a result, China emerged as a rising global power with ambitions to shape a new international order where it plays a dominant role in trade, politics, and security. The humiliation of the past became a driving force behind China’s strategy to reshape its position in the world.
A Historical Shift: From Building Walls to Building Bridges
One of the most symbolic examples of China’s historical mindset shift is its iconic Great Wall. Built over centuries, the wall was not only a physical barrier against invaders but also a symbol of China’s desire to protect itself from foreign influence. For centuries, this wall represented a worldview where China saw itself as the center of civilization, needing protection from external threats. In contrast, today’s Belt and Road Initiative (BRI) represents a monumental shift. Rather than building walls, China is now building bridges, literally and metaphorically, connecting China to over 140 countries through large-scale infrastructure projects. This shift in worldview signifies that China is no longer retreating behind protective walls but is actively reaching out to form new economic and diplomatic ties. The BRI is not merely an economic strategy; it’s about creating global networks of interdependence, where China is a central player.
The BRI has sparked controversy, with critics accusing China of creating “debt traps” for developing nations by offering loans that may not be repaid. Yet, defenders like former Singapore Foreign Minister George Yeo and former UN President of Security Council Kishore Mahbubani argue that the BRI offers crucial developmental aid without the political strings often attached to Western loans. This strategy reinforces China’s image as a pragmatic, non-interfering economic partner—at least in comparison to the U.S.
The Rise of China: From Manufacturing Giant to Technology Innovator
China’s economic transformation over the past two decades has been nothing short of extraordinary. From 2000 to 2024, China’s GDP surged from $1.2 trillion to over $18 trillion—an astounding 15-fold increase. In comparison, the U.S. expanded only 2.8 times over the same period. With this momentum, China is on track to surpass the U.S. as the world’s largest economy between 2030 and 2035, possibly even sooner.
However, China’s rise is about more than just impressive growth numbers. The nation has evolved from being the world’s factory to a global leader in technology and innovation. China’s state-led model of industrial policy and investment in sectors like artificial intelligence (AI), electric vehicles, 5G, green energy, and digital transformation positions China as an architect of the next industrial revolution. Its technological ascendancy is a key component of China’s broader ambition to reshape global power structures.
The Yuan’s Growing Role: From Local Paper Currency to Global Digital Power
Another vital component of China’s global strategy is its push to internationalize the yuan (RMB). The U.S. dollar has long dominated global trade and finance, but China is making strides to position the yuan as a key global currency. As the Belt and Road Initiative advances, approximately 30% of trade within BRI countries is conducted in yuan, signaling the increasing financial clout of China. Despite challenges like capital controls and limited convertibility, China has worked to overcome these barriers, gradually allowing more yuan-denominated trade and establishing bilateral trade agreements. Moreover, China is pushing for the digital yuan, a Central Bank Digital Currency (CBDC) that could revolutionize global transactions by offering faster, more secure, and cheaper payment systems. The digital yuan could further diminish the dominance of the U.S. dollar, especially in emerging markets, where the U.S. has sometimes used its currency as a tool of geopolitical leverage through sanctions.
China’s Trade Policies: From Seclusion to Inclusivity
Unlike the protectionist policies seen in the U.S. under President Trump, China has embraced globalization. As the U.S. withdrew from the Trans-Pacific Partnership (TPP), China entered into the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade agreement by population. This move positions China as a champion of free trade, offering developing countries in Africa, Southeast Asia, and Latin America a way to grow their economies without the political conditions often imposed by Western nations.
Territorial Tensions: From Disputed Claims to Diplomatic Solutions
As China’s power grows, so do its territorial disputes. The South China Sea and Taiwan are particularly contentious. China’s territorial claims in the South China Sea overlap with those of several nations, including the Philippines. Despite a 2016 ruling by an international court favoring the Philippines, China has continued its assertive actions in the region, which have drawn global scrutiny.
Taiwan remains one of the most sensitive issues. China considers Taiwan to be a breakaway province, and tensions surrounding Taiwan’s future have drawn in the U.S. and other global powers. The conflict over Taiwan could trigger broader regional instability if not handled carefully. China’s leadership faces the challenge of balancing its territorial ambitions with its broader goal of global influence.
China’s Military: From Internal Defense to Strategic Stability
China’s military strategy has traditionally been defensive, focused on safeguarding its borders and sovereignty. However, its growing military capabilities, particularly in the South China Sea and concerning Taiwan, have raised global concerns. While China’s military is positioned more for defense rather than imperial conquest, its increasing assertiveness means that global powers are closely watching its actions. China must carefully manage its military expansion to avoid alienating allies or escalating tensions with rivals. A misstep could damage its global reputation and hinder its diplomatic initiatives and global strategy.
The Road Ahead: A New Global Paradigm
China’s rise is not just an economic phenomenon; it’s a challenge to the existing global order. Through its initiatives like the BRI, the growing internationalization of the yuan, and its investments in technology, China aims to reshape global trade and influence. However, this ambition faces significant challenges. To succeed, China must balance its growing economic power with military restraint, manage territorial disputes, and project its values to build global trust. The digital yuan could play a central role in positioning China as the dominant economic power in a multipolar world.
Ultimately, China’s transition from building walls to building bridges symbolizes a new era in Chinese foreign policy. If China can effectively navigate these challenges, its ambition to become a global leader may materialize, bringing both opportunities and risks.
***
Josiah Go is chair and chief innovation strategist of Mansmith and Fielders Inc. Want to gain more insights and interact directly with top industry leaders and innovators? Join the annual Mansmith Market Masters Conference, featuring seasoned CEOs, legendary founders, leading innovators, turnaround specialists, and top mentors. It’s an unmatched opportunity to learn from the best and stay ahead of the curve in today’s rapidly evolving business landscape. Save the date: March 11, 2025, at SMX Aura. For more details and to secure your spot, visit www.marketmastersconference.com.
