Something puzzling is unfolding on the world stage. The U.S. administration has thrown the international community into disarray through reckless and erratic behavior. It has undertaken unilateral military actions, rattled the global economy, upended alliances, and treated long-standing norms as irksome obstacles. China, meanwhile, has neither launched fierce denunciations of the United States nor presented itself as a "responsible alternative." There is a hidden intention behind Beijing's conduct.
During a recent stay in China, I discovered something striking. Many Chinese view the war America is waging in the Middle East differently from past major conflicts. During the Iraq War, Chinese strategists appeared to relish watching the United States sink into a "desert quagmire." This time, however, most officials, think-tank scholars, and business leaders were bewildered and concerned by Washington's chaotic policies. They were steeped in deep uncertainty over what President Donald Trump might do next.
This reaction reflects China's interests. China needs the oil and natural gas shipped through the Strait of Hormuz. Nor is China a "rogue state" like Russia. Beijing knows well that its growth depends on open sea lanes, properly functioning markets, and stable "rules of the game." Chinese officials repeatedly invoked President Xi Jinping's remarks, arguing that "the United States is pushing the world back into a jungle where the strong prey on the weak." This is less a moral critique than a strategic anxiety. In a globalized world, a dominant hegemon turning entirely unpredictable is bad news for everyone. Chinese officials insist their country is not trying to replace the United States. Corporate CEOs stressed that the American economy remains more innovative. Even as Washington has turned its back, Chinese leaders still hold Silicon Valley, American universities, and the scale and sophistication of the U.S. market in high regard.
China's strategy is to seize this crisis as an opportunity to expand its economic power and global influence. Beijing is concentrating more investment in the advanced technologies that will define the next era of growth: green energy, robotics, industrial-grade artificial intelligence (AI), advanced manufacturing, and services. In some of these areas, China's dominance is already immense. China produces 80 percent of the world's solar panels, about 60 percent of wind turbines, and 75 percent of batteries, and supplies 70 percent of the world's electric vehicles.
China has used three previous economic shocks to strengthen its dominance. During the COVID-19 pandemic, Chinese firms supplied medical equipment to the world in vast quantities, flaunting their relief capacity. In the AI era, China has become the hub for building the physical infrastructure required for data centers, including metals, electrical equipment, batteries, cooling systems, and industrial components. And now, the Iran war has touched off a global scramble to secure new sources of energy. Here too, China is the "indispensable power." It dominates the green technologies — solar, wind, batteries, and electric vehicles — that countries need to reduce their reliance on imported oil and natural gas.
The Chinese government is converting these industrial strengths into influence. By providing financing, infrastructure, and supply chains, it is locking other countries into Chinese-made systems. Beijing is showing governments around the world that while the United States is mercurial, China offers reliability in equipment, credit, and continuity. The fact that the Chinese government financed port development projects in 90 countries worldwide from 2000 to 2025 speaks to this.
China's next move is critical. Xi recently laid bare China's ambition to make the yuan a global reserve currency. A former Chinese official explained how China would steadily expand its bond market and financial infrastructure so that investors would have an alternative if they came to view the United States as risky. Such developments suggest the possible erosion of the "exorbitant privilege" the United States has enjoyed by holding the world's reserve currency. If that privilege weakens, the U.S. government and households will no longer be able to borrow enormous sums at low cost as before.
Even at this moment, China is working to burnish its international reputation. If the balance of power continues to shift in China's favor and the United States keeps losing the influence it once wielded in the international community, China may step forward to claim the role of the world's sole leading power. By then, the United States will have no recourse left.
