The leader of the emerging economic superpower is welcoming the planet lord at home today. With Presidents Xi and Trump in Beijing, some evidence of the evolving adversarial relationship between them sheds light on what will be on the table behind closed doors.
In the last 25 years, China has developed into the rival of the US, using the economy as a weapon. The wars in Ukraine and the Middle East have upset global balances, highlighted the limits of the US while creating challenges and opportunities for Beijing, whose appetites Trump tried to “tame”, without spectacular results in the “tariff war”.
Economic power
20 years ago China had almost 1/6 the economic power of the US and was ranked fifth in the world ranking behind Japan, Germany and the UK. China’s nominal GDP was then $2.3 trillion and the US $15 trillion.
The US remains by far the largest economy on the planet with a projected GDP for this year of over 32.3 trillion but China is steadily closing the gap as it is forecast to rise to 20.8 trillion. Meanwhile, in terms of purchasing power, China has held first place since 2014.
Debt
The USA holds a not-so-enviable first place, that of the most indebted country in the world. The US government is now paying its creditors almost $3 billion a day in interest alone, as the debt recently topped an astronomical $39 trillion (115% of GDP). The Chinese government last year paid an average of almost $500 million a day in interest while its debt is close to $6 trillion (94% of GDP).
According to international houses and analysts, in reality the Chinese debt is larger, as a significant part of it is burdened by regions and other entities while it is calculated in a different way. At the same time, China holds a portion of the US public debt, about $760 billion. In recent years, amid the trade war, China has curbed purchases of US Treasuries and is estimated to hold about 2% of US debt.
Trade
25 years ago the US was the largest exporter in the world ($730 billion) while China was in fourth place ($266 billion). Today China is in first place with exports worth 3.5 trillion dollars while the US follows with 1.9 trillion. In 2001 only 30 countries had greater trade relations with China than with the US. Today 145 countries trade more with China than with the US. In just one year, in 2024, China’s total trade surplus will reach $1 trillion.
The US trade deficit with China had soared in 2005 by 25% from the previous year, reaching $201 billion. The upward trend continued until 2022 when the deficit reached 580 billion, while in the last three years it has been decreasing and last year it returned to the 20-year levels (202 billion).
Energy
China consumes more energy than any other country in the world. According to data compiled by Al Jazeera, China of 1.4 billion people consumed nearly 48,500 terawatt hours (Twh) in 2024, 80% of which was produced by fossil fuels, much of it coal.
In the same year the USA of 350 million people consumed almost 26,500 Twh of which 80% came from fossil fuels, mainly oil. However, as the network notes, the Chinese are systematically and intensively betting on green energy, investing in the same year almost 300 billion dollars in renewable sources, while the US invested about 100 billion.
Technology
In recent years, China has made leaps in cutting-edge technology, electric cars and artificial intelligence, but the US maintains a lead in both AI and semiconductor models. But the Chinese have in their hands the great asset of rare earths that are a prerequisite for the mass production of critical systems and spare parts for civilian and military use (from electric batteries and smartphones to turbines and semiconductors).
China is estimated to have the largest reserves of the 17 elements at 44 million tonnes (more than half of the world’s known reserves), while the US is in seventh place with just 2 million tonnes. In addition, Beijing has a dominant role in the processing of these materials.
Defense
The US maintains its privileged position of power thanks also to its huge defense expenditures. But China is also a nuclear power while it is constantly strengthening its conventional forces by projecting power in the Pacific Ocean. The Chinese have (and are building) more warships than the Americans, but the issue is not only quantitative, it is also qualitative. The U.S. has military forces that have been tested in operations almost across the length and breadth of the earth while the Chinese military is confined to high schools without having seen real combat conditions for decades.
As for nuclear weapons, against the American arsenal of 4,000 active nuclear warheads, China more than doubled its own to 600 in the last 5 years. Beijing has set a goal of acquiring 1,000 nuclear warheads by the end of the decade while developing a new generation of intercontinental ballistic missiles as a “deterrent”.
