The Collapse of China’s Grand Strategy and Trump’s China Moment

Oct 30, 2025 - 11:02 Updated: Oct 30, 2025 - 02:00

The Collapse of China’s Grand Strategy and Trump’s China Moment

Commentary

For over a decade, China pursued an ambitious grand strategy aimed at displacing U.S. leadership and reshaping the global order in its authoritarian image.

Under Xi Jinping, Beijing expanded its economic, technological, military, and political footprint—from the Belt and Road Initiative (BRI) to military outposts in the South China Sea—while allying with rogue regimes like those in Russia and Iran to stretch U.S. power thin.

Yet, that strategy is now faltering. The BRI is mired in debt and dysfunction, China’s tech ambitions are stymied by export controls, and its authoritarian allies are unraveling under geopolitical and military pressure. Internally, Xi faces growing dissent and instability within the Chinese Communist Party (CCP) itself.

Facing stagnation, isolation, and a fraying coalition, Beijing may seek a grand bargain with Washington—not as triumph, but as retreat. This would mark an opening for the United States to press for systemic concessions: ending support for adversarial regimes, halting maritime militarization, and rebalancing trade.

A transactional realignment could restore American leverage, reshape the international order, and—if handled deftly—undermine CCP rule itself. For a U.S. leader, particularly one like Donald Trump, such a deal could be framed as a Reaganesque victory for liberty over tyranny—and, perhaps, a Nobel-worthy achievement.

The CCP’s Grand Strategy

Under the tight grip of power and control of the CCP, China’s rise was not only a byproduct of globalization—it was a deliberate grand plan aimed at reshaping the global order. Under Xi, Beijing abandoned the “peaceful rise” narrative and instead embraced the idea of national rejuvenation through great-power competition. Economically, China sought to build alternatives to Western-dominated systems through initiatives like BRI and the Asian Infrastructure Investment Bank.

Beijing made clear its goal: to displace the West as the central node of global trade, finance, and development influence. Beijing also leveraged access to its vast market as a powerful economic tool, using it to pressure developed countries into political concessions or strategic alignment. Simultaneously, it extended massive loans to developing countries, often under opaque terms, creating debt traps that increased Beijing’s leverage over vulnerable, third world governments.

Technologically, through a plethora of mechanisms—IP rights infringement, outright theft, industrial espionage, forced tech transfer and students and scholars in Western universities—China launched an unprecedented effort to achieve self-sufficiency and dominance in critical sectors such as AI, semiconductors, biomedicine, gene modification, space, and quantum computing.

This ambition was never solely about modernization—it was a bid for strategic autonomy and global leverage. By setting standards in emerging technologies and manipulating supply chains, Beijing attempted to carve out a sphere of technological influence independent of the West.

Militarily, China became more assertive than at any time since the Mao era. The modernization of the People’s Liberation Army—with a particular focus on naval expansion, missile systems, cyber capabilities, and space assets—was aimed at displacing U.S. military primacy in the Indo-Pacific and securing Beijing’s regional objectives by force if necessary.

Beijing quietly encouraged Russia’s invasion of Ukraine, seeing the war as an opportunity to strain Western military and economic resources while undermining the security architecture led by the United States and its allies. At the same time, China deepened its strategic partnership with Iran, providing economic and diplomatic support that emboldened Tehran’s proxies and further destabilized the Middle East. In the South China Sea, China built and militarized artificial islands in defiance of international rulings, while escalating its pressure campaign against Taiwan through both gray-zone coercion and explicit threats. This multi-front posture directly challenged the long-standing U.S. doctrine of being able to fight and win in two major war theaters simultaneously—a Cold War-era strategy.

Politically, China promoted an alternative model of governance centered on authoritarian control, state-directed development, and sovereignty over individual rights. Through institutions like the Shanghai Cooperation Organization and its influence at the United Nations, China worked to reframe global norms—pushing back against Western liberal ideals and casting its own system as a legitimate and effective path to modernization.

Beijing lent diplomatic cover to autocratic regimes and deepened strategic partnerships with Russia and North Korea, supporting their challenges to the Western-led international order. It also strengthened ties with Iran, backing Tehran’s regional ambitions and its network of proxies, further complicating Western efforts to maintain stability in the Middle East. By exporting surveillance technologies and advancing proposals for “cyber sovereignty,” China sought to legitimize digital authoritarianism and curtail the open internet.

In doing so, Beijing did not simply reject the existing global order since WWII; it aimed to redefine it in its own beliefs and ideology. The CCP’s ambition was not just to protect its rule at home but to make the world safer for autocracy abroad.

Failure Everywhere

However, since the end of the COVID-19 pandemic, Beijing’s grand vision of a China-centered global infrastructure network is beginning to fray. Launched with great fanfare in 2013, BRI promised to forge a new era of connectivity, development, and soft power. But over a decade later, many of the flagship projects lie unfinished, mired in debt distress, corruption scandals, or local backlash.

From Sri Lanka’s Hambantota Port to Kenya’s railway to nowhere, BRI has become emblematic not of Chinese strategic foresight, but of an overreach that China can no longer afford. As economic growth slows and the shadow of depression looms at home and over recipient countries demanding debt relief or simply walking away from unsustainable projects, China finds itself grappling with the costs—economic, diplomatic, and reputational—of its once-vaunted initiative.

The cracks in BRI reveal a deeper miscalculation: Beijing treated infrastructure as strategy, but underestimated the politics of the ground it sought to pave. Many BRI recipient countries, initially lured by cheap loans and promises of modernization, are now confronting the downsides of opaque contracts, poor environmental safeguards, and sovereignty concerns. The recent retreat of Chinese lending, and Xi’s shift to a “smaller and smarter” BRI, signal tacit acknowledgment that the original model is no longer tenable.

On top of this is the CCP elites’ looting and grafting of funds under the banner of BRI. Far from cementing China’s global leadership, the BRI now serves as a cautionary tale—one in which ambition outpaced capacity and influence was squandered by indifference to the very governance standards Beijing sought to sideline.

Access to China’s vast consumer and industrial markets was a strategic lever, which Beijing used to compel political concessions and shape the foreign policies of developed world. For years, the promise of trade, investment, and market entry silenced criticism of China’s domestic repression and muted resistance to its geopolitical ambitions.

But that leverage has begun to erode. China’s slowing economy, aging and declining population, and shrinking labor force have diminished the allure of its market, particularly for companies and countries now wary of supply chain dependence and political risk. Even smaller nations, once seen as easy to coerce, have begun to push back. Latvia, for example, withdrew from China’s “17+1” cooperation framework in 2022, citing economic underperformance and political divergence. What once looked like a gravitational pull now appears more like a fading magnet—still influential, but no longer irresistible.

China once appeared poised to dominate the heights of the 21st-century tech economy. State-led initiatives like “Made in China 2025” and massive investments in AI, semiconductors, and quantum computing signaled Beijing’s ambition to reduce reliance on foreign technology and set global standards. But that vision is increasingly at odds with geopolitical reality. U.S.-led export controls, especially in advanced chipmaking equipment, have exposed China’s deep dependence on foreign know-how. Despite pouring billions into domestic alternatives, China still lags behind in critical sectors like cutting-edge semiconductors, where breakthroughs cannot be bought or forced by fiat. The gap is narrowing more slowly than Beijing had hoped, and a technological iron curtain is beginning to rise.

For years, the West underestimated the scope of China’s technological ambitions, viewing Beijing more as a market participant than a strategic competitor. That complacency shattered as evidence mounted that China’s rise in key sectors—from 5G and artificial intelligence to advanced manufacturing—was not merely commercial, but deeply geopolitical.

The shock came in waves: the global expansion of Huawei, revelations of intellectual property theft, and the state-orchestrated drive for self-sufficiency under “Made in China 2025.” What had once seemed like industrial policy suddenly looked like techno-nationalism. In response, the United States and its allies began reorienting their policies—tightening export controls, reshoring supply chains, and investing in their own innovation ecosystems. The West has belatedly come to see that technological leadership is not just about economic competitiveness, it is about the balance of power in the 21st century.

Compounding the challenge are China’s own structural constraints. A political environment that punishes dissent and privileges loyalty over innovation stifles the kind of open scientific culture on which true technological leadership depends. Private tech giants like Alibaba and Tencent, once global success stories, have been reined in by regulatory crackdowns that prioritize control over competitiveness. Meanwhile, global trust in Chinese tech has eroded, as countries from Europe to Southeast Asia grow wary of surveillance risks and strategic dependencies. China may still become a formidable tech power—but the dream of global dominance is slipping away, undone by external resistance and internal contradictions.

China’s strategy of stretching U.S. power by encouraging simultaneous conflicts across multiple regions has begun to falter as well. The war in Ukraine, which Beijing quietly backed as a strategic distraction for the West, has proven costly and increasingly unpopular within Russia itself. Widespread resistance to military mobilization—manifested in draft dodging, mass emigration, and localized protests—exposed the limits of the Kremlin’s control and the fragility of its war effort.

Russia’s failure to achieve a quick victory, its staggering battlefield losses, and mounting economic strain have weakened Moscow’s global stature rather than reinforcing it. What Beijing viewed as a low-cost opportunity to divide and exhaust the West instead became a long, grinding conflict that drained one of its key partners and hardened European resolve against authoritarian adventurism.

In a recent interview, Chinese Foreign Minister Wang Yi admitted that China was very much afraid of Russia losing the war in Ukraine, as that would result in the United States redirecting its attention and focus on communist China. It was reported that China even devised contingency plans to support the Russian Communist Party to control eastern Russia, in the event Russia completely collapses on the Western front and becomes too weak.

A similar erosion has unfolded in the Middle East. Bashar al-Assad, long sustained by Russian and Iranian backing, fled to Moscow as his regime collapsed. Iran’s regional posture suffered severe blows as well. Hamas’s military infrastructure in Gaza is being systematically dismantled, while Hezbollah endured sustained Israeli retaliation that virtually destroyed offensive capabilities. In a historic escalation, Israel—backed by U.S. intelligence and airpower—struck deep into Iranian territory, targeting key military and nuclear assets. Tehran, faced with the prospect of broader war and unable to count on an effective deterrent response, basically capitulated to avoid further escalation.

Far from encircling or overwhelming the West, Beijing’s web of authoritarian allies and militant proxies is fraying—leaving China more isolated, its leverage reduced, and its strategy of distraction increasingly untenable.

Last Card to Play

With its authoritarian partners faltering and its strategy of multipolar disruption backfiring, Beijing now faces a narrowing set of options. The last card it may be willing to play is a strategic recalibration: distancing itself from its embattled allies and seeking a thaw with Washington.

Quiet signals suggest that China is already weighing the costs of continued alignment with pariahs like Russia and Iran, whose wars and repression have become liabilities rather than assets. A transactional pivot—selling out these partners in exchange for reduced tensions with the United States and restored access to cutting edge know-how and tariff reductions—could offer Beijing short-term relief from economic stagnation.

But such a move would come at a steep price: undermining the very alternative order China spent the last decade trying to build. If Beijing chooses rapprochement, it will do so not from a position of strength, but out of recognition that its grand strategy has failed—and that survival now depends on pragmatism rather than power. Yet the real obstacle in this direction is the CCP itself. It may have to give up its decades-long rhetoric of communist and socialist ideals and its propaganda of hostility towards freedom and democracy, and that could even mean the CCP giving up its grip on power.

Recent developments within China’s political and military leadership have raised serious questions about Xi’s hold on power. A wave of unexplained purges targeting senior officials—many of them handpicked loyalists in both the CCP and the People’s Liberation Army—has signaled deepening instability at the core of the regime. In the People’s Liberation Army Aerospace Force (PLAAF), viewed as vitally important, the entire top leadership was cleansed and replaced.

These moves, unusually opaque even by Beijing’s standards, suggest growing discontent within the elite over China’s economic slowdown, diplomatic isolation, and the mounting costs of Xi’s hardline foreign policy. As internal fractures widen, the likelihood of a strategic reset—a “grand bargain” with the United States involving concessions in exchange for economic relief—has increased. Such a pivot would represent a sharp departure from the combative posture that defined Xi’s tenure. But with trusted cadres removed and his authority quietly eroding, Xi may soon face a stark choice: retreat from confrontation or risk being pushed aside by a party no longer confident in his leadership.

Opportunity for a Grand Bargain

Trump would likely frame this grand bargain as a Nixonian “peace through strength”—offering China economic survival in exchange for geopolitical retreat and an end to the communist rule. Trump (or any U.S. leader) should not seek vague promises but demand verifiable, strategic realignments that reshape the balance of power in favor of the United States.

Trump should demand that China formally and practically withdraw support—economic, military, and diplomatic—for regimes destabilizing U.S. interests. This includes halting dual-use tech transfers and cutting military cooperation with Russia, Iran, and North Korea. Quiet Chinese support has helped sustain these regimes; removing that lifeline would isolate them further.

China’s military outposts in the South China Sea and Indian Ocean are a direct challenge to U.S. naval supremacy. Trump should make any deal contingent on the draw down or demilitarization of these artificial islands and a formal reaffirmation of freedom of navigation under international law. These steps would blunt China’s maritime expansion and reassert U.S. control over key sea lanes.

Trump should also demand a halt to Chinese aggression near Taiwan and block Beijing’s export of surveillance tech. The United States must defend both territory and digital freedom.

On trade, Trump should demand three core concessions. First, a rollback of China’s subsidies in sectors like EVs, semiconductors, and steel. Second, binding commitments to end forced tech transfers and protect U.S. intellectual property. Third, a rebalanced trade deal with enforceable targets to boost U.S. exports—especially in agriculture, energy, and manufacturing.

Such a grand bargain and concessions are unlikely to take place if China remains to be a hard-core communist state. Even the most loyal CCP members nowadays do not really believe in communism anymore, let alone the general public in China who have suffered so much in the past 75 years of communist rule. Overwhelming economic and technological pressure from the United States may lead to a regime change or regime transformation. This may lead to the abandonment of the rigid CCP party-state structure, similar to what happened in the Eastern European countries in the 1990s.

Trump has expressed his disdain of communism and socialism numerous times in his speeches in Poland, the UN, and his many rallies during his electoral campaign. If he could use the economic and geopolitical leverage to undermine the most powerful communist state in the world, it would parallel Ronald Reagan’s contribution to the collapse of Soviet Union dominance in Eastern Europe.

A grand bargain between the United States and China could change the course of the 21st century. It would pull the world back from the brink—cooling conflicts, stabilizing economies, restoring a sense of order in a time of chaos, and bringing liberty and freedom to the entire world.

For America, it would mean strength without endless wars. For China, a chance to rejoin the global system without humiliation and the burden of communism. And for millions caught in the crossfire of proxy battles and trade wars, it would offer something rarer than power: peace. If Donald Trump were to broker such a deal—defusing great-power rivalry and resetting global equilibrium—he wouldn’t just earn a place in history. He’d deserve a Nobel Peace Prize.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.