China’s Trade War Strategy: How Xi Jinping Uses Autocracy, Fear, and Innovation to Compete with the West
Apr 18, 2025
48:00
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Quick takeaways
Xi Jinping's strategic use of autocracy, innovation, and economic pain is reshaping China's role in the global trade landscape.
The trade war reveals profound ethical dilemmas as nations weigh economic engagement with China's human rights violations and authoritarian practices.
Deep dives
China's Economic Transformation and Global Influence
China's entry into the World Trade Organization (WTO) in 2001 was initially viewed as a pathway to democratization through economic prosperity. However, the expected correlation between a rising middle class and the demand for democratic governance did not materialize; instead, China has become an example of a successful authoritarian regime with a thriving economy. This economic growth has raised concerns about the possible exportation of China's political model to other nations, particularly as the U.S. retreats from its established international order. Analysts now scrutinize how China's economic strategies, including tariff responses and trade relationships, will shape its diplomatic interactions and influence in global markets.
The U.S.-China Trade War and Its Implications
The U.S.-China trade war has introduced significant volatility in international trade, with both countries imposing tariffs that have disrupted established economic ties. Events like Donald Trump's tariffs on Chinese goods have led to retaliatory measures from China, raising questions about the long-term impacts on global supply chains and relationships with other trading partners. There are fears of China redirecting its goods meant for the U.S. towards Europe, causing economic unease among European nations worried about trade imbalances. This trade conflict influences broader geopolitical considerations, as countries reassess their dependencies and alignments in an evolving economic landscape.
China’s Innovations and Global Technology Concerns
China's advancements in technology, particularly in the realm of artificial intelligence (AI), challenge the long-held belief that democratic systems are inherently more innovative than authoritarian ones. The emergence of competitive technologies, despite U.S. efforts to restrict access to advanced components, signals China's capacity to innovate and adapt. As countries grapple with their trust in Chinese technology, there is growing recognition that Chinese innovations may pose not only economic competition but also national security risks. The situation complicates international policy as Western governments evaluate their engagement with China's burgeoning tech industry amidst rising anxieties about espionage and surveillance.
Human Rights and China's Global Narrative
Concerns surrounding human rights within China have intensified as the Communist Party enforces policies that suppress dissent and control narratives both domestically and abroad. Reports of bounties on Hong Kong activists in exile exemplify the lengths to which the Chinese government will go to intimidate dissidents and maintain its grip on power. The international community now faces a dilemma in balancing economic interests with the ethical implications of engaging with a state that utilizes coercion against its citizens. This reality raises significant questions about how nations will respond to the growing pressure from China while trying to uphold democratic values and support human rights globally.
Hosts Nina dos Santos and Owen Bennett-Jones analyze the global fallout after Donald Trump plunged America and the world into a trade war with China. David Rennie, The Economist’s geopolitics editor and former Beijing and Washington D.C. bureau chief, joins the podcast to unpack how Xi Jinping is playing the long game and playing to win.
In this episode, we explore Xi’s high-stakes strategy in the global trade war.
From embracing economic pain to fostering innovation under autocracy, China is challenging Western dominance on every front. However, as the controversy over British Steel demonstrates, Beijing’s drive to exert control often at the expense of freedoms abroad—risks alienating future partners.
In the second half, activist Chloe Chung shares her personal story of falling afoul of the Chinese authorities. A pro-democracy campaigner, Chloe awoke in December to news that police in Hong Kong had issued a HK$1 million ($128,000; £102,000) bounty for information leading to her capture abroad.
With democracy under pressure, this is more than just a trade war—it’s a battle for the future of the global order.
