The Danger of Getting China Wrong

China is not just a competitor; it is an enemy. Forgetting that puts the US at risk. American investors and consumers must stop funding China’s global ambitions.

After the collapse of the Soviet Union, U.S. officials believed communism had run its course. They hoped that, having witnessed the failure of misguided communist policies, other countries would abandon the system. In particular, they expected that China, which was starting to liberalize its economy, would also liberalize its government.

U.S. leaders believed that by engaging with China, expanding trade and investment, and bringing it into global institutions like the WTO, they could encourage China to become an open, democratic society. However, while Beijing embraced economic growth, the Chinese Communist Party (CCP) viewed opening up as a threat to its power. New ideas could undermine the CCP’s grip on the country.

This fear was clearly demonstrated in 1989, when Deng Xiaoping—the same leader who liberalized China’s economy—ordered the massacre of students at Tiananmen Square, sending a clear message that economic reforms did not mean social or political freedom.

Understanding that the quickest route to innovation and national wealth was through private enterprise, China passed its first private company law in 1988. By 2001, entrepreneurs were no longer seen as class enemies and were allowed to join the Communist Party. However, the 1993 Company Law mandated that private companies establish a Communist Party cell within their organization. These party cells enable the Chinese Communist Party (CCP) to retain influence over private enterprises, monitoring management decisions and ensuring that company activities stay aligned with party principles.

Under Xi Jinping, the CCP has rolled back much of the social liberalization that had slowly emerged since the economy’s opening in 1978. Leveraging advanced technology, Xi has transformed China into a surveillance state, where the CCP can monitor every email, social media post, and message and track citizens on the streets through a vast network of security cameras, payment apps, mandatory registrations, and card swipes. Worse still, under Xi’s leadership, the CCP is exporting this surveillance model to countries around the world.

Beyond heavy surveillance efforts, Xi Jinping’s initiatives are geared toward displacing the United States economically, militarily, and diplomatically by 2049. His vision for the “Great Rejuvenation of the Chinese Nation” aims to return China to its historical place as a global powerhouse by mid-century. A core part of this strategy is the rapid modernization and expansion of the People’s Liberation Army (PLA), transforming it into a top-tier military force capable of asserting Chinese interests globally. This push includes advanced cyber and space capabilities, cutting-edge missile systems, and a stronger navy to project power across the Indo-Pacific. Through Military-Civil Fusion, China channels civilian innovation directly into military tech, making the PLA agile and more capable.

The “Blue Dragon” strategy is China’s blueprint for naval dominance, aimed at securing control over contested waters in the Indian Ocean and Western Pacific. This strategy goes beyond surface presence; it focuses on building a formidable underwater force, with advanced submarines, underwater drones, and anti-submarine capabilities to monitor and control critical sea lanes. By bolstering its reach below the surface, China strengthens its grip on these waters, reinforcing claims over key maritime areas. The artificial islands in the South China Sea are part of this strategy—militarized with airstrips, radar, and missile systems, these installations serve as outposts to assert control over the region’s valuable resources and shipping routes.

But China’s territorial ambitions don’t stop at sea.

Along its Himalayan border with India, Beijing has ramped up military infrastructure and built roads into disputed territories, leading to standoffs like the violent 2020 clash in Galwan Valley. Similar tactics are unfolding in Bhutan, where China has constructed settlements and roads to push its claims. Meanwhile, China’s expanding economic grip in Central Asia, particularly through infrastructure projects under the Belt and Road Initiative, allows it to exert pressure on these regions and gain leverage in border areas. The “Blue Dragon” strategy is one part of a broader campaign to extend China’s influence over both land and sea, as it seeks to assert power in ways that challenge the sovereignty of neighboring nations.

Economically, Xi’s vision is powered by major initiatives like the Belt and Road Initiative (BRI) and “Made in China 2025.” The BRI aims to anchor China as an economic center by building infrastructure networks that establish dependencies across Asia, Europe, Africa, and Latin America, securing Chinese influence through economic leverage.

Meanwhile, “Made in China 2025” drives toward self-sufficiency in high-tech industries, reducing reliance on foreign tech and making China a leader in areas like AI, semiconductors, and robotics. These goals tie into Xi’s territorial ambitions: seizing Taiwan, controlling the South China Sea, and asserting disputed claims along its borders with India and Russia. Together, these initiatives signal China’s intent to reshape the global order, challenging U.S. dominance and advancing Xi’s vision of a powerful, globally influential China.

Executing these initiatives and achieving Xi’s vision for global domination isn’t cheap. Right now, American investors and consumers are directly financing China’s expansion by purchasing Chinese goods and allowing China access to U.S. capital markets. China is not just a competitor; it is an enemy, and continuing to fund the nation most likely to go to war with the United States is a grave error.