What China Wants?
With many commentators eulogizing the liberal international order that had hitherto underpinned US hegemony, some are wondering if President Donald Trump has given his Chinese counterpart, Xi Jinping, a gift. While Trump prizes unpredictability, Xi aims to position China as a force for global stability. Thus, there is a widespread assumption that China will rush to fill the vacuum left by an increasingly nationalist and isolationist United States.
But the Chinese leadership has no interest in filling America’s shoes. Attempting to do so could cost China dearly just when it is undertaking a broader economic reorientation at home. The world may be tired of US interventionism – and, now, of Trumpian aggression – but that does not mean it is ready to welcome an abstemious superpower. China has studiously avoided becoming involved in major crises beyond its immediate neighborhood. Though it has proposed global initiatives on “development,” “security,” and “civilization,” and articulated a vision of multipolarity in which all countries are treated equally, its efforts to realize these goals have not gone beyond economic statecraft.
While foreign commentators debate what China’s vision entails – with some describing it as a potentially benevolent hegemon, and others as a malevolent one – Chinese authorities and intellectuals are more immediately concerned with weathering the storm that Trump has unleashed.
China’s Core Interests
Independent commentators and Chinese leaders alike have long pondered the same question: What are China’s core national interests? Viewed from outside, the answer seems straightforward: to replace the US as global leader. But pursuing that role may contradict other core interests, such as maintaining regime legitimacy and security, orchestrating a continuous rise in living standards, and reunifying Taiwan with the mainland. These goals might best be served by maintaining a cold peace with the US, rather than embracing conflict with it.
Having watched the US, China knows all too well that being a global superpower would inevitably draw it into regional conflagrations that it would prefer to avoid. But China also knows that it has benefited massively from the relatively stable world economy that the US and its allies helped bring about.
China needs to retain enormous amounts of resources and manpower domestically to tackle its biggest challenges. Chinese leaders must manage an economy that is no longer driven primarily by property development and exports, while preparing for the possibility that one of its largest trading partners could descend into total isolation. Trump’s “Liberation Day” tariffs and escalatory duties in response to Chinese countermeasures were a wake-up call. Whatever happens in the trade war, China urgently needs to rebalance its economy by stimulating greater domestic demand.
While Chinese leaders have long acknowledged the need for such a rebalancing, they have been slow to follow through with the necessary policies. Public messaging notwithstanding, they have continued to prioritize industrial output over living standards, and capital investment over consumer spending. But the prospect of losing one of its biggest export markets should change this calculation. There is no longer any excuse for delay.
Similarly, China has an interest in building resilient supply chains for critical technologies in order to circumvent US chokepoints. A significant share of national resources has already been redirected toward promoting domestic innovation. With the Sino-American rivalry intensifying over the past decade, Chinese leaders have come to regard domestic innovation as a strategic necessity. On several occasions, Xi has warned publicly that China is at the mercy of advanced economies for critical inputs such as advanced semiconductors and aircraft engines. “Although China’s scientific and technological undertakings have made significant progress,” he explained last June, “its original innovation capabilities are still relatively weak, with some key core technologies being controlled by others.”
Beyond boosting domestic innovation, China is eager to seize opportunities to set the global governance agenda for emerging technologies. Its recent successes in AI – most notably DeepSeek’s release of low-cost models that rival those from top US developers – have created a strong impetus for China to amplify its voice. China’s message – that a handful of rich countries should not be able to monopolize the technologies that will determine everyone’s economic future – undoubtedly resonates with many around the world.
Neighborhood Watch
Chinese strategists have long stressed that the purpose of foreign policy is to create an external environment that is conducive to domestic economic development. This conservative maxim dates back to Deng Xiaoping, and it has become the current leadership’s mantra for navigating today’s tumultuous international environment. Again, filling a sudden void in global leadership is not necessarily aligned with this objective.
For example, during the post-Liberation Day staring contest with the US, China convened an impromptu gathering of the all-powerful Politburo and Chinese ambassadors stationed abroad. The purpose was to assess China’s relations with its neighbors, and the stature of those in attendance spoke to the sense of crisis that had swept through the country’s top leadership. More to the point, the meeting confirmed that China’s strategic orientation remains focused on its own region – not the global context.
Among the most important regional partners is Russia. China remains fully committed to maintaining strong ties with the Kremlin, viewing Russo-Chinese alignment as a geographical and strategic necessity. The two countries’ 4,209-kilometer (2,616-mile) land border gives China more than enough reason to work with the Kremlin. China’s ultimate focus is not Russia but its long-term rivalry with the US. An axis with President Vladimir Putin’s regime might well offer a workable (if imperfect) solution to the containment strategy that America has been pursuing against China.
Likewise, China has been de-escalating tensions with India, another large, nuclear-armed neighbor. Both know that the structural and historical strains on their relationship – characterized by an obvious power imbalance and mutual mistrust – will not be easily eliminated. But both also know that predictable, stable ties will yield big benefits over time, especially in the context of a new multipolar order.
“Orderly Multipolarity”
Beyond managing relations with its immediate neighbors, China has sought to mobilize the Global South behind reforms to multilateral institutions. When Chinese leaders and diplomats speak of ushering in an “orderly multipolarity,” they are envisioning an international order in which the non-Western world has much more clout. Hence, China is a strong advocate of the recent BRICS expansion, and of proposals to redistribute voting shares within Western-dominated international financial institutions.
China has also sought to shape the agenda at United Nations-affiliated institutions where the US historically has had less influence, such as at UN Trade and Development and the South Centre. In these cases, it can assume a limited leadership role without directly confronting the US and the rest of the G7. Again, China’s goal is not to overthrow the US-led liberal international order completely, but rather to advance its own national interests pragmatically.
In this context, China does have a foreign-policy interest in subtly countering US influence in the developing world, which is why it builds large-scale infrastructure and addresses long-ignored development needs there without making any demands about democracy, human rights, and accountability. Instead of offering security guarantees, China offers roads and bridges. In exchange, it can secure access to critical raw materials and open new markets for its state-owned enterprises and private companies at a time when the US and Europe are closing their doors.
But while China is keen to pursue wide-ranging economic statecraft in developing countries, it remains reluctant to engage with complex security matters elsewhere in the world. In many foreign theaters, the US is still the central player – for better or worse, and usually by default.
To be sure, China did intervene to broker a modest rapprochement between Iran and Saudi Arabia, and its Global Security Initiative aims to foster international cooperation in “areas such as counter-terrorism, cybersecurity, biosecurity, and emerging technologies.” But in the case of the Russia-Ukraine and Israel-Hamas wars, it has avoided taking direct responsibility, let alone providing any security guarantees. Of course, China’s self-proclaimed neutrality on the war in Ukraine has not gone unchallenged. According to Ukrainian and EU officials, China has helped Russia evade sanctions and provided it with dual-use (military/civilian) technologies. And in Gaza, China has criticized the US for supporting Israeli Prime Minister Binyamin Netanyahu’s agenda of continuing the war. But unlike Iran – which China relies on for oil – these other flashpoints have been kept at arm’s length.
China’s reluctance to broker peace in foreign conflicts might disappoint some of those countries with which it wants to engage. But it is betting that it can make the right noises and advance its interests vis-à-vis the Middle East, Africa, or Ukraine without getting dragged into fraught negotiations. Its comfort zone is still that of a commercial player, not that of strategic planner or a challenger to the US-centered security architecture.
No Pax Sinica
Looking ahead, China would face three big challenges in pursuing even partial or limited global leadership. First, given America’s accelerated withdrawal from international affairs, China might struggle to sustain its commercial engagement with many parts of the world. After all, the US wants to impose drastic costs on those who do business with China, and it may well get its way.
Second, China cannot avoid engagement in dangerous security situations forever. Sooner or later, it will have to develop a truly global foreign policy. In fact, simply putting its own Global Security Initiative into practice would require it to do much more heavy lifting, not only in setting the agenda but also in terms of deploying security personnel and resources. How China approaches this challenge will depend on how others perceive it and respond to its bids for limited international leadership. America may be retreating, but that does not mean it will sit idly by and watch China try to increase its own influence.
Third, China still needs to orchestrate a domestic economic rebalancing – a process that will have enormous global consequences. Shifting from export-led growth to greater domestic consumption will take years, and the push to rebalance may run up against China’s ambition to remain a global manufacturing powerhouse. The latter objective is already causing tensions with Europe and some developing countries whose domestic manufacturers are struggling to compete with Chinese national champions (such as the electric-vehicle maker BYD). Countries may abhor US tariff coercion, but they are also wary of Chinese competition. Chinese leaders will need to “read the room” and proceed accordingly.
Thus, even as its economy continues to grow, China will remain a largely self-centered and reluctant superpower. Unlike the US, its domestic political economy calls for a more restrained foreign policy, focused primarily on its immediate neighbors and commercial opportunities in the Global South.
As the world grapples with the decline of US power and the shift toward multipolarity, China will increasingly become the center of gravity in the global economy. The rivalry between a political and military superpower and an economic one will be dangerous for everyone. Both must tread carefully to prevent economic warfare from escalating into a conflict that all would regret.
*Yu Jie is a senior research fellow on China in the Asia-Pacific Program at Chatham House.