Why China Can't Beat America
In a Nutshell
America maintains dominance through maritime trade networks, technological leadership, and the ability to cut off adversaries from global resources, while China faces strategic vulnerability despite its land-based power. Trump has accelerated the shift from institutional to personal politics and disrupted the post-WWII order, but America continues leading the information revolution with AI and tech companies that no other nation can match. The core strategic reality remains unchanged: continental powers like China cannot ultimately defeat the English-speaking maritime system that has prevailed against France, Germany, and the Soviet Union over 300 years.
These notes were generated by AI and may contain inaccuracies.
China is a land-based continental empire that believes it can match the technological and therefore military power of other powers without the need for political liberalism and anarchic democracy. America continues dominating the latest technologies. Xi Jinping recognizes that in any conflict with the United States, China faces the risk of being cut off from many of the raw materials and markets its economy needs.
The American Peace developed after 1945 and renewed in 1990 at the end of the Cold War is going through a real crisis. However, American power itself is not in crisis. Thanks to the information revolution and extraordinary rise in productivity, the United States continues moving forward. The networks, institutional relationships with Europe, and ways of dealing with the world may collapse, but the United States as a power persists.
The World Trade Organization represented a rules-based trading system, but now tariffs are imposed according to what President Trump sees fit. America used to exercise power through institutions such as NATO and the United Nations. Since World War II, American foreign policy was based on being consistent and predictable, with clear red lines that others could understand and live with. Commitments made in 1955 remained in place unless announced with great fanfare that they were changing. Trump believes he maximizes gains by being completely unpredictable and crossing lines that previous presidents would not have crossed, such as threatening to double tariffs if countries do not raise their defense budgets.
Trump discovered one of the secrets of power in the modern world: the ability to transform fame into power and drama into power, making him completely free to act. If you lie enough, the marginal cost of your ten thousandth lie becomes nothing, whereas the marginal cost of your first, second, or third lie is very high. All the usual restrictions imposed on political figures, such as reputation, do not come at a price. President Clinton discovered that shame only matters if you allow it. Shame is a feeling that exists only in the minds of others. Many thought when the Monica Lewinsky affair came out that Clinton would have no choice but to resign, but he realized that if you continued to move forward step by step, you would get over it. The dogs bark but the caravan moves on. Trump has applied this concept on an industrial scale.
The Donald Trump Show is the most interesting entertainment and information show that mankind has ever seen. No living human being has occupied as much of the attention of the human race as Donald Trump. Wherever you go in the world, all you hear is Trump, Trump, Trump, Trump, Trump. Some people hate Trump, some like Trump, some are mocking Trump, some are amazed by Trump, some spend their lives thinking about how much they despise Trump. Trump sees this as the key to his unique strength. Many thought that when he lost in 2020, his impact would fade away, but he was just as controlling outside of his position as he was while in power. In what he does, Trump is as brilliant as Napoleon was in what he did. Napoleon also lost at Waterloo and ended up in exile, so there is no guarantee of a happy ending from Trump's point of view. Trump is a major historical figure who developed a new understanding of how power works in the age of mass communication and social media.
Trump has greatly accelerated the disintegration of the post-World War II and post-Cold War structures. Those structures will never be the same again. We are entering a much more personal and less bureaucratic political era. People got used to the idea in the twentieth century that the rule of one person or central figure should recede, and that we should be run by institutions, bureaucrats, and committees. One effect of the internet is that people want to be ruled by people again. This is seen with Modi in India, Abe in Japan, Bibi in Israel, Erdogan in Türkiye, and Trump in the United States. Trump is arguably the greatest and most globally influential of this new wave that includes Putin and Xi Jinping. We have returned to the era of personal politics.
The United Kingdom and America have been successful in winning the last hundreds of years of world affairs. The first ruler in the modern era to embrace the idea of matching technological and military might without political liberalism was Louis XIV, who believed his technocratic government of experts in France could defeat the troublesome English. The dominant feature of global power politics from the time of Louis XIV until now has been the rise of the English-speaking, maritime, liberal trading system and its exposure to competition by a succession of continental great powers: France under Louis XIV, again with Napoleon, Prussian Germany in World War I and World War II, and the Soviet Union. These conflicts have been extremely difficult. There were moments in each case when the central technocratic land power appeared to be prevailing, while the commercial, turbulent, English-speaking maritime alliance seemed scattered, lost, and mad. However, the English-speaking maritime system continues to win in the end.
The global strategy was stolen from the British, who stole it from the Dutch, who had been doing it earlier in the seventeenth century. The last 300 years of modern history can be summarized as UP, from the United States to the United Kingdom to the United States. The secret five-point plan for global domination begins with having an open community at home. In the seventeenth century, while everyone was fighting religious wars, the Dutch said that Lutherans, Catholics, and Jews could live and let live. If an intellectual or scientist publishes a scientific paper that the Church does not like, people will write offensive comments in other journals, but there are no inquisitions. If you have an idea, you can try it. If you are the son of a farmer and want to try your luck as a trader, you can do so. They came up with new ideas for government financing that are still used today, joint-stock companies, and new navigation technology.
With products developed and innovative technology, the offering is taken abroad and traded globally. There were 10,000 seagoing vessels coming from Holland in the 17th century traveling all over the world. This makes you very rich. Dutch painting masters at the Met Museum show the wealth of these people, with merchants wearing silk robes from China, standing on rugs from Türkiye, with stuffed parrots from Brazil on the mantelpiece.
Once the global system is built, everyone is invited to participate in it. The Spanish in Latin America said this is ours, we conquered it, no one but us can trade here, which led to stagnation. In the nineteenth century, the British implemented free trade in the British Empire where everyone could trade, and the British Navy fought piracy for everyone, not just the British. This encourages other countries to participate in the system. America did not fight Britain after 1812 and traded within the British system, becoming one of the biggest beneficiaries. Prussia and the German Empire became a major trading power with investments in Argentina and Chile, their trade driving out British trade in many places.
The Germans discovered another trick during World War I: while integrating into the world that made them rich and gave them great technology and military power, they became dependent on it. When at war with the United Kingdom, they could no longer obtain grain from Argentina and America that fed their people. They could no longer obtain imported rubber from Malaysia that provided tires needed for the war. They had become dependent on the international system, which could be cut off from them. This is one of the main reasons why the English won so many of these wars.
After the end of the Cold War, Russia and China were invited to join the global system, just as Germany and Japan were told in 1945 to take advantage of it. Germany and Japan became two key pillars of the global system. The hope was that Russia and China would do the same, but they took Wilhelm II's path instead of Konrad Adenauer's.
Chinese researchers and officials are very aware of the dynamic of maritime dominance. Xi Jinping realizes that in any conflict with the United States, China risks being cut off from many of the raw materials and markets its economy needs. If China declared a blockade on Taiwan, the United States could impose a counter-blockade on China from a distance of one hundred miles, meaning nothing goes in or out, no oil goes in or out, no manufactured goods are sold. All soybean contracts with farmers in Brazil and Argentina would not be delivered. The war in Iran revealed how huge Chinese oil stockpiles had become. Much of China's energy policy can be understood as an attempt to avoid the trap of dependence on the global economy. They are turning to solar energy and using as much hydroelectric power as possible, while also extracting as much coal as possible to reduce their dependence on the outside world so that in the worst-case scenario they can fight with the United States in the long term.
American exports are relatively low as a percentage of GDP compared to many other countries. America is fairly self-sufficient, an amazing place, a food basket, rich in natural resources, and surrounded by two oceans. There is a clear American history of isolationist traditions that are more pronounced at certain times and are standing out now. This is concerning because American security and the American economy ultimately require global engagement. Roughly a third of American business is within the hemisphere, a third across the Pacific Ocean, and a third across the Atlantic. America cannot do without any of them easily. During the pandemic, dependence on China for all kinds of things was alarming. Supply chains show many weaknesses, but America cannot manufacture everything needed domestically nor obtain all raw materials needed domestically. Producers need more than just the American market. The agricultural lobby has been the strongest supporter of the free market because America can do much more than feed itself. Farmers could practically feed the world, but if they limit themselves to feeding only the American market, they cannot make profits because prices are extremely low.
Trade must be mutually beneficial. After World War II, many European countries were so poor and devastated that reviving their economies became essential to American security, otherwise they would have turned to communism. Germany was allowed to impose very high tariffs on American goods without reciprocation because German growth was in American interest. Much of that became institutionalized, resulting in many cases of non-reciprocal tariffs where American barriers were lower. Trump's team correctly identified that this had to change. Supply chain security means economic policy cannot be simply derived from a textbook on free trade. However, trade is still needed and must be mutually beneficial.
Twenty years ago, the top 10 or 20 companies by market capitalization showed a comprehensive global mix of companies in different industries. Now that same list consists of only American technology companies, almost from number one to number twenty. This was true before OpenAI, Anthropic, and SpaceX, and these companies are emerging again above major technology companies. The closest historical comparison is the actual Industrial Revolution, where Britain led the first industrial revolution and then dominated for 150 years. History is moving much faster now, but America is in the position of being the first to see and use this source of power. Since the seventeenth century, the key to power in the modern world is which countries can be most effective in developing, harnessing, and exploiting the power of new technology without imploding internally due to the pressures and social unrest caused by the new technology. The British, first and foremost, and then America, were better at taming this wild horse than others.
American society is experiencing backlash against technology, including anti-data center sentiment. Trotskyists in the Social Democratic Society believe the most reactionary form of Marxism offers salvation. Tremendous progress has occurred alongside widespread chaos and disagreements. The relationship between achievement and order has broken down because a different kind of order is needed due to technology creating a new kind of world that changes how power works.
America continues controlling the latest technologies, having developed and owned the horse. The key question is taming this wild horse while maintaining dominance for the next 150 years in a positive way. The Founding Fathers believed the United States could remain a democratic republic because it was primarily a country of independent farmers who were small business owners with their own land, having a stake in the system.
Landownership taught citizens the meaning of citizenship through rational calculation about infrastructure and taxes. This political education prepared individuals to play thoughtful roles in the country's councils. With the industrial revolution, large cities and industry emerged, threatening the republic model.
The government gave away huge amounts of land, often corruptly, to railroad companies to build transcontinental lines that created a national market, while simultaneously giving free land to American farmers through the Homestead Act. This established infrastructure for a new industrial society. The family farm later declined economically as modern farming required large capital, pushing people into cities as employees.
The suburban single-family home was created to replace the single-family farm. Government policy built highways and provided subsidies through tax-exempt municipal bonds, allowing towns to build infrastructure that attracted developers and homeowners, raising property values to pay off bonds. This created a wealth-creation machine that has now reached its limits as homeownership has become expensive and commuting unbearable.
Young people's dissatisfaction with the economy stems partly from the homeownership crisis. Remote work, hybrid work, and self-driving cars can address this by allowing people to live farther from work. Expanding travel range from 40 miles to 75 miles geometrically increases available land for residential development. Information technology can open opportunities for two generations if used appropriately.
A new wealth-creation machine requires settlement equivalents or housing subsidies. Companies could receive tax advantages for moving toward hybrid and remote work, saving government costs elsewhere. Artificial intelligence technology requires thinking seriously about success through "information architecture" - the institutional, legal, and regulatory framework allowing AI to evolve and deliver better outcomes, such as for patients in hospitals.
China extracts AI systems using American technology without capital investment, unlike physical infrastructure like highways or railways that cannot be copied. This raises questions about appropriate foreign policy and the four types of American foreign policy throughout history.
Hamiltonianism, named after Alexander Hamilton, emphasizes a strong capitalist economy that trades effectively worldwide, providing money and technological progress that holds society together while preventing attacks from other countries. It requires a strong federal government strengthening domestic infrastructure and helping American companies succeed internationally. George Bush Sr. represents this approach.
Wilsonianism focuses on human rights and democracy promotion, arguing that bad governance and dictatorships cause threats to America. Democracies do not wage wars while dictatorships do. US foreign policy should promote democracy globally and strengthen international institutions to eliminate war's causes. This approach predates Woodrow Wilson.
Jeffersonianism prioritizes personal freedom and limited government. Involvement in Wilsonian human rights campaigns or Hamiltonian great power politics creates strong government that hides secrets, runs huge defense budgets, and engages in endless wars, destroying American freedom. This perspective has existed since the 1790s.
Jacksonianism, named after Andrew Jackson, maintains that foreigners can be democrats without American concern unless they attack or dishonor the United States. If attacked, America should respond decisively according to laws of war. Jacksonians appear isolationist in peace but become active after events like Pearl Harbor or September 11th.
The old Democratic consensus was largely a Wilson-Hamilton alliance building a world order enhancing economic security while promoting human rights and democracy. Trump's coalition mixes Jeffersonians and Jacksonians - isolationists and hawks. Vance represents isolationism while Rubio represents hawkish positions without focusing on democracy restoration in places like Venezuela.
Tech Hamiltonians represent a major emerging faction. Technology and government were previously separate concepts, but mutual discovery has occurred. In the 1990s, corporations claimed to be global rather than American, with tech companies like Google operating beyond national boundaries. Today, technology is the focal point of great power competition, with China's attempt to build a dominating "technosphere" concerning American tech companies and the American state.
Tech companies differ from traditional multinational corporations that emerged after World War II. Traditional companies need free trade, financial markets, labor markets, and smooth open markets for manufactured goods. Tech companies like Google or Alphabet do not import and export many goods. They are more concerned with supply chain security, intellectual property security, and employee patriotism regarding intellectual property protection.
The world has largely decided that only Americans and Chinese possess real power as contenders for dominance. India has become particularly interesting, with the Bharatiya Janata Party and Rashtriya Swayamsevak Sangh representing Hindu nationalist movements that have grown from five men in one house to 86,000 small groups meeting weekly across India. India is now the world's most populous country with 1.44 billion people and nuclear weapons.
India has developed a successful technology industry and may reach AI forefront faster than expected. India's foreign minister Jaishankar described China as a revisionist force while India is a reformist force unhappy with the global status quo, particularly the UN system where India has equal voting power to Liechtenstein or Luxembourg despite its population and nuclear capabilities.
The Islamic world ranges from sophisticated scholars and intellectuals to jihadists in North Africa, representing a tremendous civilization growing stronger. Understanding cultural changes in Gulf states and Turkey is important. The Industrial Revolution forced societies toward similarity through institutional requirements for factories and infrastructure, but the Information Revolution empowers countries to use their own cultures and languages as platforms.
Turkey has become more Turkish and less like Europe than 25 years ago. India has become more Indian, and Japan more Japanese. MTV's entry into Latin America initially threatened authentic Latin culture but local artists soon created music and videos fitting local tastes at low cost, demonstrating freedom to venture into local culture within global frameworks.
The Industrial Revolution produced positive long-term outcomes but caused side effects including the Communist Party, 100 million deaths, World Wars I and II, and the Reign of Terror. The Information Revolution creates similar social pressures uprooting millions from traditional lives, confusing minds and producing strange outcomes. Nuclear proliferation continues, and future weapons of mass destruction including biological weapons and cyberattacks pose verification challenges that could accelerate arms races without strategic trust.
The Ukraine conflict has revealed lessons about military technology and conventional weapons. Drone factories in Ukraine demonstrate real-time battlefield data adaptation. The United States faces ammunition shortages, highlighting conventional weapons' continued importance alongside artificial intelligence developments.
Early in the conflict, Ukrainian forces improvised by converting children's toy trucks into drones capable of placing landmines under tanks. Recent observations show dramatic advancement in both intensity and scale. Medical personnel report they no longer treat bullet wounds as drone warfare dominates the battlefield. The conflict has transformed into what soldiers describe as a "gray killing zone" where battalions rarely engage directly and soldiers operate in small groups.
Evacuating wounded personnel has become one of the most difficult challenges. New ground drones are being developed to retrieve injured soldiers, cover them with metal armor, and transport them to safety. These recovery operations require coordinated drone teams to detect and neutralize threats. One soldier required 63 days to be evacuated after being wounded.
The war differs fundamentally from conflicts even six years prior. Questions arise about how quickly the Pentagon adapts to technological change. Tanks and rifles face obsolescence similar to cavalry and sword attacks in earlier eras. The United States faces particular vulnerability due to extensive existing equipment inventories, while forces that developed new tank-killing or naval weapons encounter fewer transition difficulties.
Ukraine has demonstrated that a navy is not required to control maritime spaces. Using only small boats and drones, Ukrainian forces have kept the Russian navy out of the Black Sea.
American military power has historically depended heavily on naval capabilities. The strategic environment has shifted from the 1990s concept of a single "revolution in military affairs" to continuous revolutions requiring constant adaptation. Warfare now involves ongoing technological transformation rather than mastering one change before the next emerges.
Xi Jinping appears committed to taking Taiwan but lacks a predetermined timeline. Chinese leadership requires high probability of success before committing to major action, as failure would be catastrophic. Between full invasion and inaction exist multiple intermediate steps. China appears to be pursuing a "soft blockade" strategy, requiring ships bound for Taiwan to stop at Chinese ports for customs clearance to confirm sovereignty.
Japan has recognized that Chinese control of Taiwan poses a direct threat to Japanese independence. Japan is increasing defense spending, rethinking military doctrine, and reshaping military culture. Historically, Japan has demonstrated capacity for rapid strategic adjustment when facing genuine threats. The speed and seriousness of Japanese self-defense efforts will significantly influence Chinese calculations regarding Taiwan.
Following World War II, American society was organized around three distinct classes that existed across much of the developed world. The industrial working class held stable jobs, organized into unions, and maintained pragmatic political focus on economic improvement. The business class evolved from founder-led enterprises to professionally managed, publicly traded companies operating within regulated monopolies and oligopolies. A technocratic class of experts and administrators made decisions based on social science principles, balancing business interests against worker demands.
These three classes now exist in disarray while facing complex challenges like artificial intelligence governance. America lacks institutional structures to address such questions through traditional processes.
America remains the only potential pillar of global stability and order. Internal American turmoil regarding rapid changes undermines prospects for global stability. Citizens bear responsibility for developing new political and social frameworks that can restore internal stability and project order internationally.
Americans conceptualize national identity differently. Some view America as founded on ideas, while others, particularly from the South, understand American identity through family history and presence rather than ideological commitment. The Pledge of Allegiance defines American identity for some: allegiance to the flag and the republic it represents, one indivisible nation under God with liberty and justice for all.
The decline of Arab nationalism as an organizing force stems from multiple collapses. Iraq's fall involved significant American participation, while Syria collapsed independently. Iran, as a non-Sunni, non-Arab power, established what became known as the Shia Crescent extending from Lebanon through Syria and Iraq to Iran. Israeli actions since October 7th have disrupted this network, but underlying Arab world weakness persists.
Gulf states possess effective economic tools through oil wealth but cannot defend themselves against Iran without external assistance. The Strait of Hormuz remains critical to global economic stability. Iranian dominance over Middle East oil resources would enable economic blackmail against many nations.
Iran's capabilities extend beyond attacking tankers to placing drones on desalination plants, potentially rendering Gulf cities uninhabitable. This threat discourages foreign investment in the region. Deterrence erosion represents a major geopolitical challenge, creating prolonged, costly conflicts with uncertain outcomes.
Effective deterrence requires presidents capable of explaining complex strategic issues to the public, similar to Harry Truman's post-World War II leadership or Franklin Roosevelt's radio addresses. Current American political culture lacks leaders who can articulate clear visions and maintain public support for difficult foreign policy decisions.
America should learn to maintain balance during the information revolution and use resulting wealth to address associated pressures. Success requires demonstrating that the system works for American citizens. Foreign policy objectives include preventing any superpower from dominating Europe or Asia, and ensuring no power can control Middle East oil flows.
The current imbalance between China and other Asian nations creates dangerous temptations. In 1980, India's GDP represented 60-65% of China's; today it represents only 17%. Enabling prosperity for India, Indonesia, and Vietnam would demonstrate to China that Asia cannot be dominated by any single power.
The information revolution may be better understood as an intelligence revolution centered on artificial intelligence. AI technology appears more imitable than nuclear weapons, with China achieving significant capabilities with less initial effort than the United States. Third parties including India, Europe, and Israel may develop substantial AI capabilities.
Automating foreign policy decisions could strengthen deterrence by removing human hesitation from response calculations. However, this raises questions about allowing automated systems to make decisions regarding war initiation or nuclear weapons use.
AI and technological progress are accelerating medical research discoveries at unprecedented rates. New treatments emerge that did not exist months earlier. Healthcare costs are expected to decrease significantly while quality improves. Current federal deficit concerns related to benefit programs may prove solvable as medical advances reduce treatment costs.
The abundance created by the information revolution creates management challenges but also unprecedented opportunities. Many current problems appear solvable through emerging technological solutions. The current period represents a unique era of human transformation and renewal.
Mentorship relationships, particularly with figures like Les Gelb at the Council on Foreign Relations, provide guidance through difficult decisions. Life involves accumulated kindness from many sources including family members, colleagues, and employers who support professional endeavors despite imperfections.
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