The 2024 U.S. presidential election concluded with Donald J. Trump emerging as the winner, securing a return to the White House. Although several reasons were given for Trump’s victory, spanning economic discontent and inflation, immigration and border security, social issues and cultural divides, to mention a few, China’s state capitalism, where the government is central in directing and controlling economic activity, as a challenge to the free-market ideology might be the primary reason for Trump’s victory.
In China, the state owns or heavily influences key sectors (e.g., energy, telecommunications and banking) and often guides private firms to align with national goals. This contrasts with Western liberal capitalism, where market forces are generally expected to operate with minimal government interference.
Capitalism: An Overview
Capitalism is an economic system characterized by private ownership of the means of production, distribution and exchange. Under capitalism, individuals or corporations own and operate businesses and resources, aiming to generate profits in a competitive marketplace. This system often contrasts with alternatives such as socialism or communism, where the government or the collective owns or controls production and distribution.
The concept of a free market, in which supply and demand determine prices for products and services, is central to capitalism. Clients and producers interact voluntarily, with the goal of satisfying needs and wants. Because the market is competitive, businesses must innovate, improve efficiency and respond to consumer preferences to stay profitable.
This competition can drive technological advancements, lower prices and increase the variety of products and services available. Those who successfully meet consumer demand can accumulate wealth, while those who are unable to do so risk becoming bankrupt.
State Capitalism versus Liberal Capitalism
Western capitalist countries typically operate under the assumption that market forces (supply and demand) and limited government intervention result in the most efficient allocation of resources. China’s state-controlled model challenges this assumption, suggesting that a centrally planned, state-directed economy can achieve high growth rates and modernize rapidly.
China has become the world’s largest manufacturer and exporter of goods, offering high-quality products at low prices. This has led to significant trade imbalances with Western countries, especially the United States, contributing to manufacturing job losses in industries such as textiles, electronics and consumer goods.
Furthermore, Chinese intellectual property theft and forced technology transfers are common concerns for Western companies. As Chinese enterprises have become more technologically sophisticated, they are now direct rivals of Western tech giants (e.g., Tencent vs. Western gaming corporations or Huawei vs. Cisco). In addition, the rise of Chinese technological innovation is challenging Western dominance in areas such as artificial intelligence (AI), 5G and renewable energy technology.
Authoritarianism versus Democracy
China’s one-party system and lack of political pluralism contrast the democratic, multiparty political systems common in the West. The success of China’s model provides an alternative to the Western liberal democratic capitalist order. The successful Chinese single-party system and state-controlled model can replace the Western liberal democratic capitalism system.
Although Western countries often promote democracy and individual freedoms as cornerstones of their economic systems, China’s rise without adhering to these principles presents an ideological challenge.
Many emerging nations are drawn to China’s “authoritarian development” model, which emphasizes economic expansion at the expense of political pluralism. It offers a path to modernize without the institutional and political changes that Western aid and investment models demand. In contrast to the Western strategy, which typically links economic assistance to political reforms, China generally employs “soft power” through business alliances and non-interference in domestic affairs.
Through organizations such as the Asian Infrastructure Investment Bank (AIIB) and its participation in the BRICS group (Brazil, Russia, India, China and South Africa), China is progressively promoting its own international standards.
For instance, the U.S. dollar’s pivotal role in international trade or Western-dominated financial institutions such as the World Bank and the International Monetary Fund could be threatened by China’s support for alternative approaches to intellectual property, financial systems such as the creation of the digital yuan (Chinese currency) and trade. China, a significant global economic force, offers alternatives to trade standards and economic methods that the West dominates.
Trump’s Policy on China
U.S.-China economic relations became notably more volatile during Trump’s presidency, as his administration took a more confrontational approach to trade and economic issues with China. Trump’s “America First” policy prioritized reducing the U.S. trade deficit ($382 billion) with China and addressing what he characterized as unfair trade practices, including intellectual property theft and forced technology transfers.
This led to tariffs on hundreds of billions of dollars’ worth of Chinese goods, prompting retaliatory tariffs from Beijing. The trade war escalated throughout his term, with both countries engaging in rounds of tariffs and negotiations, severely disrupting global supply chains and creating uncertainty for businesses and investors.
Trump’s hardline stance also extended to national security concerns, particularly in technology and telecommunications, where his administration pushed to limit Chinese companies’ access to the U.S. market, citing risks of espionage and intellectual property theft.
The U.S. government’s moves against Chinese tech giants such as Huawei and ZTE heightened tensions and underscored broader geopolitical competition, particularly in emerging technologies like AI and 5G. The underlying issues of economic competition, trade imbalances and technological rivalry remained unresolved, leaving the relationship more unpredictable and strained under Trump’s leadership.
Trump’s decision to impose tariffs on Chinese imports valued at billions of dollars was one of his most significant actions, aiming to reduce the U.S. trade deficit and force China to make economic concessions. The Trump administration also sought to limit China’s access to critical technologies, most notably by restricting Chinese tech companies like Huawei from accessing American-made semiconductors and 5G infrastructure. Trump’s policy reflected a broader shift toward strategic competition, viewing China as a strategic rival rather than a partner in global governance.
During his first term as President, Trump imposed tariffs ranging from 10% to 25% on Chinese agricultural products imported to the United States, including seafood, pork and dairy. The world’s two largest economies began a trade war after Beijing responded with its own tariffs.
President-elect Donald Trump has threatened to slap a tariff of up to 60% on all goods imported to the United States from China. Since the start of Trump’s first term in the White House and through President Biden’s term, China’s economic growth has slowed from roughly 7% to 4.5%. The country’s property market has crashed because of massive overbuilding and an increase in youth unemployment.
Conclusion
China’s rise is seen as a threat to the Western capitalist order for several key reasons: It offers an alternative, state-controlled capitalist model that directly challenges the liberal, market-driven approach in the West; China competes aggressively in global trade, manufacturing and high-tech industries; and it seeks to reshape global governance, economic norms and technological leadership.
The shift toward a more multipolar world, where China plays an increasingly dominant role, challenges the historical dominance of the United States and its Western allies in shaping the global economic and political landscape. This is particularly evident in areas such as trade, technology and geopolitical influence, where China’s growing power and influence could undermine Western capitalist institutions and norms.
Under Trump’s leadership, the relationship between the United States and China has become increasingly unpredictable and strained. He is often labeled as a dictator or fascist due to his authoritarian tendencies, including undermining democratic institutions, attacking the press and promoting loyalty over rule of law. Critics argue that his rhetoric and actions mirror those of authoritarian regimes, with attempts to consolidate power and dismiss opposition in ways that resemble fascist movements from the 20th century.
However, many of his Republican allies endorse his hardline stance on China. It was summed up well in a recent remark made by Rep. Troy Nehls (R–Texas). He said, “Donald Trump is elected and will be in office now, so we will do everything he says. If Donald Trump said, ‘jump three feet high and scratch your head,’ we will jump three feet high and scratch our head.
