China manifests a striking paradox. It is among the world’s most dynamic technological powers, producing breakthroughs in AI, electric vehicles, and advanced manufacturing at an accelerating pace, yet economic growth continues to slow. The reason is no mystery. As the government’s latest Five-Year Plan (2026-30) recognizes, China is experiencing a structural transition, not a cyclical slowdown. The old model is giving way to a new one, which has yet to take hold.

As missiles, bombs, and drones fly across the Persian Gulf, the prospects of an even more devastating war in the Pacific are strengthening. De-escalation of the new cold war between the United States and China must now become the world’s top priority. To that end, it is essential to explode a powerful myth that makes war more likely: the idea that China has cheated its way to prosperity.

2026 is the first year of the Fifteenth Five-Year (2026-2030) Plan for National Economic and Social Development of China. There is intense interest in the target rate of economic growth as well as the actual rate for 2026, given the continuing slump of the real estate sector in China, the apparent lack of sufficient domestic aggregate demand, and the many different challenging geo-political uncertainties. The official target rate will be announced at the “Twin Conferences (the National People’s Congress and the Chinese People’s Political Consultative Conference)” in early March.

When Western politicians and business leaders discuss China’s manufacturing prowess, they typically invoke images of colossal steel mills flooding global markets, dark factories run by robots, and state-owned champions sustained by subsidies. This supports the view that tariffs and anti-subsidy measures can erode China’s industrial dominance. But while this logic may be comforting, it is wrong.

China has deliberately kept the yuan stable in recent years, prioritizing currency credibility and controlled internationalization over export-driven devaluation, as a weaker currency now risks trade tensions, regional instability, and undermining long-term strategic goals. Rather than challenging the dollar outright, Beijing is pursuing a state-led, sanctions-resilient financial system and gradually re-anchoring its exchange rate away from a tight dollar peg toward a more multipolar framework.

The national development strategy advocates for a multipolar world and seeks to implement global initiatives on development, security, civilization and governance. It opposes hegemony, defends justice and promotes a world of lasting peace, prosperity, openness and sustainability.

Another great transformation is underway in China. The world’s factory is fast becoming its first electro-state, with an economy increasingly built on clean energy, AI, advanced manufacturing, and control of key strategic materials. This new model is full of promise, though it faces major challenges.

High import duties on Chinese goods have become the new normal for the United States. While there’s lots of talk about renewed stability with China after the presidents met in South Korea, but the world’s two largest economies appear to be learning how to live apart.

In the geopolitical theater of 2025, the United States’ trade posture toward China exemplifies a pattern of escalating threats that yield diminishing strategic returns.

Under China’s 15th Five-Year Plan, the coming period will be crucial for consolidating foundations and achieving socialist modernization. The country aims to leverage four key advantages: its institutional strengths, its vast domestic market, its complete industrial system and its abundant human resources.