by PHAR KIM BENG
Superpower contest no longer about who dominates but who can endure and China has the edge in most strategic sectors
There is an image that likely increasingly haunts the minds of US strategists: a Chinese dragon, no longer just coiled in defense but elegantly entwined around the neck of the American bald eagle. Not to suffocate but rather to regulate the bird’s breath.
The symbolism is not hyperbole. It captures a world where China, long caricatured as the imitator, has now morphed into a systemic rival, outrunning and outgunning the United States in critical business and security sectors.
From technology to trade, currency to cyber power, the Chinese state has mastered the long game.
As Graham Allison warned in “Destined for War”, the Thucydides Trap is not only about the inevitability of conflict between rising and ruling powers. It’s also about the erosion of assumptions that the West has long taken for granted—namely, that liberal democracies will always innovate faster and govern better.
That assumption is collapsing under China’s weight. Let us now turn to the strategic sectors where China has not just caught up, but, in many instances, sprinted ahead.
1. Semiconductors: from dependency to near parity
Semiconductors, once China’s key vulnerability, are now the arena of its most dramatic gains. Despite Washington’s embargoes on Huawei and export bans on advanced lithography equipment, Beijing has poured over 1.5 trillion yuan into its domestic chip ecosystem.
China’s 14nm chips are now being produced domestically at scale, and according to Dr Dan Wang of Gavekal Dragonomics, an economic consultancy, “China is only a node or two behind global leaders, and catching up fast.”
This acceleration is powered by “dual circulation”—a policy that embeds state subsidies across the entire supply chain, from rare earth mining to chip design.
In contrast, the US remains fragmented. The CHIPS and Science Act is slow-moving and could be scrapped while American fabs are still dangerously dependent on geopolitical choke points like Taiwan.
And it’s not clear that forcing Taiwan to build fabs in the US will even remotely work due to a lack of skilled labor and relevant supply chains.
2. Electric vehicles: Tesla in the rearview mirror
China’s BYD, not Tesla, is now the world’s top EV manufacturer. In 2023, it overtook Tesla in global sales and its footprint now spans Latin America, Europe and Southeast Asia.
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