TURKISH CENTER  for ASIA PACIFIC STUDIES

China’s Economic Rise and Global Power Balances
China has garnered significant attention for its rapid economic growth, emerging as the world’s second-largest economy after the United States. Today, it is widely accepted that the United States and China represent the two economic superpowers. The widening gap between these two nations and other major players, such as Germany, Japan, UK, and India, has placed them in a league of their own. China is now regarded as a peer competitor to the United States.

As the world’s largest hub for trade and manufacturing, China has earned the title of “the world’s factory.” Its economic capacity and industrial strength are among the key factors that give it a competitive edge over other nations. From low-value goods to high-tech products, China has demonstrated remarkable diversity in its production capabilities. Notably, its recent advancements in the electric vehicle (EV) industry have positioned it as a global leader. Additionally, the Chinese government has made substantial investments in artificial intelligence (AI), supporting both public and private research institutions to drive innovation.

However, China’s economic ascent is not without its challenges. Chief among these is its dependency on external energy sources, particularly fossil fuels such as natural gas and oil. To address this vulnerability, China has been aggressively investing in renewable energy, including solar and wind power, and other environmentally friendly technologies. Another significant drawback is China’s reliance on the global economy. Any slowdown in global economic growth has a direct and adverse impact on China’s growth trajectory.

China’s Global Strategy
During the COVID-19 pandemic, Beijing shifted its diplomatic approach, moving away from its “wolf-warrior diplomacy” in response to international criticism. This recalibration allowed China to present itself as a more predictable and cooperative partner on the global stage. By emphasizing a win-win approach and mutual collaboration, China has worked to reshape its international image. Additionally, China has been actively supporting alternative international organizations and financial institutions that enhance its political and economic influence. Notable examples include the Shanghai Cooperation Organization (SCO), BRICS, and the Asian Infrastructure Investment Bank (AIIB).

In response to the unilateral policies and trade wars initiated by the Trump administration, China has focused on developing strategies that garner positive feedback on the global stage. This approach has bolstered its standing as a global leader. Recent surveys (Gallup, 2026) indicate that, for the first time, global approval of China’s leadership has surpassed that of the United States.

The U.S.-Iran Crisis and China’s Strategic Position
The U.S. military intervention in Iran has negatively impacted the economies of Gulf nations and triggered a ripple effect across the global economy. The closure of the Strait of Hormuz and attacks on energy facilities have caused a sharp rise in energy prices, exacerbating the global economic slowdown. While the United States is less dependent on Gulf energy resources, the surge in oil prices has intensified inflationary pressures domestically.

China, on the other hand, has adopted a cautious approach, similar to Russia, by observing the situation from the sidelines and calling for restraint among the parties involved. As long as Iran’s regime remains intact and does not fall under complete U.S. control, as seen in Venezuela, both China and Russia are expected to benefit strategically. China’s preparedness for crises, developed during the pandemic, has positioned it to withstand short-term energy shocks with minimal disruption to its economy.

Amid the unpredictability of U.S. policies under the Trump administration, China has seized the opportunity to present itself as a responsible actor on the global stage. Countries such as Canada, members of the European Union, and Asian nations, including India, are increasingly exploring more sustainable partnerships with China.

U.S.-China Rivalry and the Future Global Power Dynamics
If Beijing avoids major strategic miscalculations and adopts a measured stance on sensitive issues such as Taiwan and the South China Dispute, it stands to gain significantly in the medium term. While Moscow’s strategic capability has been severely diminished by the prolonged war in Ukraine, Washington has suffered a blow to its deterrence credibility due to its entanglement in the Iran conflict. The fact that a middle power like Iran has been able to resist or prolong U.S. intervention has weakened Washington’s military deterrence, particularly in East Asia, where nations now weigh the risks of alignment more carefully.

In East Asia, nations are increasingly hesitant to engage in new military alliances with the U.S. without ironclad commitments. The global struggle for dominance between the United States and China will largely be defined by technological competition. While China remains dependent on the U.S. and other Western nations for the most advanced semiconductors and high-tech equipment, Western countries are similarly reliant on China for rare earth minerals and processed critical materials. The first side to effectively break free from this mutual dependency through reshoring, friend-shoring, or technological breakthroughs is likely to gain a decisive advantage in the global power struggle.

Conclusion
The world is on the brink of a new multipolar order, with the United States and China at its helm. The nature of their relationship, whether defined by cooperation or competition, will have profound implications for the global political and economic landscape. As the United States grapples with internal challenges and international credibility, and as China continues its ascent, the future of global power dynamics remains uncertain. What is clear, however, is that the policies of these two nations will shape the 21st century in ways that will be felt across the globe.

China and the United States in the New Cold War: Shifting Global Power Dynamics

Selçuk Çolakoğlu

Turkish Centre for Asia-Pacific Studies  - April 29, 2026

Chinese President Xi Jinping meets with U.S. President Donald Trump in Busan, South Korea, Oct. 30, 2025. (Xinhua/Huang Jingwen)