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What We’re Watching: Trump changes tune again on Russia, China helps Myanmar’s junta gain ground, Brazil’s Lula announces reelection bid
U.S. President Donald Trump listens as Indian Prime Minister Narendra Modi speaks during a joint press conference at the White House in Washington, D.C., U.S., February 13, 2025.
Trump sanctions Russia’s biggest oil firms
Missing a date has consequences: days after canceling a second meeting this year with Russian President Vladimir Putin, US President Donald Trump imposed sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, a sign of Washington’s growing frustration with the Kremlin. Europe piled on, imposing its 19th set of sanctions on Moscow. Oil prices jumped in response. In a sign that India, the second-biggest purchaser of Russian oil, could abide by these sanctions, Delhi’s top refiner is looking at halting purchases from Moscow. Further, The Wall Street Journal reported that the White House has authorized Ukraine to strike deep inside Russia. Trump denied the report, but a Russian munitions factory some 1,000 miles from the Ukrainian border was hit last night, killing at least 10.
Myanmar’s junta gains ground with China’s help
Myanmar’s military junta has regained key territory in Shan State, reversing major losses from last year’s insurgent offensives in the country’s brutal four-year civil war. Since the 2021 coup that ousted the previous pro-democracy leader, ethnic armies and local militias have battled to topple military rule. The army has now retaken strategically important towns in the Shan State using new Chinese-supplied drones, airpower, and 60,000 conscripts. China’s growing support has tilted the balance decisively toward the junta, even as large parts of Myanmar remain contested and devastated by civil war.
Brazil’s president to seek a fourth term
Brazilian President Luiz Inacio Lula da Silva, known as Lula, announced on Thursday that he will run for reelection in 2026, seeking a fourth non-consecutive term at 79 years old. Lula’s popularity has been on the rise in reaction to Trump’s tariffs and pressure to drop the case against former President Jair Bolsonaro – who was convicted of inciting a coup. Lula is sharpening his rich-versus-poor rhetoric as he begins his campaign around the country, calling for higher taxes on the wealthy, fintechs, and gambling companies. It is unclear who will oppose him, but Bolsonaro is likely to serve as a kingmaker in choosing the next leader of his right-wing movement.
As we race toward the end of 2025, voters in over a dozen countries will head to the polls for elections that have major implications for their populations and political movements globally.
Today, GZERO is highlighting three of them that stand out to us – in the United States, Argentina, and Côte d’Ivoire. The issues each of those electorates face are different, but the results could provide insight into the future of larger political trends.
Democrats seek a glimmer of hope
The United States doesn’t have a nationwide election this fall, but it has plenty of local ones to pique the interest of political nerds. These include the mayoral election in New York City, gubernatorial races in New Jersey and Virginia, and state Supreme Court races in the purple state of Pennsylvania – Election Day for all them is Nov. 4.
“Democrats probably should win all those races for this election to be to feel like a success for them,” University of Virginia politics expert Kyle Kondik told GZERO.
Though these races are local, they have national implications, as the Democratic Party desperately seeks to build some momentum after a tough year. The party is struggling for leadership, its messaging has been muddled, and it hasn’t been able to even temper – let alone stop – President Donald Trump’s policy agenda.
One Democrat who has brought some life to the party this year is Zohran Mamdani, the nominee for New York City mayor. A democratic socialist, Mamdani rode the waves of a successful social-media campaign to defeat former New York Governor Andrew Cuomo in the primary, and is now all-but-certain to become the mayor. This doesn’t mean his message, though, will work elsewhere in the country.
“There may be something appealing about Mamdani’s campaigning style – the short videos, that sort of thing.” said Kondik. “But I don’t think staking out left-wing positions is going to suddenly be seen as a winning strategy.”
Can Milei clean up the midterm mess?
Argentine President Javier Milei’s libertarian movement is on the line as the South American country heads to the polls on Sunday in legislative elections.
The economist-turned-politician, replete with his mutton chops and sometimes a chainsaw, has become a figurehead for a global movement to slash the size of government via “shock therapy.” However, he’s faced some roadblocks recently: unemployment is increasing, the economy is slowing, and a corruption scandal sent government bonds tumbling over the summer. It didn’t help matters that his foreign minister resigned on Wednesday. This has all overshadowed the significant progress that Milei has made in cutting the country’s notoriously high inflation rate.
Though Milei isn’t personally on the ballot this year, an ally from afar has tried to throw his party a lifeline: US President Donald Trump pledged to hand Argentina a $20-billion bailout. The money comes with conditions, though. “If he doesn’t win, we’re gone,” Trump said. “If he loses, we are not going to be generous with Argentina.”
So what’s Milei’s target? Milei’s Libertad Avanza party is still nascent – it was only formed in 2021 – so it has only scant representation in the National Congress. What’s more, only a third of senators are up for reelection, and half the Chamber of Deputies. The goal for Milei, then, is simply to nab a third of all seats in the lower chamber, which will be enough to give him veto power.
Will it happen? “The expectation a couple of months ago was the government was expecting to have a very strong performance in the election and win at least a third of the seats.” Juan Cruz Díaz, the managing director of Buenos Aires-based advisory firm Cefeidas Group, told GZERO. “Now the situation is more challenging.”
Another old leader set to retain power on world’s youngest continent
Côte d’Ivoire on Africa’s West Coast is known for many things: it is the world’s largest cocoa producer, it has large gold reserves – particularly important with gold prices sky high – and it has had its share of world-class soccer players, most notably Didier Drogba.
One thing that the country isn’t known for, at least recently, is democracy. The country hasn’t had a peaceful transition of power in decades: two of the last three presidents were forcibly deposed, and the other was assassinated two years after leaving office. Meanwhile the incumbent leader Alassane Ouattara, who is 83 and seeking a fourth term, has clamped down on opposition leaders and restricted mass gatherings on the grounds that it could cause yet another coup.
What’s more, the opposition is fragmented, according to Eurasia Group’s West Africa analyst Jeanne Ramier.
“Nobody has successfully managed to mobilize against the fourth term,” said Ramier. “Whereas, on the contrary, many people are actually advocating for Ouattara because he’s got a good record, because they want stability and peace.”
Ouattara’s impending victory also highlights a trend across Africa: There are several elderly leaders across the continent, and many are set to stay in charge. It’s a remarkable trend on what is the youngest continent in the world – by some distance – and one that is fueling concerns about the state of democracy across it.
Hard Numbers: Pope and king pray together, Gazans bury unidentified dead, Cast of crabs begin Christmas Island migration, & More
King Charles III says goodbye to Pope Leo XIV in the San Damaso Courtyard, in St Peter's Square, after attending the ecumenical service in the Sistine Chapel in Vatican City, during the state visit to the Holy See, on October 23, 2025.
491: In a moment of religious and historical significance, King Charles III prayed alongside Pope Leo XIV today, becoming the first head of the Church of England to do so since this church split from the Vatican 491 years ago. The two leaders also exchanged gifts: Charles gave Leo a silver photograph of St. Edward the Confessor, and in return, the pontiff handed the king a scale version of the “Christ Pantocrator” mosaic.
54: Gazans buried the unidentified remains of 54 Palestinians on Wednesday that Israeli authorities had returned to the strip. The mass burial has prompted questions in Gaza about who the dead were, and what had happened to them. Israeli authorities said they had been combatants in Gaza.
36,734: The number of people crossing the Channel from France to the United Kingdom has already hit 36,734 so far this year, but that amount may be set to increase further – and the French political crisis is partly to blame. Paris appears to be backing away from recent commitments to clamp down on this form of migration, in part due to the recent exit of Interior Minister Bruno Retailleau, who had instigated an aggressive approach.
50 million: A cast of roughly 50 million crabs have begun their annual migration across Christmas Island off the coast of Australia, as they will move from their homes to the beaches to lay their eggs. Authorities on the island have built special bridges to help the crabs navigate obstacles like roads.
677: Nearly 700 foreigners fled Myanmar into Thailand after the military seized KK Park, a notorious Chinese-backed cybercrime compound known for cyber scams run by criminal gangs.. Thai authorities detained 677 people, mostly from China and India, and say all actions follow legal and humanitarian principles.
For 20 years now, we've been warned about China's rise, America's decline, and the inevitable collision between the two superpowers.
That’s not what's happening today.
The bigger story of our G-Zero world, which I laid out during my “State of the World” speech in Tokyo on Monday, is that the United States – still the world’s most powerful nation – has chosen to walk away from the international system it built and led for three-quarters of a century. Not because it's weak. Not because it has to. But because it wants to.
From unpredictable to unreliable
There’s no historical precedent for this choice. Since the end of World War II, America's elected leaders have upheld a commitment to US leadership in a troubled world. In service of that goal, they’ve bolstered allies to make them stronger, more competitive, and more secure.
But American willingness to lead is now buckling under a politics of grievance. Citizens increasingly feel US institutions – and many of the nation's elected leaders – have failed to deliver on their promises and no longer represent them. For millions of voters, the social contract – the implicit promise that if you work hard and play by the rules, the system will reward you – has been broken. Trump is a symptom, a beneficiary, and an accelerant of this breakdown, but he didn’t cause it.
As Americans have lost faith in their own system, so they have turned inward: away from allies, collective security, free trade, global institutions, and international rule of law. This is the G-Zero world I’ve been writing about for years, a vacuum of global leadership that no one else is willing and able to fill.
It doesn’t help that America's allies have brought less to the table in recent decades. Europe, the UK, Canada, and Japan are lagging in productivity and growth, face weak demographics, and have chronically underinvested in defense and technological innovation. They're more dependent on Washington precisely when Americans want their government to do less globally.
Winston Churchill said you can always count on Americans to do the right thing – after they've exhausted all other options. The United States has always been unpredictable: in elections, in trade agreements, even in matters of war and peace. But it was rarely unreliable.
Today it is both. The United States remains committed to existing international norms, treaties, and agreements only insofar as they serve the interests of President Trump and his political allies. Governments sign deals only to have Washington unilaterally change the terms. Suspend intelligence-sharing overnight. Cut lifesaving foreign aid. Intervene in the domestic politics of friendly democracies. Threaten the territorial integrity of allies like Canada and Denmark. Impose the highest tariffs in nearly a century. Abandon countless global institutional commitments. The list goes on. America's unreliability has become the central driver of geopolitical uncertainty and instability in today's G-Zero world.
But unreliability is only half the story. To understand the scale of the problem – how deep it runs, how long it lasts, what can be done about it – you need to understand what’s currently happening inside the United States: a political revolution.
As a political scientist, I don't use the word "revolution" lightly. It implies a fundamental change in a country's governance – an attempt to overthrow what exists and replace it with something new. Whether motivated by ideology, identity, or wealth, a true revolution always depends on the ability and willingness of powerful actors to seize an opportunity created by a belief across society that the existing system is broken and therefore illegitimate. In this sense, revolutions are made, not born.
There have been two state revolutions with truly global impact in my lifetime.
The first was Mikhail Gorbachev's socialist revolution. The Soviet Union had long been losing ground in its Cold War competition with the United States. An out-of-touch party elite and sclerotic economic system struggled to sustain the state and fund an arms race Moscow looked destined to lose. To reverse Soviet stagnation, Gorbachev unleashed radical internal reforms: political openness (glasnost) to encourage competing ideas, economic restructuring (perestroika) to inject competitive market elements into the centrally planned economy, and self-accounting (khozraschyot) to devolve power from Moscow to the Soviet republics.
These reforms quickly undermined the foundations of the Soviet system. They enabled citizens, oligarchs, and nationalists to question the regime's legitimacy, creating widespread internal opposition and social dissent. The fall of the Berlin Wall and the Eastern Bloc accelerated the Kremlin's loss of control, and a nationalities revolution led to Soviet disintegration shortly after. Gorbachev's revolution failed, taking the Soviet Union with it.
The second revolution was Deng Xiaoping's economic modernization of China. In the late 1970s, the Chinese Communist Party leader responded to China’s underproductive, inefficient, and technologically stagnant socialist economy by transforming it from central planning to state capitalism: open to private enterprise, foreign investment, and trade.
Western governments eventually embraced Deng’s reforms, culminating in China's WTO admission in 2001. But the events in Tiananmen Square in 1989, the collapse of Eastern European communism, and the Soviet implosion all persuaded China's leaders that political reform was too dangerous. The Party's monopoly on power became non-negotiable, and it remains so to this day.
Still, Deng's economic revolution was a spectacular success. China lifted hundreds of millions out of poverty, sustained nearly 10% annual growth for two generations, and became a middle-income economy of 1.4 billion that currently leads the world in many frontier technologies.
Trump's political revolution
And now we turn to Washington. Is it right to call what's happening inside the United States a revolution? It's early to say for sure, but increasingly I believe the answer is yes.
The president of the United States says the greatest threat to America is posed not by Beijing or Moscow or terrorists. The true enemies, he warns, are members of the opposite political party: its supporters, its fundraisers, and even its voters. President Trump believes his return to power allows – demands! – the end of political checks and balances on his executive authority.
There's not much economic revolution here. Yes, Trump has imposed the highest tariffs since the 1930s. Yes, he's trying to undermine the Federal Reserve's independence. And yes, he's dabbling in state capitalism – golden shares in US Steel, a 10% stake in Intel, a 15% cut of certain Nvidia and AMD chip sales. But these are ad hoc moves, marginal decisions in the context of the broader US economy. They’re not doctrine.
Trump picks winners and losers to demonstrate power, to reward loyalty, to extract rents. There's no structural transformation of how markets operate or the way the private sector engages with (and often captures) the regulatory system. There’s no strategic restructuring of capital. In fact, President Trump has abandoned his signature promise from 2016: "drain the swamp." Corruption and self-dealing aren't an economic revolution. They're business as usual in America's increasingly broken capitalist system … just more permitted now.
But a political revolution is another matter. President Trump is consolidating executive authority by pushing the boundaries of the law. He’s usurping powers traditionally left to Congress, the courts, and the states. He’s tried to undermine his political opposition to ensure they no longer pose a challenge to him and his allies. In part, this is Donald Trump's transactional approach to power. But it's also political retribution – a form of revenge on those whom Trump believes did, or tried to do, the same to him.
President Trump has accused the Biden administration of weaponizing the Department of Justice to imprison him and of promoting a "cancel culture" approach to right-wing speech, including by deplatforming Trump himself from social media after the January 6 Capitol riots.
Trump says the left in America has demonized him and his allies as "fascists" in ways that promote political violence, and he can point to two attempts to assassinate him during last year's election campaign as well as the recent murder of conservative activist Charlie Kirk to make his point.
The president's choices have wide-ranging and lasting implications. Inside the United States, the president has won the total loyalty of the Republican Party and the reliable support of Republican lawmakers for his revisionist legislative and executive agendas.
He has begun a sweeping purge of America's professional bureaucracy – which Trump and his supporters call the "Administrative State" – and replaced career civil servants with political appointees who are personally loyal to the president. He has weaponized the "power ministries" – the FBI, the Justice Department, the Internal Revenue Service, and many regulatory agencies – against his domestic political adversaries. And he has secured executive impunity from the rulings of an independent but no longer coequal judiciary.
In short, President Trump is replacing the rule of law with the rule of Don at home, much like he’s embracing the law of the jungle – where the strong do what they can and the weak suffer what they must – internationally.
Unlike the Gorbachev and Deng revolutions, Trump's revolution follows no grand strategic plan. Instead, it's a relentless pressure campaign to test the limits of what can be done on every political front – a commitment to act opportunistically as the crises these policies create open new possibilities to consolidate ever more power. This plan was launched by targeting those of Trump’s opponents who are most vulnerable and least organized, such as undocumented immigrants, green card holders, transgender people, and elite universities. The administration has since moved into the broader political categories of funders, supporters, and enablers of his political opponents. All of this is being undertaken with the intention of normalizing behaviors that have long been politically taboo.
Will Trump’s revolution succeed?
How much more can President Trump accomplish before next year's midterms or by Election Day 2028?
Partially, it's a matter of degree. The United States already has a structural bias toward Republicans because of the Electoral College system through which presidents are elected. A candidate can win the popular vote but lose the presidency thanks to the demographic and geographic distribution of electors, which confers a roughly 2-percentage-point advantage to Republican candidates. Add aggressive gerrymandering – with both parties rigging district maps – and elections become even less representative, less competitive, less legitimate.
More concerning is the possibility of President Trump deploying the National Guard in Democratic cities under the guise of a declared "national emergency" to suppress voter turnout. Federal probes into Democratic fundraising and organizations already underway add to these pressures, making these tactics increasingly plausible – and the election is still more than a year away.
To be clear, I'm not suggesting Trump runs for a third term or suspends elections. The Supreme Court would block both moves. But uncompetitive elections? Elections that look more like a single-party system than a competitive representative democracy? With the broader checks on presidential power now in question, that's increasingly plausible.
Trump's grip on the Republican Party and the Democratic Party's current divisions mean the legislature functions less independently from the executive. Even if Democrats retake majority control of the House of Representatives (a Senate flip is very unlikely), they’ll have no power to enforce subpoenas or force a defiant executive branch to cooperate with their oversight efforts.
America's judiciary remains independent, but its power now pales in comparison to that of the executive. The Supreme Court, aware that Trump could refuse to comply with decisions he dislikes, regularly limits the scope of its rulings to preserve its own institutional legitimacy. Though lower courts aren't as restrained, their decisions can be and often are overturned, giving Trump more leeway to consolidate authority.
The media, constrained by profit-driven corporate owners, faces pressure from above to avoid antagonizing the White House. Social media is increasingly controlled by Trump's political allies (more so when the TikTok sale goes through) and, in the case of Truth Social, by Trump himself.
There are still US institutions that can check the president's power. The military stands as a bastion of professionalism – Secretary of Defense Pete Hegseth's blind loyalty to the president notwithstanding – because its culture continues to prioritize service to the nation over loyalty to any individual. The Pentagon's purges of some high-level military officers have made headlines, but not like China's last week – and they don't undermine the military's core operational integrity.
The devolution of political power to states and cities also offers a buffer. Many US governors and mayors are competent technocrats who govern independently of Washington. Trump's attempts to weaken Democratic national powers don't threaten state and city-level governance.
Corporate and financial leaders, uncomfortable with political upheaval, tend to avoid political confrontation that could jeopardize their interests and those of their shareholders. Most will focus on regulatory influence instead.
And then there are the American people themselves. More than five million Americans turned out in thousands of "No Kings Day" protests across the country this weekend, the largest demonstrations since the Vietnam War. President Trump is a historically polarizing and unpopular president. But then again, so is the 2025 Democratic Party.
Remember: Trump was freely and fairly elected in large part because he embodied the political and cultural disruption that a plurality of voters craved. Most Americans who said they cared about democracy in 2024 voted for, not against, Trump, precisely because they were convinced the system was already broken and only he offered hope for change.
The fate of Trump's political revolution is uncertain, but on current trends, a constitutional crisis before the next elections looks increasingly likely. Possible outcomes range from a Republican break with Trump to a sustained political shift toward single-party rule in the United States. Nor can we rule out the kind of political chaos, realignment, and violence that America saw in the decades after the Civil War.
One thing I know for sure: the United States is not going back to the political culture that held sway a decade ago, before Donald Trump descended the Trump Tower escalator. The sooner the world accepts that, the sooner it can figure out how to respond and adapt to a post-American order. More on this next week.
A forensic expert examines the premises of a private kindergarten in the Kholodnohirskyi district hit by three Russian Shahed drones in Kharkiv, Ukraine, on October 22, 2025.
Russia bombs Ukraine after second Trump-Putin date called off
Hours after Russian President Vladimir Putin and US President Donald Trump canceled plans for a second meeting in Budapest, Russian forces hit Ukraine with missiles and drones, killing at least seven people, including two children. Ukrainian President Volodymyr Zelensky argued that the strikes showed Russia hadn’t come under enough pressure for its war, pointing indirectly to the US’s refusal to lend Tomahawk missiles to Kyiv. There had been some momentum for US-Russia talks following last week’s call between Trump and Putin, which the US leader called “very productive.” That has now dissipated, and Trump said yesterday he didn’t want to go ahead with a “wasted meeting.” Trump is, though, meeting with NATO Secretary General Mark Rutte today to discuss the war.
Proposed EU climate rules prompt warning from the US and Qatar
The Trump administration continues to be a thorn in the side of the European Union, this time teaming up with Qatar to warn the customs union of consequences to its trade, investment, and energy supplies if it follows through with a plan to introduce new environmental regulations. The joint US-Qatar letter to the EU referenced not only its supply of liquefied natural gas – a key import for Europe ever since it imposed sanctions on Russia – but also the US-EU trade deal that was struck in July. The proposed EU law will allow member states to impose large fines on firms whose supply chains damage the environment or human rights, and is set to be phased in from 2027. The group is exploring revisions to it this week.
Ireland set to pick opposition candidate for president
Irish voters will head to the polls to elect a new president on Friday, and left-wing contender Catherine Connolly has a resounding lead over the center-right Heather Humphreys in the polls. Connolly has reignited the left-wing opposition after it failed to break the center-right coalition’s century-long grip on power last year. Known for her pro-Palestinian stance and skepticism of the EU, Connolly’s election would put an independent voice – she doesn’t belong to any one party – into the largely ceremonial role.
Hard Numbers: Tragic car crash in Uganda, Europe’s largest economy turns east, Peru initiates state of emergency in capital city, & More
Wreckage of public transport buses involved in a head-on collision is parked at a police station near the scene of the deadly crash on the Kampala-Gulu highway in Kiryandongo district, near Gulu, northern Uganda, October 22, 2025.
46: A horrific multi-vehicle crash on the Kampala-Gulu Highway in Uganda late last night has left 46 people dead. The pile up began after two buses traveling in opposite directions reportedly clashed “head on” as they tried to overtake two other vehicles. President Yoweri Museveni said the government would give five million shillings ($1,430) to each bereaved family.
€163.4 billion: Is Europe’s largest economy shifting east? The numbers would suggest so, as China replaced the United States as Germany’s leading trade partner. The two nations exchanged €163.4 billion ($190.7 billion) worth of products in the first eight months of this year, per Reuters, compared to US-Germany trade of €162.8 billion ($188.6 billion.) Washington has been Berlin’s largest trading partner for the last eight years, but the new US tariffs on the European Union look set to end that streak.
30: On Monday, Peruvian President Jose Jeri declared a 30-day state of emergency in the capital Lima and nearby provinces to battle rising crime. The order follows major Gen-Z led protests for action to combat crime, and similar state-of-emergency declarations under former President Dina Boluarte – she was removed 12 days ago over her inability to get crime under control.
55: Eric Lu became the first American to win the International Chopin Piano Competition in 55 years on Monday. Lu won the “Olympics of piano” after his performance of one of Chopin’s piano concertos and “Polonaise-Fantasie,” entirely from memory.
80: The United Nations isn’t the only organization turning 80 this month: the 80th National Basketball Association season began yesterday, with the defending champions Oklahoma City Thunder defeating the Houston Rockets in overtime in the opening game. The new season has also brought a renewal of US-China basketball ties, as the NBA hosted pre-season games in Macao – the first time in six years that China has hosted games.
U.S. President Donald Trump attends a bilateral meeting with China's President Xi Jinping during the G20 leaders summit in Osaka, Japan, June 29, 2019.
As China’s Communist Party gathers this week to draft the country’s 15th five-year plan, the path it’s charting is clear: Beijing wants to develop dominance over 21st century technologies, as its economy struggles with the burgeoning US trade war, a slow-boil real-estate crisis, and weak consumer demand.
The plan will set the government’s priorities for the industries and policies it will prioritize over the next five years. Here’s what it might mean for China, the global economy, and its relationship with the US.
Addressing inequality to spur the economy. Mingda Qiu, China expert at Eurasia Group, says the biggest difference between the 14th and 15th national five-year plans is “the elevation of social equality” as a higher priority — a strategic shift to address imbalances where stimulus policies have not translated into higher incomes for many people.
The numbers tell the story: while China’s exports and factory investment have kept GDP growth around 4-5%, the domestic economy is sputtering. Retail sales grew just 3% in September — the weakest since last November.
The CCP is betting that reducing inequality will boost consumer spending, something the economy desperately needs. Since 2021, China’s housing market has been in freefall, with apartment prices in some areas down 40%. The crash has wiped out much of the public’s savings — and appetite to spend.
The problem runs deep. “Due to the export-oriented nature of China’s development in the past several decades, China’s domestic sector has never fully developed,” Qiu explains. “The economy faces severe imbalances: too much production and too little consumption.”
This creates a vicious cycle. Weak domestic demand “not only puts Chinese firms in ‘involutionary’ cutthroat price wars, but also creates trade frictions as China pushes those products overseas,” says Qiu.
Beijing's response so far — domestic consumption subsidies for smartphones, electric cars, and other domestically-made goods — hasn’t delivered lasting results. “The impact of such spending is not sustainable because it fades away as the subsidy goes down,” Qiu warns. Real change requires Beijing to “spend more effort in building up people’s income and change people's expectations in its economy.”
A tech-first strategy. The plan is expected to prioritize massive state-led investment in advanced manufacturing and emerging technologies like artificial intelligence and green energy. In AI, China started behind the US, though it’s already emerged as the world’s second most important player. In green technology, it’s looking to expand its already commanding lead.
“China sees emerging fields such as AI and green technology as where China could play a leading role,” notes Qiu, highlighting Beijing’s ambition to “leap forward in championing development in AI and green technology by leveraging China’s advantage in market size and persistent targeted support from the government.”
Over the next five years, China plans to “double down” on investments in AI, semiconductors, digital infrastructure, and advanced manufacturing.
What this means for the world. China’s strategy presents a double-edged sword for the global economy. Its trade surplus is on track to exceed $1 trillion this year. While exports to the US have dipped due to tariffs, shipments to developing countries have soared, prompting nations from Brazil to Indonesia to impose their own tariffs on Chinese goods. Though China aims to diversify away from export-reliance over the next five years, in the short term, it will continue seeking new markets to prop up its sluggish economy.
For US-China relations, this five-year plan signals the end of an era. “Beijing no longer has the wishful thinking that the US-China relationship would swing back to the good old times of the 2000s and early 2010s,” says Qiu. China’s plan focuses on insulating itself against trade shocks and limiting American leverage.
“By focusing on technological self-reliance, China is essentially preparing itself for a situation if the US would cut essential tech supplies to China,” says Qiu.