China appears to be on an inevitable path to reshaping the world and hopes to do so in its favor. Xi Jinping has repeatedly called for a world where China exercises complete sovereignty over how it governs—a world detached from Western political liberalism and the U.S.-led order. In pursuit of this goal, China has leveraged the sheer scale and mass of its industrial base to expand its economic, military, and political influence globally. This has resulted in intensified competition in economic and military power with the West, as well as the establishment of new norms and institutions within the international system.

Undoubtedly, the world has moved away from a status quo without China. However, China’s ability to transform the world order to its preferences remains seriously challenged by the structure of its political system, the growing difficulties in its economy, and an increasingly vigilant international community that monitors its every move. Ultimately, whether China can reshape the global order in its favor depends on how it reshapes itself.

A New World Made in China

Following three decades of a command economy and near-complete autarky, China began a series of economic reforms in the 1980s. Another 30 years later, China has emerged as the world’s dominant manufacturing power. In 2011, it surpassed the European Union as the economy with the highest manufacturing output in the world and—after meeting its own large domestic demand—secured the largest share of the world’s manufacturing exports. China’s largest imports—minerals and semi-processed goods—further highlight its role as the world’s largest processing hub.

Policies like “Made in China 2025” have further enhanced China’s manufacturing capabilities, and its dominance in critical mineral supply grants the nation significant influence over other countries’ strategic sectors, such as semiconductors, renewable technologies, and defense. The industrial prowess China has demonstrated serves as the foundation for its increasingly active engagement with other countries, multilateral platforms, and international organizations.

Notably, BRICS represents an important attempt by China to organize divided yet economically linked developing countries and create an alternative economic bloc in the world. This multilateral platform provides China with opportunities to experiment with alternative financial institutions and maximize its gains from exports to Global South countries. Nations closely aligned with China, such as Russia and increasingly Brazil, have played a role in advancing China’s strategy to establish an alternative economic order that operates outside the Western liberal framework.

China’s growing industrial power also gave rise to the Belt and Road Initiative (BRI) in 2013. Beijing’s strategic aim of fostering a more interconnected and secure Central Asia, combined with its commercial goals to safeguard critical energy imports, materialized into a grand economic initiative that also allows China to accumulate political influence wherever the BRI extends. The initiative has attracted numerous countries, with participants spanning East Asia, Europe, and Latin America. This enables China to expand its soft power in developing nations, building bilateral relationships through aid and loans.

Another important intended outcome of the BRI is to realign various global trade corridors in the Greater Asian and Indo-Pacific regions to align with China’s economic interests. The BRI infrastructure projects have aimed to achieve this goal with mixed outcomes, but the surge of Chinese activities in countries with BRI projects has provided China with more investment and trade opportunities. In the Middle East, for example, China has been increasing its investments in healthcare infrastructure and other non-transportation projects. Chinese products and standards, which are embedded in the projects China finances, also proliferate throughout the BRI regions, fostering long-term technological dependence on Chinese goods.

The expanding trade network between China and a growing number of developing economies also creates opportunities for China to reshape the global financial order. A notable example is China’s effort to internationalize its currency, the yuan (RMB). Recent initiatives, such as promoting the use of RMB in cross-border settlements and securing its inclusion in the IMF’s elite reserve currency basket, have enhanced China’s financial influence over other countries. Although the RMB faces structural challenges to further internationalization—particularly due to China’s strict capital controls—the growing role of RMB in international trade complements China’s industrial power in reshaping the global economic order.

Selling the Chinese State

China’s industrial and technological power extends its influence beyond the economic realm. Intensive state and private investments in technological innovation have positioned China as a global leader in information and communication technologies (ICT), electric vehicles, batteries, solar panels, and robotics. Over the past two decades, China has transitioned from being a major recipient of technological transfers to becoming a leading provider of them.

Most recently, European companies have begun purchasing Chinese innovation firms and entering into technology transfer agreements with large Chinese corporations in the automobile sector. The implications of China’s technological advancements are two-fold. Firstly, China has developed significant surplus capability in high-tech manufacturing and infrastructure development. Through the Digital Silk Road initiative, an integral part of the BRI, and competitive pricing of its high-tech goods, China has been able to export large volumes of its hardware and software, thereby expanding its economic influence on a global scale.

Secondly, countries receiving Chinese technologies often begin to adopt the underlying concepts and designs of these technologies, which are frequently tailored to China’s own political and social management system. Most notably, the Chinese surveillance state is being exported through millions of Chinese-made cameras and, more critically, Chinese-made surveillance software. China exports surveillance technologies to both democracies and autocracies, and Chinese companies that operate China’s surveillance system also provide training to countries seeking to build “smart cities,” an urban design concept that integrates surveillance and communication technologies to maximize convenience for their populations.

In China, smart cities have largely become a reality, with one camera for every three people nationwide and seamless integration of convenience and surveillance through the widespread use of biometrics and cameras for payments and other public activities. As more countries begin to replicate the design of Chinese cities using Chinese technologies and models, global norms around privacy and state jurisdiction are likely to be further eroded. Additionally, China’s advancements in technological innovation are driving systematic changes in international governance.

The Chinese state has actively participated in international standard-setting organizations, which determine industry standards for the production, processing, assembly, or operation of specific products. The number of Chinese standards has grown significantly in recent years, enabling Chinese firms to mandate the implementation of these standards by their foreign partners, particularly in BRI countries. This subtle and highly technical form of influence has long-term implications for the technological use and development in countries that adopt Chinese technologies.

Awakened Lion vs. Descending Eagle

China’s economic growth and technological advancement have also enabled it to make significant strides in catching up with the United States—a national goal long held by Chinese leaders. One of the most critical aspects of this catch-up effort is the modernization of China’s military. To date, China has built the largest army and navy in the world, with a third aircraft carrier soon to become operational. The Chinese military has advanced its armaments to rival top-tier militaries, and its missile, nuclear, and space capabilities are rapidly scaling up.

Additionally, China has aggressively improved its cyberwarfare capabilities, with cyberattacks attributed to China becoming increasingly sophisticated, damaging, and destructive. This expanding military power has made China increasingly assertive in its neighboring regions. It has ramped up shows of force in the South China Sea, around Taiwan, and toward Japan and the United States. More Chinese military patrols and exercises have been observed in East Asia, sometimes conducted jointly with Russia and other countries.

Paramilitary forces have also played an increasingly important role in China’s strategy. The recent Joint-Sword 2024B exercise around Taiwan featured significant involvement from the China Coast Guard, highlighting China’s growing ability to engage in forceful coercion through gray-zone tactics and paramilitary assets. Collectively, these developments signal China’s intent to break away from the U.S.-led status quo in the Indo-Pacific and reshape the regional order in Asia to its advantage through economic and military power.

Beyond military advancements, China aspires to achieve great power status that rivals the United States. To this end, China has pursued leadership in global security, development, and governance. In global security, China has demonstrated activism by organizing regional security dialogues, such as the Xiangshan Forum and Shangri-La Dialogue, and establishing regional security organizations like the Shanghai Cooperation Organization (SCO). The nation has positioned itself as a peacekeeper, becoming increasingly involved in peace talks in Myanmar, Ukraine, and the Middle East.

China’s growing willingness to take the lead in regional security and provide security to others reflects its ambitions on the global stage. In terms of development, China’s foreign aid and loans, combined with its emphasis on the “development rights” of Global South countries, have garnered support and goodwill from many developing nations. Perhaps China’s most significant impact lies in international governance, where it consistently re-emphasizes “respect for a country’s sovereignty.” Embedded in this principle is China’s promotion of an alternative international system that refrains from interfering in a country’s governance model.

Essentially, China advocates for a world where security cooperation and economic development are not directed by the West or guided by political liberalism. China has achieved notable success in influencing the norms of the international system. In the United Nations, an increasing number of countries have aligned with China in voting patterns on human rights issues. Many nations have also acknowledged China’s redefinition of “human rights,” shifting the focus from individual liberty and protection to development and prosperity—transforming the concept from individual rights to state rights.

Scaling the Heights, Tripping over Roots

China’s economic and technological power has fueled its activism and assertiveness in foreign economic and security policies. The country has positioned itself as an alternative source of security and leadership in the international system. However, China’s success in translating its material power into achieving its global vision should not be overstated. Significant obstacles remain, the most critical of which may be rooted in China’s political system itself.

The Chinese state governs an expansive country with numerous interests and foreign counterparts, while significant decision-making power resides at the ministerial and local levels. This reality has led to a lack of coordination, compliance, and quality assurance in many foreign policy initiatives, particularly when local interests and incentives diverge from the goals of central policymakers. Xi Jinping’s success in centralizing China’s political system has allowed for greater oversight and supervision over the quality of its foreign policy initiatives. This new structure also makes it easier for China to implement a more cohesive and unified foreign policy strategy.

However, the centralizing institutional revisions and the imposition of party monitoring within government bureaucracies have led to erratic official behavior, oscillating between overcompliance and paralysis. Central directives on foreign economic and security policies may be passively implemented by delegated officials seeking to avoid punishment or, conversely, implemented excessively by those eager to demonstrate initiative and loyalty. This dynamic renders the foreign policy apparatus increasingly inefficient and personalistic, as officials defer difficult decisions up the hierarchical chain and prioritize “easy wins” that align with Xi’s central directives.

These developments complicate efforts by Chinese foreign policy officials to sustain China’s influence abroad as a reliable and responsive partner. Simultaneously, overcompliance with national security priorities by China’s military and security apparatus has resulted in sporadic and seemingly uncontrolled actions that create tensions with targeted countries. Notably, cyber-espionage and cyberattack operations conducted in Southeast Asia have undermined China’s credibility and harmed its interests in the region.

China’s demands on Chinese and foreign companies operating within its borders, justified by national security concerns, have also damaged investor confidence in Chinese businesses and the broader business environment. These challenges have weakened China’s economic appeal and heightened awareness in other countries about the nature of China’s influence on the international order. Beyond the issues within China’s political system, its pursuit of a world aligned with its interests is further constrained by challenges to its economic power. International resistance to a dominant China has prompted many nations, most notably the United States, to reduce and control their economic dependence on China.

At the same time, China faces significant economic headwinds, including a slowdown in growth, stagnant domestic consumption, a shrinking workforce, and an aging society. Confronting an increasingly resistant global environment and mounting domestic economic difficulties, China’s prospects of reshaping the world in its favor appear increasingly uncertain. Nonetheless, China has undeniably reshaped the global landscape through its economic strength and political ambition. The world has shifted away from a U.S.-led liberal order toward a multipolar and contested one.

However, China’s domestic political and economic developments have complicated its pursuit of a world aligned with its interests. The Chinese leadership faces rising and critical challenges in economic performance, societal changes, and the political system. The future of China’s global role and its ability to realize a vision for a new global order will depend on the kind of nation China transforms into. Close attention will need to be paid to the choices Xi Jinping and his party make in addressing these challenges and in how China engages with key countries, particularly the United States, Russia, and India. The contested future of China—and of the world—will not be determined by Xi’s dream but by Xi’s choices.