America or China - Who Starts Losing First?

Introduction

It has become a fashionable provocation to assert that "China is going to win, so the question is how America is going to lose." Beneath lies a grim truth: the post-war Western consensus is under unprecedented strain, and the Chinese alternative, for all its contradictions, increasingly appears to many as the more competent steward of a changing world. Yet this hypothesis, though seductive in its starkness, is also simplistic. It assumes linearity where none exists, and it overlooks the profound instabilities besetting both systems. Yes, China may indeed “win” by some measures, but the deeper question is who loses first, and whether either can avoid losing themselves in the process.

The Case for Chinese Ascendancy

China's apparent momentum rests on a formidable range of capabilities. The Chinese Communist Party has shown an extraordinary capacity for strategic patience, long-term investment, and institutional coordination. It has lifted hundreds of millions from poverty, created a sophisticated manufacturing ecosystem, and constructed an international infrastructure network (the Belt and Road Initiative) that ties much of the Global South into a Chinese-led sphere of influence.

Domestically, China has made remarkable gains in AI, green energy, digital currency, and industrial policy. Internationally, it has offered an alternative to the Western model: one that trades democratic transparency for infrastructural delivery, and swaps lectures on human rights for non-interference. To a growing cohort of countries, especially in Africa, Southeast Asia, and Latin America, China is no longer merely a supplier of goods but a vision of development itself.

In contrast, the United States has appeared increasingly incoherent. The Trump presidencies have damaged American credibility abroad and fractured consensus at home. America's inability to manage gun violence, healthcare, infrastructure, or electoral trust paints the image of a once-dominant power now consumed by its contradictions. The dollar hegemony, long assumed to be unassailable, is quietly being challenged by alternative systems and strategic decoupling. The damage to trust and international trade caused by the unpredictability of tariffs, the treatment of former and current allies, and the transactionalism where there was continuity of thinking have all, maybe irreparably, damaged Brand America in the world.

The Fragilities Behind the Façade

Yet China's path is not assured. Its population is ageing faster than any major economy in history, with a shrinking workforce and growing pension obligations. The one-child policy's legacy has created a severe gender imbalance and a society with too few young people to support its elderly. Its economic growth, once double-digit, is slowing, and its real estate crisis has revealed structural weaknesses in its debt-led development model.

Centralisation under Xi Jinping has also produced brittleness. The suppression of dissent may provide short-term stability, but it eliminates feedback mechanisms, making policy errors more likely and harder to reverse. The abrupt reversal of Zero-COVID policies in 2022 illustrated how rigid control can give way to chaotic improvisation. While China has made enormous strides in technological development, it still relies on foreign technology in key sectors, most notably the semiconductor industry.

Geopolitically, China is encircled by suspicion. It has no real allies. Its "wolf warrior" diplomacy has antagonised neighbours and partners, and its coercive tactics, from trade embargoes to military brinkmanship, have alarmed the very nations it hopes to influence. The Taiwan question looms as a geopolitical trap: any miscalculation could provoke conflict and economic isolation.

America’s Enduring Strengths

It is easy to forget, amid its self-inflicted wounds, that the United States retains enormous strengths. It still dominates the high ground of global innovation, particularly in AI, biotech, aerospace, and foundational research. Its university system is unmatched, though under real stress from both culture war and immigration policies. Its demographic profile, while challenged, has historically been bolstered by immigration. It remains the world's most attractive destination for global talent and capital.

The dollar continues to function as the global reserve currency not because it is flawless, but because no credible alternative has emerged to replace it. Despite efforts to build yuan-based trade blocs or develop CBDC alternatives, capital still tends to flee to US Treasuries during times of crisis. Even America's political dysfunction contains within it a paradoxical resilience: decentralisation, federalism, and civil society act as shock absorbers against authoritarian rupture. Or they should.

And while Trumpism has undermined trust in democratic institutions, it is not an irreversible destiny. The 2020 and 2022 elections demonstrated that the centre can still hold. Much will depend on the post-Trump evolution of the Republican Party and whether a new consensus emerges to reinvest in infrastructure, education, and social cohesion.

The Illusion of Inevitable Hegemony

Neither power, then, is guaranteed victory. The 21st century may not produce a new hegemon, but rather a fragmented landscape of regional powers, competing technological ecosystems, and asymmetric influence. The dream of unipolar dominance is giving way to a new kind of contest: one in which stability, adaptability, and legitimacy matter more than raw GDP.

In this context, the question is not simply whether America loses, but how both China and the US manage relative decline. For China, the challenge is whether its authoritarian compact can deliver the social and economic renewal needed for a post-industrial future. For America, it is whether its chaotic pluralism can be channelled into constructive reform rather than self-destruction.

Losing Themselves

Neither power is immune to internal decay. The most dangerous form of "losing" is not defeat by an external rival, but the corrosion of legitimacy, purpose, and coherence from within. China may win the game of infrastructure and industrial strategy, but lose the confidence of its youth and the vitality of its civil society. America may preserve its innovation edge and cultural influence, but hollow out its political institutions and moral authority.

The real question is not who wins, but who loses first. And, perhaps more urgently, who loses themselves in the process?

This future is not foreordained. It is perfectly possible that China continues to play the long game with strategic acumen, and that Trumpism (or something worse) continues to corrode the American republic. However, it is equally possible that China’s contradictions will catch up with it, and that America will reclaim a more purposeful, pluralist future. The task for both societies is not merely to win, but to endure with integrity. That will be the accurate measure of 21st-century power.

Written by Jonathan Blanchard Smith, SAMI Director

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

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Image by Mohamed Hassan from Pixabay