🔴 Has China Already Won the Tech War?

A research note,

From time to time, for my paying subscribers, I offer a note of reflection or anticipation on the topics ahead. I really have the feeling that China has a new kind of soft power that we struggle to understand in Europe.

Reading this morning's editorial in The Economist, "How America Could End Up Making China Great Again", I decided to write this note.

On April 2, 2025, President Donald Trump imposed massive tariffs, including a 34% tax on Chinese goods, marking a significant escalation in the trade war between the United States and China.

In response, Beijing announced on April 4 that it would impose 34% tariffs on all American goods, effective April 10.

This note explores how Beijing has managed to turn Trump's external pressure into internal leverage, using American tariffs, sanctions and isolation to reorganize its economic architecture and establish itself in the key technologies of the 21st century. It is a classic move, but here China has a focus and resources that other countries do not have.

Between The Economist, my reading of several strategic analyses from the intelligence world, and the handful of conversations I have had in recent weeks, I am left thinking that China is ready to assume technological leadership and open a new era of software soft power.

Between DeepSeek and Manus, Kling and the other software flooding the market, you tell yourself that it is doing what Europe should have done 20 years ago.

Enjoy the read.

Executive summary

Donald Trump's economic nationalism, embodied in massive tariffs and erratic diplomacy, is strengthening the rival it claims to weaken. China's response goes beyond simple trade retaliation: it sets in motion a shift toward technological autonomy, an industrial reorientation and a bid for leadership in artificial intelligence (AI). At the heart of this dynamic: DeepSeek-R1, a Chinese open-source AI already distributed worldwide.

From AI to 5G, from rare earths to underwater data centers, China has built a parallel infrastructure of power: technological, economic and geopolitical. This is no longer a race. It is a post-American realignment without precedent in history.

continued for subscribers