Pepe Escobar
Targeting allies and manufacturing foes is the last card available to the Empire of Chaos.
China is right in the middle of a true tech onslaught - which in several ways works as a sort of wrap-up of Made in China 2025, conceived and launched 10 years ago, and a resounding success even facing at least two tariff/sanctions offensives by Trump 1.0 and Trump 2.0.
A stellar Chinese analysis by Chen Jing, published by my friends at Guancha in Shanghai, concisely interprets the importance of key vectors and variables linked to the tech onslaught. Here's an essential breakdown, with my own comments.
The China-US decoupling
The US as a Chinese export market now represents less than 10% of total exports. In parallel, as I observed in my visits to China this year - from Shanghai and Beijing to Xian and Xinjiang - there's no psychological fear anymore of the much-touted "decoupling". After the Trump-Xi meeting, it became clear that what is already in effect is a managed decoupling. Beijing is cool, calm and collected: after all, it's able to expand in markets all across the Global South. Especially because more trade usually walks side by side with more infrastructure development projects: that's the logic behind the New Silk Roads/BRI.
China's 15th Five-Year Plan
What was recently debated in four days in Beijing - and will be approved next March during the Two Sessions - is already rolling, as in "decisive breakthroughs in key core technologies in major areas such as integrated circuits, industrial machine tools, high-end instruments, basic software, advanced materials, and biomanufacturing." That's all Made in China 2025 material. The conclusion is stark: sooner, rather than later, China simply won't need anything from the Western high-tech industrial chain. Call it industrial decoupling. And the cards, once again, are Made in China.
The US deb crisis
The analysis recalls a comparison between the US debt in 2019, before Covid - $21 trillion, with $300 billion in annual interest - with 2025: $38 trillion, with interest projected at $1.3 trillion, way ahead of the Pentagon's budget. You don't need to be Prof. Michael Hudson to do the math: long-term US debt is the ultimate - unpayable - nightmare. And the US debt has alreay morphed into a US dollar crisis.
The SWIFT factor
The analysis touches on a key issue regarding SWIFT. The US dollar is still responsible for approximately 47% of SWIFT transactions. The yuan share, meanwile, fell from 4.74% in July 2024 to 2.93% in August 2025. So the yuan is not exactly becoming more international. Why? Bacause the yuan is being decoupled from SWIFT, on purpose: China is encouraging the Global South - no less than 189 countries and regions - to use CIPS on international trade/financial transactions. CIPS is progressing non-stop: a year-on-year increase of approximately 42% compared to 2024.
Call it China preparing itself for financial decoupling. Even if Washington decided to cut off China from SWIFT like it did with Russia, Beijing would have no problems leveraging its massive trade power to then really internationalize the yuan.
A new path of globalization, with China at the core?
The rare earth saga.
In 2025, China entered escape velocity. The reaction to the Trump Tariff Tantrum came with unwavering self-confidence. It was a marvel to observe that on the spot in Shanghai. The analysis recognizes that much of China's force derives from its rare earth potential.
Already in July 2023 export controls were imposed on gallium and germanium. This summarizes China's share and position in the production of metals and rare elements, showing that "China's advantages go far beyond the 17 rare earth elements that have recently caused panic and helplessness in the Western camp."
There are 21 elements in the export control list; only seven are medium and heavy rare earth elements. There are several other categories such as rare refractory metals, rare dispersed metals, rare light metals, and non-ferrous heavy metals.
One of the key points of the analysis is that not only the US, but the G7 as a whole no longer has the power to dictate the rules of the global economy. China "can withstand the G7 on its own". Especially when the myth of US industrial strength has been shattered.
That opens a new Pandora's box of discussion: is the global majority already moving to a new path of globalization, with China at its core?
The AI bubble
So AI may turn out to be the US's last hope to turn the tide. The problem is the humongous size of the US AI bubble - a pillar of the US economy. It will eventually burst - and the consequences are unimaginable.
Meta, OpenAI, Nvidia, and others are pouring stratospheric funds into scaling-up large language models (LLMs) and massive data centers. That may not be enough to prevent the AI bubble burst - in an environment dictated by mega-corporations only focused on quick profits.
Cue to a quite worrying prospect fueling their paranoia. Several high-level Chinese models - such as DeepSeek, QWEN and the Kimi K2 series - already dominate global AI open source. The Americans practice "closed-source" - where the thing that matters most is how to monetize their gigantic models.
China is playing a very clever game: delaying the release of Deep Seek R2 - an open source, large-scale model. Why? Because releasing it now would mostly benefit Nvidia's GPUs, boosting their sales and of course the US stock market.
China is nearly ready to complete domestic GPU computer clusters. DeepSeek R2 is built upon these clusters. The result: that will directly disrupt US dominance. As a Shanghai expert puts it: "How can American AI, hampered by power shortages, lack of open-source access, and high energy consumption, compete with the low-power, open-source, large-scale model that offers a significant advantage?"
MAGA: the Magically Globally Aggressive model
At the recent AI Future Summit, Nvidia's Jensen Huang went straight to the point: China would definitely win the US-China AI competition.
A key reason is that China's AI is about productive capitalism - and not speculation. Chinese AI is primarily used in industrial manufacturing sectors such as mining, energy, water conservancy, metallurgy, and military. Large-scale AI models combined with sensors, industrial communication, and automated control at their core, are largely applied to real-life applications, addressing real-life problems in meteorology, marine agriculture, earth machinery, aerospace, civil geology. They truly integrate algorithms and computing power into production.
History tells us that all industrial and tech revolutions have been closely related to real-life production - from steel production and electricity generation to the chemical industry and telecommunications engineering.
All that brings us back to the defining psycho-killer outlook of the Trump 2.0 administration. Incapable of really "winning" a tech war against the largest economy on the planet by PPP, the imperative has switched to harassing and plundering weaker nations seen as easy prey, especially in terms of grabbing their natural resources.
Meanwhile, domestically, Trump 2.0 dreams of reviving manufacturing - the MAGA way. Call it the Magically Globally Aggressive (MAGA) model, deviating attention from what really matters: the monstrous debt; the declining power of the US dollar; the tech bubble; inflation; real geopolitics. Plunder - targeting allies and manufactured foes alike - is the last card available to the Empire of Chaos.