China has won the trade war and now emerging as a global equal if not dominant compared to a USA that is withdrawing from its global hegemony to be a regional power.

It was Chinas mixed economy model that gave it the strategic advantage in productive efficiency and supply chains control that ultimately defeated western imperialism before most westerners even realised what was happening.

WSJ explains what has happened to the Americans still in denial of reality-

BEIJING—China is flexing its muscles, showing new confidence fueled by a belief that President Trump’s retreat from overseas commitments and his focus on the Western Hemisphere and trade deals create unique opportunities for Beijing.

As bonds between the U.S. and other democracies come under strain, Beijing’s new assertiveness also stems from pride over China’s prowess in future-defining technologies, from artificial intelligence to high-speed rail and clean energy. Those achievements come in parallel with a rapid military buildup.

“Trump is pragmatic, and he sees China rising in hard power and also in soft power. By concentrating on the Americas rather than doing a pivot to Asia and spreading too thin on every front, by retreating while being on good terms with China, the Americans can still maybe maintain their dominance of global affairs for 20 or 30 years,” said Wang Huiyao, founder and president of the Center for China and Globalization think tank in Beijing.

The turning point, the consensus in China’s foreign-policy establishment holds, came after a confrontation over trade tariffs, rare earths and export restrictions ended with a temporary truce struck by Trump and Chinese leader Xi Jinping in South Korea in October.

This climbdown from what one U.S. official described as “an economic equivalent of nuclear war”—barriers that would have deprived China, and the U.S., of vital materials and components—has ushered in a new era in Sino-American relations, many Chinese analysts believe: By striking back hard, China has demonstrated its might, earning peer status for the first time and forcing America to retreat.

“The U.S.-China relationship has experienced structural change,” said Wang Yong, director of the Center for American Studies at Peking University. “The American side has realized the power of China, and has learned to be realistic in dealing with China, showing more respect.”

In South Korea, Trump surprised China’s leadership by speaking of a “G-2” condominium with China in world affairs—language that Xi floated at the Sunnylands summit in 2013, just to be rebuffed by President Barack Obama, who viewed it as an abandonment of American allies and of Washington’s global role.

Trump’s endorsement of the G-2 concept signals a recognition of China’s new status, said Wang Dong, executive director of the Institute for Global Cooperation and Understanding at Peking University.

If MAGA prevails and the Trump administration follows through by formally renouncing the idea of strategic competition with China in the new national defense strategy, such a pivot would mark the most fundamental shift in American strategic thinking since the end of the Cold War, if not even the end of World War II, he added.

“MAGA ideology is about saying farewell to the liberal internationalism, dismantling the liberal order, withdrawing from over commitment all around the world, putting forces back into the Western Hemisphere—that’s the new operating concept. And it’s going to be the new normal for years to come,” Wang said.

China’s own rapid development plays a role, too: “In the past technologies flowed to the global South from the West, but now more and more comes from China, especially in the clean energy area. This facilitates China’s trade and investment ties,” Wu said. “Then, political influence follows, of course.”

This new sense of confidence means that many Chinese who used to look up to the West as the source of inspiration and ideas increasingly feel they have little to learn—and more to teach.

“China for 18 centuries was leading the world, and only in the last two centuries was left behind Europe and the West. It’s normal that with the great rejuvenation, it’s leading again,” said Wang Yiwei, director of the Institute of International Affairs at Renmin University. “We have so many people who work so hard, while the Europeans, they enjoy too much freedom, with their vacances. The young Europeans are playing postmodern art, while the Chinese young people work hard in the laboratory.”

The success of DeepSeek, China’s own AI model that uses much less computational power than American rivals—a result, in part, of restrictions on importing top-grade chips—is portrayed by China’s establishment as a validation of the Chinese Communist Party’s rule. So is the emergence of blue skies in Beijing and other major cities, where pollution has been dramatically reduced, in part thanks to the adoption of electric vehicles and tough emission standards.

“Beijing used to be known as the capital of smog. And now I myself am a bit surprised when I smell diesel exhaust in a city in America or Europe, because you no longer smell that on the roadside in China,” said Ma Jun, director of the Institute of Public and Environmental Affairs in Beijing. “I hope it can serve as a compelling example to the world.”