And in addition to what the above post explains, there is the fact that China is simply structurally NOT designed the way that western financialized economies are:

The United States consumes what others build.

China builds what others need.

In a conflict over trade, finance, and supply chains—Only one system can scale production, redirect flows, and absorb pain.

This isn’t a war China fears. It’s one it calculated.

The U.S. economy rests on financial rent and military coercion.

Its power depends on maintaining monopoly control over flows it no longer produces: – Software it licenses – Patents it enforces – Currency it prints

The U.S. outsourced labor, privatized infrastructure, and handed capital the steering wheel.

China retained state control and made production the spine of its development strategy.

It now produces more manufactured goods than the U.S., Japan, and Germany combined—because it never surrendered the means to do so.

The U.S. economy is dominated by the FIRE sector—Finance, Insurance, and Real Estate—which makes up over 20% of U.S. GDP (doubling the manufacturing share), yet produces no tangible goods.

Credit flows to speculation: asset inflation, buybacks, and debt servicing—not production.

The U.S. Federal Reserve defends asset prices, not industrial stability. China’s financial system is subordinated to national goals.

Over 70% of banking assets are state-controlled.

China’s “Big Four” banks are among the largest in the world—funding infrastructure, manufacturing, and tech development.

State-owned enterprises control over 40% of China’s industrial assets, directing capital into strategic sectors: energy, telecom, transport, and heavy industry.

One system is ruled by finance.

The other commands finance to serve production and sovereignty.

This isn’t just a clash of policies—it’s a clash of economic systems.

The U.S. economy is structurally driven by short-term profit and private capital. Results: – Core industries outsourced – Infrastructure neglected – Annual trade deficits over $1 trillion, financed via money printing and debt – More GDP from fictitious assets and paper than goods

China’s economy is built under long-term state direction: – Investment flows to infrastructure, industry, and technology—before demand exists – National priorities guide capital, not stock prices – Projects are judged by strategic impact, not quarterly returns – Economic planning spans decades, not election cycles

Where one system waits for the market to justify action, the other builds the foundation first—then scales everything around it.

Only one of these models is structurally equipped for a prolonged struggle.

In response to sanctions, embargoes, and global instability, China did not beg for reintegration. It reorganized.

Xi Jinping’s Dual Circulation policy, launched in 2020, formalized this pivot:

– Internal circulation builds a self-sustaining cycle of production, consumption, and tech upgrading – External circulation reroutes trade and investment toward non-hostile, dollar-optional partners

In 2023: – Roughly 60% of GDP growth came from domestic demand – Manufacturing investment rose 8.5%, led by semiconductors and green tech – Yuan-based trade settlements increased 35% YoY – Most export growth went to BRICS+, ASEAN, and RCEP

This was not isolation.

It was systemic insulation—a deliberate firewall against imperial leverage.

Structural insulation requires monetary sovereignty—not symbolic, but operational.

China is dismantling the architecture of dollar dominance not through confrontation, but through replacement: a parallel financial system rooted in state control, commodity trade, and productive alignment.

– The People’s Bank of China has signed currency swap agreements with 40+ central banks, allowing trade to bypass the dollar – CIPS, China’s alternative to SWIFT, cleared over ¥100 trillion in 2023 across 65+ countries – Yuan-denominated oil contracts in Shanghai now cover nearly 10% of global Brent trade – The digital yuan has processed ¥1.8 trillion, designed for cross-border use under sanction conditions

As Xi Jinping stated, “Financial security is an important part of national security.”

China’s response is not reactive.

It is systemic: an architecture built to protect development from the empire of debt.

Monetary sovereignty alone is insufficient.

If the core technologies remain foreign-controlled, so does the future.

The West does not defend innovation—it defends monopoly. – Intellectual property functions as a rent extraction regime – Licensing locks in dependency – Export bans are not regulation—they are containment tools

China’s answer is structural: – ¥1.3 trillion ($180B+) invested in semiconductor autonomy since 2020 – Huawei’s in-house 5G phones broke U.S. containment in 2023 – SMIC has reached 7nm fabrication under sanctions – Beidou satellite system fully replaces GPS in national infrastructure – AI, quantum, and biotech are now embedded in state-directed research pipelines

You cannot build a sovereign economy on rented code, outsourced fabrication, and foreign-controlled patents.

China understood this—and began severing the licensing leash.

China is not merely defending itself from economic warfare.

It has built the capacity to escalate—quietly, structurally, and at scale.

– IP enforcement is discretionary—China can revoke recognition of U.S. patents and copyrights, undermining entire rentier sectors

• Effective monopoly over rare earth production – U.S. tech firms subject to exclusion from procurement and regulatory access – Divestment from U.S. treasuries is gradual, but real

And beneath the surface:

– China’s undeclared gold reserves are estimated by some analysts at 5,000–8,000 tons, well beyond the official figure – A gold-backed yuan or BRICS trade currency would not need global adoption—just bilateral trust from major energy and commodity exporters – A formal declaration would trigger capital flight from dollar assets, upward pressure on gold, and questions about U.S. solvency in real terms

The U.S. depends on threats and spectacle.

China leverages material chokepoints and policy discretion.

Escalation does not need to be loud to be effective.

It only needs to be unanswerable.

What gives China the advantage in a prolonged economic conflict isn’t just its resources.

It’s the structure of its political economy—shaped by revolution, consolidated by planning, and never fully surrendered to private capital.

– Land is publicly owned. There is no rentier landlord class extracting rent from the productive sector. – The banking system is majority state-owned – The state holds commanding positions in energy, transport, telecoms, and heavy industry.

• Billionaires are allowed but not in command. When they move against the national plan, they are removed—legally, administratively, or, when necessary, terminally.

Capital is permitted to operate. It is not permitted to rule.

This system reflects a historical break from Western capitalist development.

This is not simply a policy difference.

It is a different historical resolution to the question of who governs the economy.

In this economic war, the system that still commands its own foundations holds the strategic high ground

https://xcancel.com/upholdreality/status/1910042585776980026