The United States is in desperate economic and military “competition” with China and has lost a lot of ground fast but is it losing its grip?

By “competition”, what the U.S. capitalist ruling class really mean is consolidating their domination over China preventing Chinese society from developing in any way that lessens U.S. control of both China and the rest of the world. China’s policy aims to break out of the strangling imperialist grip. That grip has held the whole Global South down in poverty and dependence for more than a century.

The far-reaching consensus that the U.S. risks losing this battle, unless it takes decisive action, informs not only Trump’s tariffs on China but also previous U.S. policy like Biden’s program of massive subsidies to U.S. industry and technology bans on China. Trump and Biden’s policies to China are different in form but have the same intent: CRUSH CHINA keep it in a position of dependence and weakness.

The conflict is not an example of “great power rivalry” as the chauvinistic anti-China propagandists (including some socialists) argue. The term “great power rivalry” hides the key to the conflict. Actually, it is occurring between two completely different types of societies, which therefore have totally different policies and interests as is obvious in any honest assessment.

China is a huge and politically independent Global South society, historically exploited by the world’s imperialist powers. It is still attempting to emerge from imperialist oppression. By prising imperialism’s fingers, one by one, from its throat, China aims to establish its independent right to breath without U.S. permission and to develop. Chinese policy seeks to reduce the degree that China is economically exploited by the imperialist societies.

The U.S. is the richest, most violent and aggressive capitalist state on earth the imperialist hegemon. Together with its rich-club allies (like Australia), the U.S. desperately aims to maintain its historical position: a strangulating grip on China and the Global South. For the imperial racists, the right of 1.4 billion Chinese people to social progress and dignified lives is not important. The real threat that China poses to imperialism is reducing its own subjugation. Social progress in China also has unknowable implications for imperialism’s grip on the Global South as a whole.

Imperialism’s Historical Monopoly

From the 1990s, a long period of imperial prosperity and stability was built upon wealth (or in Marxist terms value) that was created in China more than anywhere else but was expropriated by the imperialist societies. This century, all imperialism’s growth industries have been built on the foundation of the huge, super-exploited and increasingly productive factory workforce in the Global South. Yet after decades of development along these lines, the same rich-club countries that dominated the world 100 years ago still remain many times richer than all Global South societies including China.

Imperialist prosperity is built upon Global South exploitation that is the key fact underlying the extreme anti-China hysteria today. China’s development does not threaten to subjugate the imperialists. However, imperialist societies cannot exist in their current form without continuing to subjugate China and the Global South.

So, advances in China do threaten imperialism. It is threatened with reduced ability to exploit. Imperialist dependency on parasitism cannot be overcome without a serious reduction in profit and income, that is: fundamental crisis.

The reason the imperialist countries are able to secure for themselves much of the wealth produced in Global South factories (including those they do not own) is ultimately due to their technological and scientific dominance. That is the key to the imperialist stranglehold something accepted both by imperialist and Chinese policy.

The question “is China breaking the U.S. stranglehold?”, is really asking “can China break the scientific stranglehold of the U.S. and other imperialist states?” To answer that question adequately, we need to exactly understand how the technological and scientific monopoly works in global production for the capitalist world market. This includes understanding the global productive division of labour between imperialist and Global South countries.

Broadly speaking, modern imperialist dominance has been based on a monopoly over the capacity for continuously “revolutionising the instruments of production” (as Marx, much earlier, put it in the Communist Manifesto). Domination over the ability to continuously develop the most scientifically and technically advanced aspects of the labour process has allowed the imperialist states to maintain monopoly dominance over the labour process as a whole. This enabled them to extract value from the other (non-monopoly) processes they don’t control through a process of monopolistic price setting resulting in unequal exchange of value on the world market (King, 2021, 136).

Underlying the “neoliberal globalisation” of production processes in the 1980s, 1990s and 2000s was a high degree of specialisation in the type of labour different countries contributed. The global division of labour became (and largely remains) polarised in a manner that parallels the polarisation between the wealth and income of countries. Global South countries specialise in what Samir Amin once dubbed “ordinary” labour of various types (Amin, 1976, p.211). The imperialist states specialise in and monopolise the opposite type of labour: high-end technical and scientific labour.

This is true even for complex products independently brought to market by Global South producers. For example, if the Chinese produced passenger aircraft, the COMAC C919, relies on U.S. and French companies such as General Electric and Honeywell for advanced components like engines, avionics, auxiliary power systems, “fly-by-wire controls” and navigation systems then these imperialist based monopolies can extract super-profits, even if COMAC runs at a loss or the imperialist corporations cause it to (King, 2021, 244). This question of the balance of productive power within products (whether aircraft, phones or factory machinery as examples) is completely obscured by most economic statistics that suggest China is surpassing the imperialist societies.

China has not started to invent or bring to market fundamentally new technology that is “revolutionising the instruments of production”. No major, new-to-the-world scientific technology comparable to major historical examples like electricity, oil, or the internet has been developed and brought to market by Chinese producers. In all likelihood that can never happen within the confines of the capitalist world market (King, 2021, 258). This limitation on China’s possible development within the capitalist world market is a different issue from what scientific-social development is possible outside of the capitalist market.

The global pattern of polarised specialisation within the labour process (and therefore of the productive process) maps precisely onto the pattern of the polarisation between poor and rich countries in the world. In fact, imperialism’s monopoly over the labour process is the principal cause and enforcer of the global wealth divide that characterises the imperialist system. Poor countries specialise in “ordinary” labour. Imperialist societies specialise in high-end and scientific labour (King, 2021, 114).

The actual development of the world labour process along these lines also clearly corresponds to the framework established by Lenin’s Marxist theory of imperialism as monopoly capitalism. By applying Lenin’s theoretical framework to the labour process itself especially in the neoliberal period we can clearly show how the divide between monopoly and non-monopoly labour processes explains the persistence of the global wealth divide, even in the context of Global South industrialisation (King, 2021, 159).

The Historical Rhythm of Forming and Breaking Monopoly

Commercialisation of new technology is the fundamental basis of the super-profits of the monopolist corporations based in the imperialist states. The textile industry in Manchester in the 19th Century, the auto, shipbuilding and machine tools of the U.S. in the 20th Century, or the “Magnificent Seven” giant U.S. tech monopolies today all obtained super-profits (i.e. higher than average profits) as a result of their technological superiority over contemporary rivals.

However, any given production process that starts out as high-technology ceases to remain so forever. As it becomes more common, well-known, and standardised, the now not-so-new production process sinks more and more into the category of production using “ordinary labour”. Once this shift has occurred, little or no advanced, scientific or technical labour or specialist knowledge is required any longer. For example, that has long been the case for most clothing manufacture.

At the point when production becomes standard there is no longer any basis, at least within the labour process, for companies to monopolise it. As more producers begin to make the same or similar products, monopoly super-profits (i.e. higher than average profits) will dry up and turn into average profits or worse. At that point it is irrational (from the capitalist’s perspective) to keep paying high, Global North wages for labour that can by then be done by Global South workers much cheaper (King, 2021, 147).

Seeing the role of China on the world market over the last decades we are very familiar with the effects of this rhythm of monopoly formation followed by monopoly breaking. Chinese producers have long been renowned for their innovative capacity to reverse-engineer and re-engineer many product types. China must be the most highly developed country globally at engineering the simplification (and therefor cheapening) of products that are identical or similar to more complex monopoly products. This is an important and socially progressive attribute of Chinese production.

While it may serve the advancement of human productive forces simplification does not serve to create a monopoly position for Chinese producers. One recent example is the Chinese DeepSeek AI application. DeepSeek does not outperform the various competing U.S. based chatbots. Rather, it achieves similar results using fewer resources (especially power) and less advanced microchips. DeepSeek has not established its own technological monopoly. Rather, the very nature of simplifying the labour process, i.e. of achieving the same result with less advanced processors, tends to undermine altogether the monopolistic character of that specific labour process (hurting those U.S. companies who had made investment decisions based in the expectation of monopoly profits).

Another example is robotics. Speaking about the prevalence of industrial robots in some Chinese factories, Jimmy Goodrich, a senior adviser for technology analysis to the Rand Corporation told the Singapore news channel CNA, “Obviously China didn’t lead in those technologies. Those are first invented by Japan, parts of Europe, Germany and Korea, but where China has really excelled is driving down the cost of those industrial robots,” (CNA, 2025).

There are two aspects to observe here. One is that this continuous rhythm of monopoly followed by the breaking of monopoly, means that to sustain a monopolistic position across the decades imperialist corporations have had to regularly bring new advanced production processes to market fast enough to stay at the top. As we said, in Marx’s words, they must continuously “revolutionise the instruments of production”. Secondly, when a monopoly is broken by standardisation or simplification of processes that does not create a new monopoly. The old monopoly is destroyed and replaced by non-monopoly production.

Simplification means a given type of production can more easily be carried out by capitalist producers in many parts of the Global South. A producer cannot for long mark-up the selling price of a product (thereby gaining above average profit) if that product could be relatively easily produced elsewhere.

Domination of a standardised (non-monopoly) production process cannot be the basis for sustained monopoly super-profits (King, 2021, 166). That is the problem China faces on the world market today.

The non-monopoly character of most Chinese production explains why China’s apparent dominance in many areas and massive exports does not result in much higher national income. Per-person income in China, measured in U.S. Dollars is currently seven times lower than the U.S. and five times lower than Australia! The massive discrepancy between China’s productive success and its low income and consumption is because the competition China has been winning is to dominate non-monopoly production (King, 2021, 219). Massive expansion of non-monopoly production for the world market cannot pry away imperialism’s fingers from China’s throat or raise Chinese income to imperialist levels.

The “Second China Shock” and Imperial Panic Today

Still, looking at China’s most advanced producers today, an important new phenomenon seems to have begun rapidly taking shape. Crucially, the increasingly rapid pace of Chinese producers adopting and adapting existing technology, and bringing this to market at scale, may have begun undermining the ability of the imperialist countries to market their own new scientific developments in the same monopolistic, super-profitable way that constituted imperialism’s historical model.

Emerging from the pandemic, Chinese policy responded to slowing economic growth with increased government stimulus to manufacturing, especially the “new quality productive forces” including the “new trio” of industries electric vehicles, batteries and photovoltaic products, including solar panels. China’s huge productive capacity in these industries means they are highly dependent on exporting. The resulting wave of cheap, high quality, Chinese exports now threatens to overwhelm competitors in the imperialist states. Dubbed the “Second China Shock“ (Setser, 2024), this new capacity is a large part of what Trump’s tariffs and other U.S. aggression against China are responding to.

The first so-called “China Shock”, which occurred after China was admitted to the WTO in the early 2000s, did not threaten imperialist monopoly over the highest technology aspects of the production process. It accelerated imperialist off-shoring of low-end production that was already heading South. The “Second China Shock” is different. Rather than low-end products it relates to middle-level or mixed products especially electric cars, batteries, and solar panels. These contain higher technology and, therefore, account for a greater portion of imperialism’s profits than China’s previous areas of market dominance. Car making alone accounts for a significant part of sales and profits in most important capitalist economies.

Another aspect of the new situation seems critically important. In the past, Chinese reverse and re-engineering destroyed the monopolistic character of products already in mass production. Imperialist-based producers had usually already enjoyed an extended period of super-profitability. Only after such a long period of accumulating profits were non-monopoly Chinese (and other) producers able to master these production process efficiently, at scale, and begin to dominate them.

For example, in the assembly of personal computers, when the Chinese company Lenovo bought out IBM’s PC business in 2005, IBM had already enjoyed a sustained period decades of super-profits during the time when PC assembly was still a higher-end business. By 2005 it was no longer high-end and IBM pivoted to concentrate on more profitable activities (King, 2021, 159).

Today, in electric vehicles, that is hardly the case. While mass marketing of high-end electric vehicles (EVs) occurred first in the imperialist core,¹ only one company, Tesla, had already reached global mass production before Chinese producers achieved comparable quality. Now, numerous Chinese makers are already mass marketing what is a relatively new product type (or at least sub-type) before the major European, Japanese and North American auto companies have completed the switch from internal combustion engines to electric or even seriously started.

Chinese domination of global electric vehicle production massively complicates the energy transition for some of the largest imperialist companies. Are the US, Japanese and European auto monopolies that historically enjoyed sustained super-profits in the production and sale of internal combustion vehicles now going to transition to EVs where the ability to obtain monopoly super-profits is already significantly undermined by established Chinese competitors? That is not how the imperialist system has worked up until now.

Chinese dominance of global battery production may present an even bigger threat to imperialist dominance. According to the April 28, Australian Financial Review (AFR),

“Fuelled by surging demand within China itself, Chinese batteries account for nearly 90 per cent of global capacity for energy storage systems (ESS), including a market share of more than 80 per cent in the U.S. and more than 75 per cent in Europe.”

In battery production we see the same pattern: Chinese producers have achieved a similar product to their imperialist competitors but cheaper.

Non-Chinese high-nickel content batteries most often made in South Korea have a higher energy density than the standard Chinese batteries which are lithium iron phosphate (LFP). Higher energy density makes Korean batteries a higher-end product but not by much. Chinese LFP batteries are only slightly less energetic but significantly cheaper. According to the AFR article,

“ the rise of cheaper and increasingly high-performance Chinese alternatives, has led to a shift over the past decade towards LFP as the industry standard.” “Korean companies [ ] are building new LFP production lines [and] converting some high-nickel ones [to LFP]”.

Korean battery makers like LG and Samsung are yet to produce LFP batteries competitively at scale so they trail China in what has become an industry standard. The same basic problem seems to be occurring across both battery production and EVs. Higher cost producers in high wage countries have difficulty competing with China in a what may not be highest-end technology, but is becoming standard in new mass production sectors.

Especially panicky for the imperialists is that batteries, electric vehicles, photovoltaics and robotics look precisely like the types of emerging industries that imperialism would have dominated historically. The transition to renewables and the push for greater automation mean these industries could expect to have an extended boom period.

Historically, such mammoth new market openings would have been the source of massive profit bonanza for those who dominate the roll out. But in 2025 it is China, not the major imperialist states that dominates huge areas of the production of solar panels, batteries, and electric vehicles. This shows how threatening China has become to imperialism’s ability to reproduce itself as imperialism of the old type.

Is Imperialism’s Monopoly Still Possible?

The threat to imperialist stability is not that China is itself beginning to replace the imperialist societies and take over the role of revolutionising the means of production i.e. itself become the monopolist. This is why China cannot itself become imperialist. Still, China’s achievements in developing its productive forces are epoch defining. Advances in non-monopoly production achieved in China seem to have reached the point where they are beginning to fundamentally undermine imperialist monopoly formation in critical economic areas.

It is easy to see that if new monopolies are being broken too quickly, that makes monopoly formation itself impossible because the scale of investment required to create and bring to market a major advanced technology is usually enormous. If an extended period of super-profits cannot be expected, because Chinese or other Global South producers are developing too rapidly, then no monopoly is possible on a capitalist basis.

If the imperialist societies can no longer achieve sustained super-profits by developing or marketing new production processes in the way they have historically, that fundamentally undermines the ability of imperialism to function as it has been. For a start, high levels of material consumption by working people in the Global North the key social basis for working class support for imperialism can only be secured on the basis of sustained imperialist super-profits.

Without super-profits, imperialist societies cannot accumulate the scale of capital and social, societal resources necessary to constantly re-invest in monopolising the continuous “revolutionising the instruments of production” (quoting Marx once again). Capitalist imperialism’s historical ability to monopolise to itself humanity’s collective scientific and technological progress relied on making products that it could sell on the market at prices high enough to give it super-profits. If the super-profits break-down, so does imperialism’s stranglehold on the world’s social resources and the imperialist system as we know it.

1. General Motors released the very popular “EV1”, a mass market EV in California between 1996 and 1999. ↑

An earlier version of this article appeared as “Is China Finally Breaking the US Stranglehold?“ in Monthly Review Online on 5 June, 2025.

Sam King, Imperialism and the Development Myth: How rich countries dominate in the twenty-first century, Manchester University Press, (2021).

Samir Amin, Unequal Development: An Essay on the Social Formations of Peripheral Capitalism, Sussex, Harvester, (1976), p. 211.

Brad Setser, A Second China Shock with Brad Setser, Council on Foreign Relations, (April 30, 2024), https://www.cfr.org/podcasts/second-china-shock-brad-setser

China and South Korea extend battery battle from EVs to grid storage, Australian Financial Review, (April 28, 2025), https://www.afr.com/world/asia/china-and-south-korea-extend-battery-battle-from-evs-to-grid-storage-20250428-p5luw7

CNA Insider, U.S. And China Pause On Tariffs, But Why A Trade War Is Still Brewing, CNA Asia, (May 27, 2025), https://youtu.be/oAsuOiphCFA?t=674

Source: https://red-spark.org/2025/09/06/the-second-china-shock-finally-breaking-the-u-s-stranglehold/