The Price of Illusion: Betrayed Agreements and the Chinese Economic Threat to the World

Despite agreements and promises, China continues to demonstrate a model of deception and economic warfare that undermines global stability. Within weeks of negotiating a “historic trade deal ” between the Trump administration and China, the agreement is already crumbling as Beijing continues to pursue its pattern of deception and economic warfare against America. Authoritative sources confirm that Beijing blatantly violated the Geneva Agreement, continuing to tighten American supply chains. The Chinese economy, based on a state-controlled system, is in stark contrast to liberal economies, making it nearly impossible for any trade agreement with Beijing to succeed. The theory that trade would moderate China's behavior and promote democracy has proven to be catastrophically wrong.

Chinese president Xi Jinping - GettyImages

The so-called "groundbreaking" agreement announced on May 12 by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer was supposed to mark substantial progress in U.S.-China relations. The agreement reduced tariffs from a devastating 145% to 30% for the United States, while China's tariffs dropped from 125% to 10%, with a 90-day "pause" to negotiate a broader agreement. China had promised to remove "non-tariff countermeasures," including export restrictions on rare earths that were choking U.S. supply chains. U.S. officials under the Trump administration called the agreement a "historic trade victory" for America. However, while the Trump team celebrated, Chinese state media boasted about having forced the United States to back down without giving up anything significant. Beijing's propaganda machine celebrated, claiming that "China's firm countermeasures and resolute stance were highly effective" – a clear signal that they considered this a Chinese victory, not an American success.

New U.S. Trade Restrictions

The U.S. Department of Commerce reportedly blocked licenses this week for the export to China of components and equipment used in the construction of nuclear power plants. This decision follows previous export restrictions imposed by the United States, which targeted China's access to key goods, including machine tools, chip design software, butane, and aerospace equipment, amid escalating trade tensions between Beijing and Washington.

Trump and Chinese President Xi Jinping spoke on the phone on Thursday, and Trump stated that "the meeting led to a very positive conclusion for both countries." On Friday, the President announced that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer would meet with Chinese representatives in London on Monday to resume trade discussions.

Rare Earths: An Economic Weapon

A striking example of this strategy is the use of rare earths. China had promised to eliminate export restrictions on these minerals, which are essential for key sectors such as defense and automotive. However, Beijing turned these resources into an economic weapon, holding U.S. defense contractors and automakers hostage. Despite the severity of the situation, this violation has been largely ignored by mainstream media.

A State-Controlled and Predatory System: The "Dual Circulation" Strategy

The Chinese economy is based on a state-controlled system that contrasts with liberal economies, highlighting the fragility of the "engagement" approach adopted by Washington for decades. Economic integration has allowed Beijing to strengthen its military capabilities, threaten Taiwan, and challenge American leadership. The "dual circulation" strategy, launched in 2020, aims to make China self-sufficient in terms of resources and technology, developing both domestic demand and external demand through the markets of the Belt and Road Initiative (BRI). This approach is a response to restrictive policies introduced by the United States to contain China's technological rise.

Globalization and Its "Hidden Costs"

China's rise as a manufacturing superpower has been fueled by globalization, which has led to lower prices for consumers and higher profits for Western companies. However, this process has also brought significant hidden costs, such as job losses, dependence on Beijing for supply chains, and China's industrial dominance in critical high-tech sectors. These effects are not accidental but the result of a deliberate strategy by Beijing to achieve global hegemony.

China's "Liminal Warfare"

Over the past two decades, China has conducted "Liminal Warfare" in the economic sphere, using tactics such as massive subsidies, currency manipulation, intellectual property theft, and restrictions on market access for foreign companies. These practices have eroded significant portions of Western economies, making democratic countries dependent or politically influenced.

State Control Over the Economy

The Chinese government exercises pervasive control over the economy, directing resources and companies, both public and private, toward the goals of the Chinese Communist Party (CCP). State-owned enterprises (SOEs) receive subsidies, low-cost resources, and guaranteed financing, while private companies are often integrated into an ecosystem that favors state interests. Through "super-control rights," the government can influence strategic business decisions, even in companies with private ownership.

Conclusion

China's economic and geopolitical strategy, based on pervasive state control and long-term planning, represents a significant challenge for liberal economies. Through mercantilist practices, strategic investments, and technological innovations, Beijing is pursuing global hegemony, with profound implications for the global economy and international security.