China is winning

0:00It's 2026, and Trump's got a lot of America's traditional adversaries on the ropes. Venezuela isn't in a position to demand much of anything right now. Cuba's trying to figure out if it's going to get Maduro'd. And now Trump's threatening to bomb Iran, where massive protests have the regime teetering on the brink. The leaders of Iran called they want a negotiation. I think they're tired of being beat up by the United States. But you know who's on their front foot? China. China went toe-to-toe with Trump in the trade war over the last year and won. And on top of that, China's culture has been having a moment.

0:35Maybe you gifted a labubu last year. I don't think labubu is going away anytime soon. Pop Mart is going to keep cranking out these strange, ugly, cute dolls. China's surprisingly good 2025 and what it means for the future. Coming up on Today Explained from Vox.

1:03Every year, hundreds of thousands of people from all over the world flock to Las Vegas for the Consumer Electronics Show, and they spend a week trying to sell each other on the weirdest gadgets you've ever seen in your entire life. This week on The Vergecast, we're talking all about everything happening at CES, from the TVs to the AI gadgets to the humanoid robots that everybody is hoping might someday do your laundry and wash your dishes. All that and much more on The Vergecast, wherever you get podcasts. This is Today Explained. I'm Miles Bryan, guest hosting Today Explained. John Zinn has been studying China for close to 20 years.

1:43He's with the Brookings Institution now, but he started out working for the CIA under George W. Bush and was the China director at the National Security Council for a few years in the Biden administration. Recently, John wrote a piece for Foreign Affairs called How Xi, as in Xi Jinping, China's Leader, Played Trump. I started by asking him for his elevator pitch. We've basically come full circle at the end of this trade war, right? We are back to status quo ante. We're basically in the same position, more or less, where we were with China a year ago. And I think what the Chinese have successfully done over time is whittle down the conversation with the Trump administration so that we are talking instead about the trade imbalances, instead of China's overcapacity.

2:30Never mind a whole suite of security issues like South China Sea and Taiwan. We are narrowly scoped and focused on particular sectors and particular firms like TikTok or particular products like soybeans. And I think all of that is kind of a win for China. That puts them in a comfortable place right now in their discussions with the Trump administration. Okay, Spicy. So if the first year of Trump too in China ends with China getting a lot of what it wants and the U.S. getting some soybean sales and maybe not much else. Where does the story start? Like, what did our relationship with China look like at the end of Biden's term?

3:09The relationship was at a relative high point for this period over the last 10 years or so of more overt and intense competition, right? The two presidents met in Peru. And so, you know, our two countries cannot let any of this competition be in a conflict. There was, you know, some limited cooperation underway on issues like fentanyl, which, of course, is a concern of the Trump administration. We agreed that fentanyl and its precursors will be curbed substantially and the pill presses. That's a big movement. I think the big picture here is that it shows there are areas where the U.S. and China can agree.

3:48And then what we saw as we got past election day and rounding the corner into the inauguration was the Biden administration kind of tying up some loose ends and tightening some of the export controls and technology controls on China that were and these were pretty significant muscle movements. The Biden administration reportedly set to announce a new set of last minute expansive chip export restrictions today. Washington says the aim is to prevent Beijing using the most advanced semiconductors for its military modernization. And what we saw from the Chinese side was not just them responding, I think, more briskly than they had responded earlier in the administration, but more substantively as well.

4:26And I think what they were trying to do was gear up for the return of the Trump administration and for Trump 2.0. And what do you think China wanted out of their first year with Trump, too? You know, what were their goals and how do those fit into their bigger plans? Yeah, I think their primary objective was to get the Trump administration to back off. And I think what China really wants from us is for us to get out of their way and to not slow down their own growth and development. So then Trump takes office again. And this comes back onto my radar as a general interest journalist. Really, last April on Liberation Day, I mean, I'm sure you remember, everybody remembers.

5:03I always say tariffs is the most beautiful word to me in the dictionary. Trump slapped tariffs on nearly every country. It was this huge economic maelstrom. And I remember at the time in that spring, you know, doing research for Today Explained and just reading because I was curious and thinking like, OK, this is going to be another economic Cold War. It's going to change everything. And now, you know, fast forward eight months and doesn't feel like that much changed. Like I'm still buying my daughter a lot of cheap toys from China. What happened? Yeah, and Liberation Day was very striking. I actually was in China when the tariffs dropped for Liberation Day.

5:39And what was really striking to me, talking to both, you know, senior Chinese officials and to the business community across China is that they seemed emotionally prepared for this. there wasn't really kind of the anger or anxiety that I had expected to see and feel. And we were there just as, you know, as things were ratcheting up and we ended up in a place where there was a de facto embargo on Chinese goods because the tariffs were so high. I think what's interesting about the Trump approach is that they started off really trying to clobber China, right, with these tariffs and this period of escalation.

6:10These numbers just keep changing, as you know. And what we've just confirmed from the White House is that the new total rate against China is now 145 % tariff so far this term that's added to anything that was in place before President Trump took office. President Trump threatening a 100 % tariff on China over and above any tariff that they are currently paying starting November 1st. Now, you may be confused about what the tariff rates are. And if you are, then you're certainly not alone.

6:38And I think what happened in especially once China started to impose export controls on rare earth elements, right, which is kind of this esoteric wonky thing that we've all had to become experts on now, right? These are basically elements that go in everything from some high-end military kit to your automobile to basic consumer electronics, right? So these are a loose thread in the supply chain. If you start to pull on it, it can unravel a lot of different industries all at once. And this reflects what the Chinese had did in the previous five years as they were, you know, going back to the gym and preparing for a second trade war, trying to identify tools and countermeasures they could use.

7:17And I think they proved to be more effective than Beijing realized. So you kind of had the seesaw effect from the Trump administration. They came in wanting to clobber China. And then I think they had to back down, right, in the wake of that. Today, Treasury Secretary Scott Besson says the U.S. has reached a substantial framework of a trade deal with China. Trump said U.S. tariffs on China would be lowered to 47 percent from 57%. So the Trump administration had walked back its own export controls on China, which I think many in the national security community, and I think many across both parties, and especially, you know, alumni from the Biden administration, saw us really consequential to our long-term competition with China, right?

7:59Basically keeping our most advanced technologies out of the hands of China. And that has gradually been whittled away by the Trump administration. I think that is a huge win for China.

8:14One thing I thought about Trump and his administration coming in in 2025 is that they were really serious about decoupling economically from China. This felt like the culmination of a swell of intellectual sentiment and debate that had been building for a long time. Did they have a change of heart? What do you think? I think what Trump really wanted, even with all the Sturm und Drang and hostility in the bilateral relationship, I think he ultimately, he wants some kind of deal, right? This is what animates him. And I think it is a core part of his political persona is that he's a deal maker. And I think, you know, the kind of ultimate concretization of that in this administration was the line that they had in the national security strategy that said they want to get to a mutually beneficial relationship with China.

9:03Wow. Would you have expected to see that when you were working for Biden or President George W. Bush? Well, so that's what's interesting is that in some ways it's a departure, but in some ways it feels like back to the future. This is something that could have been said in the Clinton administration, frankly, before China was joining the WTO, or in the Bush administration, or even for large swaths of the Obama administration, that there are challenges in the relationship, but that there is mutual benefit in these economic engagements. And so we need to find ways to figure those out and resolve them.

9:34You pointed out earlier, you know, China's oriented towards the long game. They think big. One lesson it seems like China has taken out of the last year is that being aggressive and sticking to its guns is a smart strategy against the Trump administration. How do you think that's going to play out over the next year, couple of years longer? Yeah, I think that's right. And I think, just as a starting point, too, I noted that deal-making is such an important part of Trump's political persona. But as somebody who's followed Xi Jinping for a long time, it's occurred to me it's not an important part of Xi's political persona.

10:11He's not really interested in making a deal. He is kind of playing the longer game and thinking about how do they accrue advantage over time. And I think what they've learned from the past year, and I think it's really unfortunate from a U.S. perspective is that they have, in fact, improved a lot of leverage. And so I find that really worrisome as we go into 2026, because if you look at what a lot of Chinese commentators and analysts are saying, they not only feel that they had a lot of leverage this past year and they exercised it to tremendous effect, I think better than they had expected, but that their position is actually improving this year.

10:53They are very much mindful of the upcoming midterm elections. And so my theory about this for a while has been that they are working backwards from that. What they want to do is keep Trump invested in the diplomatic process. I think on the premise that the closer we get to the midterm elections, the more leverage the Chinese side is going to have because Trump is going to want some kind of bigger deal. He's going to want something to show for all of his efforts. So it's not that the Chinese think in terms of centuries or imperial cycles. They just pulled up Outlook calendar, I think, and realized one year from now is going to be the midterm election and Trump's not going to want to have this fall apart.

11:30They're just like us brain-poisoned journalists in America thinking about the two-year cycle. That's fine. Exactly. What am I going to be doing from one year from now?

11:45John Zinn, China analyst at Brookings. Coming up, China's soft power is on the rise, too.

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15:37You're listening to Today Explained. I'm Don Wineland. I'm the economist China business and finance editor. I'm based in Shanghai. Okay, Don, in the first half of the show, we talked about China's hard power over the last year. You wrote for The Economist about China seeing an uptick in its cultural exports and growing soft power. How would you define that soft power? Well, I mean, the first thing to say is that China massively underpunches on its cultural exports, right? I mean, this is the world's second biggest economy, an incredible manufacturing power, unparalleled elsewhere. And yet on cultural exports, it's really not doing very well on that front, I would say.

16:26You know, I could read a list of Chinese films that came out this year. And I mean, the vast majority of them, you would not know the names of them if I read them to you. Have you ever heard of the movie Detective Chinatown, 1900? No, I have not. Or dead to rights. And there are a couple other things that happened in 2025 that may have caught your attention. So have you heard of LeBouBou before or Popmart? I have heard of LeBouBou. I have the one and only 24-karat gold LeBouBou. Yeah, so this is something that's actually changing. You know, for many years, I don't think you would have known most of the sitcoms or movies or video games or toys that are being made in China, especially not by name.

17:21But China did much better on cultural exports in 2025 than it has in previous years. Okay, so China's cultural exports are breaking through a little bit. Maybe we can run through the areas that that's happening. I feel like we should start with Labubu. I don't have any Labubus. To be honest, I'm not super Labubu curious, but I do see them everywhere. And I was surprised to learn in researching for this story that they originated in China. Are you a Labubu guy? I'm not really a Labubu guy, per se. But I am very interested in Palpalmata, or Potmart, the company that makes Labubus. So yeah, we can start with Labubu.

18:04It really started getting a lot of attention in 2024. And then in 25, it just blew up. All right, there's three of the hottest dolls right now that are attached to purses. Oh, LeBuboos. Yes, yes. Kitty, you guys, girls with LeBuboos. If you haven't seen one, they're often described as being ugly cute. And they come in these things called blind boxes. So it's a box. You don't know what labubu you're going to get. 24 karat gold. And when you open it up, you can discover, you know, which one it is. They're collector's items. It's kind of like baseball cards in a way. You don't know what baseball cards you're getting.

18:46And, you know, you might get like a rare card or something like that, right? I finally got my hands on a labubu. My first, lalabu. No. Labaloo. No. She got the secret! I told you, sir.

19:10So what else? You mentioned movies? Yeah, Nudge Out 2 really blew up at the beginning of 2025. It's an animated film. It tells a traditional Chinese myth story. You face Nudge Out, Prince of Rhymes. I slay demons for their crimes! It's the highest grossing animated film ever. So, I mean, that's quite amazing in itself. And most of that happened domestically, but I know people in the U.S. that have seen it as well. Chinese films don't get a lot of screen time in the U.S. traditionally, but this one seems like it did break through in some places. Absolutely, yes. Go see it. it is undoubtedly one of the best films of the year.

19:59The animation in Najah 2 should make Hollywood sweat. The origin country and where it comes from just kind of falls away, and it becomes really pure cinema. You know, what was really fascinating to me about this is last year, you would hear senior leaders citing Najah 2, which is very odd, you know, to hear them referencing this animated film. And, you know, really they were pointing to what they see as a success, a cultural success. So that kind of tells you something about how important this movie was. You also mentioned video games. I was looking into one game that looks like it broke through Black Myth Wukong.

20:48I don't get a chance to play video games much anymore, but I used to. And it looked like it got a lot of hype online. Can you tell me a bit about that? Yeah, also incredibly popular within China, but also overseas. I think it's one of the most popular video games of this style ever. This is so cinematic, dude. Wow, it looks so good. It's also based on a traditional Chinese myth. Massively popular starting at the end of 2024. It was so popular that the areas in China that it takes place in started getting a bunch of tourists visiting them. So this type of cultural product can generate economic growth, not just in the selling of the product itself, but also in areas like tourism.

21:39So what do these products have in common that contributed to their breaking out of China as cultural exports in the last year? You know, what do you what do you think is happening here that's different? So I've kind of narrowed it down to two really important things. One is that a lot of the creators behind these things are in their late 30s or early 40s. And there are people that went to university in China just as the education system was changing. A lot more students were going to school at the time. And crucially, it's a time when the internet was relatively free. It was quite easy to get online and look at foreign websites.

22:25So it's a group of people that had access to a lot of foreign ideas. I think they absorbed a lot of foreign culture. That's one thing. Another thing is that these types of products are being funded quite a bit better than in the past. So the Communist Party has its priorities. It wants to be strong in manufacturing. It wants to be strong in areas like electric vehicles and batteries, solar power. It hasn't really focused that much on its cultural products and its soft power. and we can kind of see that changing in areas like animated film or video games. So it's a lot easier for these types of companies to get funding now.

23:11And that just means that it's going to reach a lot more people in China, but also overseas. But I mean, I think there's another factor that has really held back cultural exports in China, And that's just rules and regulations here that make it very, very difficult to make raunchy, sexy entertainment, you know, the type of stuff that we're used to in the U.S. You know, sometimes even, you know, broaching the topic of divorce is difficult in sitcoms. The regulations are very, very strict. You can't even really have like haunted houses in Chinese entertainment because the Communist Party doesn't like superstition and they view this as kind of a form of superstition.

23:59So it's very, very strict in many ways. So there's this one really striking example of this pop band where one of the band members had a public breakup with his girlfriend and he got a lot of bad press. And if you watch the videos of this band now, you can see the band playing and everything looks normal. Except when the camera gets to this one specific member, he's been fogged out. So he's just kind of this puff of fog on stage. What? He's literally been kind of erased from the video. You can see his hands playing the piano, but you can't see the rest of his body. It's very, very odd. Who disappeared him?