Opinion
A Capital Outflow
A record level of capital outflow that equals 1.47 trillion rubles has taken place to the bank accounts outside Russia, in a time period between June and August, according to the Central Bank of Russia. For a comparison, the capital outflow had been recorded as 57 billion rubles in the same time period of 2021 (third quarter), which is 26 times less. For another comparison: the budget revenues for the year 2022 were recorded as 25.02 trillion rubles. This means that roughly 6 percent of all budget revenues of the nation were scooped out of the country by the bourgeoisie, only in the third quarter of the last year. Only then we can add the 543.4 billion and 550.7 billion rubles that are also scooped away in the first and the second quarters, by the “patriotic” bourgeoisie (despite all “sanctions”), who have managed to take out more than 10 percent of the national budget revenues in the last three quarters.
And the outflow did not stop after the third quarter. The Central Bank of Russia has estimated in early December that the Russian citizens had roughly 4.19 trillion rubles (or 66.65 billion USD at that time) in foreign bank accounts, as of November 1st. Also, according to the data released by the Central Bank of Russia on February 13th, the total assets of Russian citizens in foreign bank accounts have summed up to a total of 94.3 billion USD (or about 7 trillion Rubles, that is almost 30 percent of the national budget revenue of 2022). This means that the deposits in foreign bank have more than tripled over the last year. This alone is an enormous capital outflow, and it is just the tip of the iceberg. These data only shows the outflow that the Central Bank has allowed. The account deposits of Russian citizens in foreign banks had reached 0.5 billion USD in January 2022, which have risen to 4.3 billion USD in February. Almost all these transactions have taken place between February 24th and 28th. The outflow has lost its momentum between March and May, since the Central Bank of Russia had imposed harsh restrictions on foreign exchange transactions. And as soon as the banks have relaxed some these restrictions, the outflow spiked again, reaching 48.9 billion USD in the second half of the year, or making up to the 77 percent of the total annual outflow. Even this can be considered as a very modest estimate, since it is not possible to get information from the countries where the outflow has occurred to after the sanctions.
Moreover, the total capital outflow is not only these 70-100 billion USD in foreign banks. The Central Bank had estimated last July, that the total capital outflow in 2022 would be 243 billion USD. This is a record in the last 10 years, with second happening in 2014 after the annexation of Crimea, being 152 billion USD. The total capital outflow between 2012 and 2021 is around 576.5 billion USD. Capital that equals half of that in the previous 10 years, was scooped away in just one year.
Of course, this amount includes that of the foreign companies which sold their assets in Russia or, stakes that Russian companies hold in foreign countries. So, the capital outflow is often not done by carrying huge stacks of cash across the border. But it is done by shifting enormous sums to offshore companies, and that is pretty much like carrying huge bags of cash.
So, this enormous capital outflow can take place in every means and there are not much obstacles to doing this. According to the Head of the Russian Central Bank Elvira Nabiullina, who has spoken around the end of the year, saying “This is not a matter of concern for us in the current situation. We do not consider it necessary to take any special measures in this connection. “, and adding that “As confidence in macroeconomic stability, price stability strengthens, these funds will return to the Russian banking system, to rubles.”
I get goosebumps as soon as I hear “macroeconomic stability”
Another important statement from the Central Bank was that “import substitutions have been reduced to the cost of standard of living”. So, almost 400 billion USD in assets have been frozen in western banks, there has been a capital outflows close to 250 billion USD this year, but it is import substitutions were lowered to the cost of standard of living. And this statement was made right after the announcement by the US government that American companies would be 152 billion USD of subsidies in microchip production.
One of the most prominent economists in Russia Mikhail Khazin, posted an article on Telegram that “he had initially written for a media outlet, but he did not manage to get it published”, in which Glazyev immediately posted. He claimed that the Russian “fiscal bloc” (the Ministry of Finance and the Central Bank) were still represented by the liberal elite, who still wanted Russia to remain in the “necessary liberal” international community. He says, they must meet the basic requirements of the “Washington Consensus” to achieve this. Two of these requirements would be: “Prohibiting all Ruble investments and motivating further capital outflow”. And the second would be maintaining the liquidity of the global dollarization over the nation’s own interests”. Khazin explains the recent capital outflow that broke records in the first three quarters of 2022, with these theses.
And the relationship between economics and politics gets even more evident at this point, while Khazin considers this stance of the “fiscal bloc” as high treason.
Taxation Of The Grand Bourgeoisie
Putin’s speech at the Eastern Economic Forum in early September was of great programmatic importance. I have evaluated his speech under “9 crucial points” back then. And on the eighth point, I stated:
“The Kremlin keeps stressing that they have used and will continue to use ‘the market mechanisms and instruments’ to seize the ‘excess profit’ of the grand bourgeoisie. This could shows that the grand bourgeoisie has not succeeded in its lobbying efforts together with the ‘fiscal bloc”.
In his speech, Putin has described these market instruments as follows:
“These will be market instruments that are known by all: it can either be customs clearance or recovery of the excess profit in some other ways”.
The target of these words was neither the petty bourgeoisie that emerged after the crisis, nor the new middle bourgeoisie that has now started to flourish after the disqualification of the Navalniyite middle bourgeoisie after February 24th. They too, managed to accumulate an “excessive profit”, and are still accumulating, but the real target was the grand bourgeoisie, which were mainly active in the fields of telecommunications, mining industries and finances, and clearly reeked of a dangerous threat (even if Putin had given a guarantee of “private property” at the same time).
Despite Putin’s programmatic speech, the aforementioned issue has not come up for a long time. Finally, on February 15th, around four and a half months after the announcement of the program, the Deputy Finance Minister Alexey Sazanov has announced that “started working” on two resolutions on this agenda: A voluntary payment, or a kind of involuntary taxation.
Why did it take so long or why did this even come up in the end? The answer to the first question is: We would not expect the grand bourgeoisie to not resist the taxation of excess profit, imposed by the Kremlin. Moreover, the economic situation was relatively stable from the beginning of September and until December when sanctions on crude oil exports were imposed, so back then the first shock was absorbed, and the nation has turned from the brink of total collapse. This may be an exaggerated rhetoric, but definitely not a false one. The Deputy Prime Minister Andrei Belousov has clearly stated that “the economy is at risk of collapse” on December 27th when in describing the situation in March, and that he “thinks that the economy is about to go completely out of control”. Meanwhile Belousov has addressed the Ministry of Transport, Ministry of Industry and Trade and the Central Bank of Russia when crediting those who managed to reverse this doomsday scenario, but did not mention anything about the Ministry of Finance. Therefore, the resistance by the grand bourgeoisie must have gained more momentum in such atmosphere of a relative satisfaction.
And the answer to the second question is: The “fiscal bloc” had to stop further hindering this program, since the problem of financing the government budget, which is caused by a massive decline in the natural gas and oil revenues due to sanctions and the sabotage of Nord Stream 2 pipeline, keeps threatening to destroy the Russian economy.
The Finance Minister Siluanov spoke only two days after Sazanov and stated that he expects “industry giants” to make a “voluntary contribution” of 300 billion rubles to the government budget in return for their excessive profits in 2021 and 2022. Such funds would not cover the expected budget deficit since the budget deficit in 2023 is the expected to be around 2.9 trillion rubles (which is 2 percent of the GDP), and can reach 5 trillion rubles due to the large decrease in oil and gas revenues that occurred as a result of the sanctions. We can understand that the Ministry has alleviated the taxes on grand bourgeoisie to an enormous scale, and has reduced it to around 10 percent of the expected budget deficit even with the most optimistic estimations. But even this was not enough, so the minister tried to make it a “voluntary action”. Moreover, the ministry must have negotiated with some these “industry giants” and tried to get their consent, that is because according to Siluanov: “These industry giants are ready to share some of their profit, with the state”. And on top of that, Siluanov also announced the good news that oil and gas companies would not be charged an additional tax over their profits over these past years.
There seems to be a mismatch between the words of the minister and his deputy; While the deputy minister speaks of two resolutions, there is only one solution according to the minister. While his deputy also points out the hard way, the minister states that there is already an understanding with the grand bourgeoisie on this issue.
However the grand bourgeoisie does not seem convinced these days. Head of the Russian Union of Industrialists and Entrepreneurs Aleksandr Shokhin, has made it clear that voluntary action would not work out. But this was not as if “there could not be a thing called voluntary tax, we should force it properly”, but rather something like “there cannot be a tax on excess profits, since things like private property and the free market are untouchable, we should instead reduce taxes so that the free market can invest even freer and the concept of big government is nonsense anyways” etc.
An Involuntary Volunteerism
On the exact same day that Siluanov has made the voluntary tax announcement, the Kremlin press secretary Dmitry Peskov was asked about this issue at a press briefing. Peskov noted that talks are still ongoing, while similar practices are very common all over the world, and that the government is in a constant contact with representatives of large businesses on this issue, while adding: “The key word is voluntary, but, of course, the interaction between the country’s leadership and business, and the government and the business sector, is a two-way street. Therefore, of course, it is necessary that both sides, although we are all on the same side nonetheless, were clearly aware of the realities that we live in today and the needs the country has”.
That was regarded as a very diplomatic response, and although it did not imply a direct challenge to the grand bourgeoisie, which he had comforted with his message of cooperation, the warning or some may even say the threat, was clear enough. The Kremlin as it is the rational thought, has no doubt that the grand bourgeoisie will not show any voluntary willingness, therefore the formula of involuntary volunteerism must have seemed more practical. The force may bare more fruits, and with the threat of enforcing it, some giant industries may volunteer to contribute and receive a reward in the form of a state decoration, but the division of labor between those who can afford it and those who cannot is such that the Kremlin will not hesitate to introduce some new ways of encouraging volunteerism, in order to overcome the foolishness (that word can be used conditionally), of the “fiscal bloc”.
However, the “fiscal bloc” will not hesitate to look for ways to minimize the profit losses of the grand bourgeoisie. As a matter of fact, the first major move came on the exact same day, from the bloc’s one significant part, the Central Bank. Not only did the Central Bank back the Ministry’s volunteerism plan, it also proposed to cancel the debts of these companies to the government banks in return for the “voluntary contributions” of this class, that totals 300 billion Rubles (according to the report of Banksta, one of the closest affiliated outlets of the grand bourgeoisie).
This is a marvelous bribery! Let us first cancel all short, medium and long term loans, then you can “donate” us, and let us call this volunteering.
The central bank’s call for peace was quick to earn Deripaska’s approval. The owner of RUSAL wrote: “This would be a balanced decision, if not the ideal”.
The “conflicting alliance” continues, as the existence of this alliance does not stop the conflict. The Kremlin will continue its involuntary volunteerism imposition, but it can accept to cancel some of the long-term loans, while it could be a little bit difficult to cancel medium-term loans, and it will surely reject to cancel short-term loans. While it is certain that the problem cannot be solved with such negotiations, while the Kremlin will continue to go for the grand bourgeoisie to finance the government budget, the fiscal bloc will continue its efforts to fend it off, as oil and gas revenues fall rock bottom.
***
There have been two new developments confirming what I have claimed, after I have written them. So, it impossible to end this article without mentioning about them briefly.
First, Putin’s programmatic speech on February 22nd, included the announcement that they would not back down on taxation, despite the pressures from the bourgeoisie and the “fiscal bloc” (he openly admitted “things are tough”). Despite the insistence and the determination of the “fiscal bloc”, the cancellation of long-term loans was largely off the agenda after this speech.
The second is the statements made by Alexander Shokhin, the same day that of Putin’s speech. Shokhin said, they had reached an agreement with the government for a one-time “windfall tax”. The fact that this is defined as a tax, and not as a voluntary contribution, clearly shows the Kremlin’s dedication. And for Shohin, there is only one question that remains: That is how to estimate these “excess profits”.
Opinion
Chinese diplomacy ascendant under Xi: All roads lead to Beijing
Beginning in late 2025 and extending throughout 2026, one of the most striking developments in world politics has been the successive convergence of major powers upon Beijing. Direct, high-level engagement with China by actors at the very core of the global system—such as the United States, Russia, the United Kingdom, France, and Germany—is widely interpreted as a potent signal of a shifting international order. These visits are indubitably far from routine diplomatic encounters. Rather, they represent symbolic and strategic maneuvers indicative of a fundamental realignment of the world’s power centers. In particular, the intensive engagement with China by four of the permanent members of the United Nations Security Council within a brief window demonstrates that Beijing has evolved far beyond a mere economic powerhouse, establishing itself as a principal locus of global diplomacy.
For decades, the global order was predominantly US-centric. Following the end of the Cold War, the United States attained an unrivaled position militarily, economically, and diplomatically. China, conversely, was viewed as a rapidly growing economy defined primarily by its manufacturing capacity and cheap labor force. While Beijing possessed influence within the global system, the primary decision-making mechanisms of world politics remained firmly anchored in Washington. However, the transformation of the past two decades has elevated China from a mere economic giant to the epicenter of global strategic competition.
Today, China stands as one of the most pivotal actors in world trade. The vast majority of global supply chains are intricately linked to Chinese networks. Across a multitude of critical sectors—ranging from electric vehicles and battery technologies to artificial intelligence and solar energy—China has established itself as both a dominant producer and a global standard-setter. This immense economic capacity has naturally engendered commensurate political and diplomatic leverage. Global leaders now recognize that international challenges cannot be effectively managed by bypassing or ignoring China.
It is precisely here that the core significance of these recent visits to China becomes apparent. Donald Trump’s journey to Beijing to meet with Xi Jinping underscored that despite the intense rivalry between Washington and Beijing, direct engagement has become an absolute necessity. Similarly, while Vladimir Putin’s strategic alignment with China has long been established, Moscow’s deepened cooperation with Beijing in the wake of its profound crisis with the West has significantly bolstered China’s geopolitical weight across Eurasia. Meanwhile, British Prime Minister Keir Starmer’s visit was interpreted as a sign of Europe pivoting toward a more pragmatic trajectory in its policy toward China. The prior engagements of French President Emmanuel Macron had already demonstrated that Europe has no desire for a complete decoupling from China. German Chancellor Friedrich Merz’s discussions in Beijing were particularly noteworthy from an economic standpoint, as the Chinese market remains indispensable to German industry. Furthermore, the intensive diplomatic relations maintained by Serbian President Alexander Vučić with China demonstrate that Beijing’s influence on the European continent is by no means confined to major Western European states. Through infrastructure investments, transport projects, technology transfers, and defense cooperation in recent years, Serbia has emerged as one of China’s closest partners in Europe.
The common denominator among these visits was the pursuit of direct engagement with Xi Jinping. Xi is no longer viewed merely as the leader of China; for many nations, he has become a preeminent figure shaping the future of the global system. The transformation of China under Xi into a more centralized, visionary state structured around long-term strategic planning has magnified the personal significance of his leadership. Today, the international community is intensely focused on Xi Jinping’s decision-making. Consequently, pilgrimages to Beijing represent an effort to establish a direct, unmediated channel to Xi himself.
Symbolism is of paramount importance here; in international politics, the optics of “who travels to meet whom” are central to the perception of power. If global leaders continuously travel to Beijing while Xi travels sparingly—yet remains the figure everyone seeks to audience with—it naturally reinforces the message: Xi Jinping is no longer just the leader of China, but a chief architect of the global system. Remarkably, Xi’s reduced international travel has not diluted China’s influence. On the contrary, Beijing’s emergence as the primary destination of diplomatic pilgrimage projects an image of profound self-assurance. To many observers, this stands as one of the most visible symbols of a shifting world order. By rendering their respects in Beijing as much as in Washington, global leaders signal that the global equation is now being formulated here.
This shift is driven by tangible geopolitical realities. The contemporary world operates within a highly interdependent framework. While intense competition defines US-China relations, their economies remain deeply intertwined, rendering total decoupling virtually impossible. Across a vast spectrum of critical arenas—including trade, semiconductor technology, artificial intelligence, energy security, the Taiwan question, the Russia-Ukraine war, the Iranian crisis, and global supply chains—China has emerged as a decisive actor. Consequently, no major power, including Washington, can formulate a viable global strategy by sidelining China.
For Europe in particular, the China question has grown increasingly complex. The period between 2022 and 2024 saw Europe adopt a more hawkish and distant posture toward Beijing. However, slowing economic growth, energy crises, and trade frictions with the United States have compelled Europe to seek a more balanced approach. The pivot of European leaders toward Beijing reveals that complete economic decoupling from China would carry prohibitive costs for Europe. This dynamic also underscores the divergent internal priorities within the US-led Western bloc.
China’s rise should not be viewed solely through the prism of its relations with the West; the sphere of influence Beijing has cultivated across the Global South is of equal significance. In recent years, Chinese influence has expanded dramatically across Africa, Latin America, Central Asia, the Gulf States, and South Asia. Within this context, Pakistani Prime Minister Shehbaz Sharif’s visit to China carries profound weight. The China-Pakistan relationship has long been characterized as an “ironclad friendship.” Through the Belt and Road Initiative, China has constructed ports, railways, energy facilities, and critical infrastructure in numerous countries, most notably Pakistan. Furthermore, unlike Western financial institutions, Beijing extends credit and investment with fewer political conditionalities. Consequently, many developing nations view China not only as a vital economic partner but also as a geopolitical counterweight to the West.
All of this inevitably raises the question: “Is China ascendant?” Based on the current landscape, the answer must be in the affirmative. For global leaders, Beijing has now emerged as a diplomatic hub as critical as Washington. Moreover, beyond its sheer economic scale, China is increasingly distinguished by its capacity for conflict resolution. Its pivotal role in facilitating the Iran-Saudi Arabia normalization, coupled with its close ties to Russia and its sweeping influence over the Global South, has significantly amplified Beijing’s diplomatic gravity.
The diplomatic traffic observed throughout 2026 highlights a fundamental truth: the world is no longer unipolar or monocivilizational. Opposite the United States stands a China capable of challenging it economically, technologically, culturally, and diplomatically. Consequently, this new era diverges sharply from the unipolar structure of the “American Century,” resembling instead a multipolar, multi-civilizational order where all actors cooperate and compete with one another simultaneously.
Xi Jinping’s position is central to this paradigm shift. For many leaders today, meeting with Xi in Beijing is not merely a matter of bilateral diplomacy, but a strategic imperative for positioning oneself within the global balance of power. This has immensely enhanced Xi’s personal prestige. Within the international system, there is a growing consensus that on most critical issues, “if Beijing is not at the table, no resolution can be complete.” The acceleration of visits to China since late 2025 is not merely a reflection of a crowded diplomatic calendar; it must be understood as a tangible indicator of a shifting world order. Beijing has transcended its status as an economic core to become one of the primary power centers of global politics. Consequently, Chinese President Xi Jinping is emerging as one of the most influential figures of this new, multipolar, and multi-civilizational world order.
Today, the diplomatic traffic directed toward Beijing is by no means limited to the United States, Russia, or the major European powers. The efforts of leaders from a vast geographical span—from Serbia and Pakistan to the Gulf States and African nations—to establish direct contact with China render Beijing’s central position in the global system increasingly conspicuous. Consequently, these recent visits are interpreted as signs that the power map of the new international order is being redrawn. For many capitals, the path to understanding global developments and formulating future strategies now runs through Beijing as much as it does through Washington. Thus, the adage “All roads lead to Beijing” is rapidly transforming from a rhetorical trope into a defining reality of contemporary international politics.
Umur Tugay Yücel – Political Scientist & Author of the book “The Decline of American Power and the Rising Powers” (China-Russia-India-Brazil).
X: @umur_tugay
Opinion
Israel’s influence over the United States and America’s strategic impasse
In remarks to the American media, Israel’s genocidal prime minister, Benjamin Netanyahu, declared: “The war with Iran is not over. The enrichment facilities must be dismantled, and the highly enriched uranium must be eliminated.” He insisted that the permanent destruction of Tehran’s nuclear capacity was imperative.
The broader picture in the Middle East is this: the United States is simultaneously attempting to make Israel more effective, more powerful, and territorially larger, while also attacking those countries that unsettle Israel or resist its regional influence. It fragments them, destabilizes them, occupies them. What occurred in Libya, Iraq, and Syria, as well as the joint American-Israeli aggression directed at Iran, must be understood from this perspective no less than from any other.
We know that Israel exercises enormous influence over the United States. The effects and reflections of that influence are visible even in Washington’s relations with Türkiye. Israel influences the United States to such an extent that America loves whom Israel loves and rejects whom Israel rejects. American presidents hesitate to take a step in the Middle East without first consulting Israel or securing its approval. For that reason, it is especially noteworthy that, in recent months, many American experts, politicians, and commentators have openly said of the attacks on Iran: “This is not America’s war; it is Israel’s war. It is wrong for the United States to place itself so completely under Israel’s direction and follow in its wake.” For the first time, Israel is being criticized this openly and this loudly within the United States itself. For the first time, America’s limitless and unconditional support for Israel is being questioned so directly.
The extent of Israel’s hostility toward Türkiye
Israel’s influence over the United States, as seen in the joint American-Israeli aggression against Iran, also became apparent during the ceasefire negotiations. Israel did everything in its power to prevent the United States from accepting a ceasefire. Although Pakistan succeeded in persuading both Washington and Tehran to accept a regional ceasefire, Israel immediately pressured the United States and ensured that Lebanon was excluded from the scope of the agreement.
Israel’s hostile posture toward Türkiye is likewise striking. By supporting terrorist organizations operating against Türkiye, Israel seeks to force the country to exhaust its energy and resources in prolonged struggles against armed groups both domestically and along its immediate periphery. In this regard, the most functional and useful instrument at Israel’s disposal is the PKK terrorist organization. The United States also supports the PKK. Accordingly, the American-Israeli axis jointly backs structures affiliated with the PKK, namely the PYD-YPG in Syria and PJAK in Iran. It will be recalled that Israel also supported the 2017 independence referendum organized in northern Iraq under the leadership of the Barzani administration. Israel announced that, should the referendum produce a declaration of independence, it would be among the first states to recognize an independent Kurdish state separating from Iraq.
The American economy Is not on a healthy trajectory
From an economic standpoint as well, the United States is compelled to wage wars, launch attacks, create new customers for its arms industry, and secure fresh military contracts. The American economy has become dependent on war. Within the country’s dominant sectors, the military-industrial structure occupies a singularly privileged and strategic position. U.S. public debt has surpassed 39 trillion dollars. Private-sector debt, including household debt, has reached 42 trillion dollars. The budget deficit approached 1.8 trillion dollars in 2025. Last year, the trade deficit climbed to 901.5 billion dollars. At the same time, the country’s productive capacity and competitive strength continue to erode.
By attacking Iran alongside Israel, the United States sought not only to neutralize Iran’s missile capacity and nuclear capabilities, but also to alter the regime in Tehran and, if possible, even redraw the country’s borders. It inflicted severe damage on Iran and struck heavy blows, yet failed to force capitulation. It achieved neither its military objectives nor its political aims.
Another American calculation was this: by striking Iran, which sells 90 percent of its oil exports to China, Washington hoped to open a serious breach in China’s energy supply chain. China obtains nearly half of the oil it consumes from Gulf countries such as Iran, Iraq, Saudi Arabia, and the United Arab Emirates. Altogether, 45 percent of the oil China uses passes through the Strait of Hormuz. It should also be noted that the Strait of Hormuz is critically important not only for China, but also for Asia’s major economies such as Japan, India, and South Korea. One must not forget that all three maintain close relations with the United States.
While attacking Iran, the United States also sought to weaken China — and failed
While calculating that Iran would emerge weakened, the United States also intended to batter China in the process. It failed. That failure rendered Washington even more aggressive and drove it into deeper panic. For regardless of what the United States does, the trajectory of history continues to favor China.
Consider the figures. In 1990, China accounted for just 1.8 percent of the global economy. Today, that figure stands at 18.5 percent. In other words, over the past thirty-six years, China’s share of the world economy has increased tenfold. The United States, by contrast, accounted for 34 percent of the global economy in 1985; by 1990, its share had already fallen to 26 percent. Today it has declined further, to 22 percent. As can clearly be seen, America’s share has been steadily diminishing. Across the Atlantic, Europe’s decline has been even more pronounced. In 1990, the European Union accounted for more than 27 percent of the global economy. Today its share has fallen to 17 percent. In other words, over the past thirty-six years, the European Union has contracted by ten percentage points.
This decline in Europe inevitably weakens the European Union’s appeal while simultaneously intensifying internal disputes within the bloc. It has also emboldened those advocating withdrawal from the Union. Following Britain’s departure from the European Union through the 2016 Brexit referendum, similar debates have proliferated across Europe. Those advocating France’s withdrawal speak of “Frexit,” while proponents of Sweden’s departure invoke the term “Swexit.”
These debates are not confined to the European Union alone. Parallel discussions are also emerging within NATO, particularly as President Trump publicly humiliates NATO members and even suggests that the United States itself could leave the alliance. Slovenia, for example, one of NATO’s smaller members, is debating the possibility of putting withdrawal from the alliance to a referendum. For a small-scale country, this is undoubtedly a bold and highly consequential discussion.
What ultimately becomes visible is this: as the United States weakens, the fractures within the Atlantic alliance deepen, and disputes within major Western institutions such as NATO and the European Union grow increasingly severe. The joint American-Israeli attacks against Iran, together with Iran’s resistance, are making those fractures even more visible.
Opinion
From Great Power Competition to Strategic Stability: A New Orientation of China-US Relations
U.S. President Donald Trump paid a state visit to China from May 13 to 15, 2026. For the current turbulent international order, this summit between the two great powers of China and the United States is of extraordinary significance, bringing a degree of certainty to an uncertain world.
A major focus of domestic and international attention is that during his visit to China, Trump appeared far more rational, restrained and pragmatic than he did in Europe. In Europe, he often treated allies with emotional outbursts, unilateral pressure and even public mockery; in Beijing, by contrast, he moderated his tone, chose his words carefully, stressed respect for China and a willingness to cooperate, demonstrating a greater sense of realpolitik and diplomatic propriety.
During his tour at Zhongnanhai, he even remarked that if he gets used to this place, he might not want to leave. He also expressed hope of visiting China again in six months. All this points to productive communications between the two sides. The most important outcome was their agreement to build a constructive China-U.S. relationship of strategic stability. This is clearly a major new development and transformation in China-U.S. relations, which will undoubtedly send strong reverberations, profoundly shaping not only the societies of both nations but also the global strategic landscape and the existing structure of international relations.
What Is the “China-US Constructive Relationship of Strategic Stability”?
Although no joint communiqué was issued nor press conference held following President Trump’s visit to China, the Chinese side nonetheless spoke highly of the trip, describing it as a “historic meeting”. The reason lies in the two sides’ agreement to build a constructive China-U.S. relationship of strategic stability.
Strategic stability originally refers to a state among nuclear-armed powers where mutual deterrence prevents nuclear war. The concept emerged from U.S.-Soviet arms control during the Cold War and now also describes peaceful relations between major powers. In the current China-U.S. context, “strategic stability” is understood broadly to mean that the two countries can maintain a stable framework in their most crucial interactions.
How should we understand the new positioning of a “constructive relationship of strategic stability”? During the meeting on May 14, President Xi Jinping put forward the “four should-bes” to define this new framework: It should be positive stability with cooperation as the mainstay, healthy stability with competition kept within bounds, normal stability with differences under control, and durable stability with peace in prospect. Each dimension of “stability” leaves considerable room for interpretation.
The first dimension: cooperation as the mainstay. Over the past decade, both the Trump administration’s launch of two trade wars and the Biden administration’s building of a “small yard with high fences” and imposing high-tech export controls on China have created massive disruptions to the normal operations of enterprises in both countries and to bilateral trade. As the world’s two largest economies, frequent frictions caused by U.S. policies are clearly abnormal and detrimental to the economic development of both nations and the world. It is therefore essential to return to a tone centered on cooperation.
The second dimension is well-regulated competition. The United States is prone to the Thucydides Trap mindset and harbors deep misgivings about China’s rise and development. Nevertheless, China has no intention of engaging in zero-sum games where one side wins and the other loses. From Chinese perspective, competition between nations is inevitable. Yet the world today faces the fundamental task of expanding common interests rather than dividing existing gains. We embrace sound competition and reject vicious rivalry; otherwise, the world risks repeating the tragedies of World War I, World War II and even the Cold War.
The third dimension is manageable differences. Disagreements are inevitable in China-U.S. interactions. However, if economic, trade, technological, cultural and academic exchanges are all politicized and securitized, even ordinary bilateral issues will escalate into strategic confrontations. A mature major-country relationship does not mean the absence of disputes, but the ability to keep dialogue intact even after disagreements arise.
The fourth dimension is foreseeable peace. It targets the most fundamental and bottom-line principle in China-U.S. relations: the two countries must avoid war. Today’s China-U.S. relationship is no longer a simple bilateral tie between two isolated nations, but two core pillars embedded in the global industrial chain, financial system, technological system and security architecture. Therefore, foreseeable peace requires strategic self-awareness from both sides: competition must not escalate into conflict, and confrontation must never lead to war. Neither side shall gamble the future of 1.4 billion Chinese people, over 300 million Americans and the entire world on an unaffordable conflict for short-term political gains.
These signals released from this summit indicate that both sides are striving to shift their relations from confrontation to a new phase featuring controllable competition and pragmatic cooperation.
The Constructive Significance of the New Positioning of China-U.S. Relations
These “four should-bes” are not a one-sided expectation that China places on the United States, but rather a mutual commitment between the two countries. The definition put forward by the Chinese leader has received high recognition from the U.S. side. Therefore, there is good reason to believe that this new framework will serve as the strategic guideline for China-U.S. relations over the next three years, which will cover Trump’s second term, because it benefits both nations.
For China, what matters more are the strategic gains from this meeting: namely, persuading the United States to embrace a framework of constructive strategic stability. China’s paramount strategic goal is to achieve the great rejuvenation of the Chinese nation, which demands a stable external environment. Yet since Trump’s first term, China has faced containment by the United States and its allies across trade, technology, finance, and geopolitics, posing severe challenges to its development. China has long sought to transcend the Thucydides Trap. While it does not shy away from competition and stands ready to uphold its interests in economic and trade frictions with the U.S., it has no desire for strategic rivalry. Instead, China aims to steer bilateral relations back to a path of rationality, communication, and non-confrontation, so as to secure a stable external environment for economic growth.
For the United States, it places greater emphasis on the pragmatic benefits of this visit. The U.S. signaled its intention to visit China as early as last year, aiming to leverage its perceived victories over Venezuela and Iran to pressure China. However, the war in Iran has yet to end, and it has produced significant blowback against the U.S., exposing few critical realities to the world:
First, the U.S. cannot defeat Iran, and a power unable to subdue Iran has no credible path to conquering China.
Second, although China is the world’s largest energy importer, it faces no imminent risk of energy shortages.
Third, surging domestic inflation and oil prices in the U.S. have stoked public discontent, undermining Trump’s prospects in the midterm elections.
Fourth, the U.S. failed to defeat China in the trade war, instead hitting a wall. In February, the U.S. Supreme Court ruled that the massive tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) were illegal.
Fifth, a series of events like the maiden flight of China’s sixth-generation fighter jet, the May 7th India-Pakistan air battle, the September 3 military parade, and the U.S.-Israel-Iran conflict have convinced the U.S. that military coercion is unlikely to bend China to its will.
From the U.S. perspective, a reality-based assessment compels recognition of China’s international standing. Moreover, China’s neutral stance in multiple global crises has led the U.S. to view it as a rational, predictable, and negotiable strategic rival rather than an entirely uncontrollable challenger.
For the world at large, the realization of strategic stability in China-U.S. relations also contributes to global peace and stability. In this era of major-power games, world development and security are confronted with numerous challenges: rising global unrest and armed conflicts, sluggish economic growth mounting pressures on people’s livelihoods, stagnant technological progress and retrogressive international cooperation, a fractured international order and unbalanced rule-based systems, deteriorating diplomatic atmospheres and setbacks to peaceful diplomacy, ineffective governance over global issues, and small and medium-sized countries being reduced to pawns in great-power contests. The gravest crisis facing the world today lies not in troubles plaguing individual nations, but in the prevalent global state of instability, uncertainty and unpredictability. As the world’s two largest economies, China and the United States bear the responsibility to deliver stable expectations for the whole world.
The Future of China-U.S. Relations
In the short term, the proposal of a constructive strategic stability relationship between China and the United States means there will still be opportunities for positive interactions over the next six months. President Xi Jinping has agreed to pay a visit to U.S. in September 2026, and there is a high probability that the two leaders will meet again at the APEC Summit in Shenzhen and the G20 Summit in the United States again. In other words, the two countries will continue to maintain engagement, intensify cooperation on the basis of managing differences, and foster a favorable atmosphere for multiple rounds of head-of-state diplomacy in the period ahead.
Nevertheless, the “constructive strategic stability relationship between China and the United States” still faces an even bigger test that will determine its true substance. The Taiwan issue is the most sensitive and core issue in China-U.S. relations, representing China’s vital core national interest. This is a bottom line and red line that cannot be traded or trampled on.
On board Air Force One returning to the U.S. after his China visit, Trump laid out his latest “Four Don’ts” on Taiwan: Don’t want anyone to pursue independence; Don’t want to send troops thousands of miles to fight a war; Don’t become a backer for “Taiwan independence”; Don’t easily commit to arms sales to Taiwan.
This statement does not represent a shift from strategic ambiguity to strategic clarity. While the first three “Don’ts” can be seen as a form of strategic reassurance to China, the deliberate ambiguity on arms sales preserves the core tool of “using Taiwan issue to contain China”. In short, Trump has not abandoned the “Taiwan card” during this visit, and he still seeks to use it as a tool to constrain China. Accordingly, whether Trump approves a US$14 billion arms sale to Taiwan, which is the largest single arms deal in U.S. history, will not only test U.S. political commitments but also directly determine whether major conflict between China and the U.S. could break out in the future.
Though this visit facilitates the realization of strategic stability between China and the United States, the structural contradictions between the two sides in ideology, development models, technological competition and geopolitical strategies remain unresolved. In line with the logic of strategic defense, strategic stalemate and strategic counteroffensive, China-U.S. relations have entered the phase of strategic stalemate. Yet how long this phase will last remains uncertain. It is likely to be extremely protracted, spanning two to three decades or even longer until the two countries attain balanced strength across all fields.
China harbors no intention of challenging America’s dominant status, while the U.S. can hardly abandon its attempt to contain China. Hence, during this strategic stalemate, bilateral relations may witness intermittent frictions and truces, with neither side able to subdue the other. Both sides have to cooperate amid competition, which will become the new normal of bilateral ties.
In any case, the vision of a constructive strategic stability relationship is a bitter yet effective remedy proposed by China for China-U.S. relations and global peace. It does not cure minor ailments, but targets the entrenched fatal malady of hegemonic anxiety. This prescription requires joint adherence by both sides. China has demonstrated utmost sincerity and steadfast resolve. Now the ball is in America’s court, especially in the hands of decision-makers in Washington. Will it lay aside arrogance and embrace an equal, stable and sustainable new framework of bilateral relations, or remain trapped in the illusion of acting from a position of strength and rush headlong down the path of confrontation? It is hoped that this Beijing summit will mark a fresh starting point for bilateral ties. If both sides fully implement the constructive strategic stability relationship, reduce emotional decisions and excessive securitization tendencies, and step up pragmatic communication and tangible cooperation, it will prove a blessing for China, the United States and the entire world.
*Dr. Yang Chen
Associate Professor and Executive Director, Center for Turkish Studies, Institute of Global Studies, Shanghai University
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