China’s Surging Economy Is a Major Problem for the U.S.

The U.S. economy is the hottest ticket on earth, but China’s economic fortunes are rising too. 

We’ve often heard that China is facing long-term economic decline thanks to its real estate bubble and weak consumer spending. Yet the Chinese economy continues to power forward.

This has serious implications for the United States. China isn’t just our national security adversary but our single biggest economic rival. As the Chinese economy heats up, America needs to make sure it’s ready for global competition in the twenty-first century.

Last week, news broke that China’s economy grew faster than expected in the first three months of 2026 and will see a growth rate of 5.3% this year, compared to 2.2% for the U.S.

One reason for this is good, old-fashioned, face-saving Keynesianism. China has spent big on its infrastructure, building up its electrical grid and road network, which has helped paper over problem spots like weak consumer demand.

This dovetails into a real advantage, which is that China’s economy is more electrified than America’s. China’s roads teem with electric vehicles while its companies lead the world in EV and battery sales. This comes with its own set of drawbacks—placing strain on the Chinese power grid, for example—but it’s made China less susceptible to the oil shocks caused by the Iran war.

It’s also provided a major opening for the Chinese industry. Take China’s electric vehicle giant BYD, which this year overtook Tesla as the largest EV seller on earth. BYD’s growth had been slowing, yet it rebounded in March as gas prices surged, and so did interest in electric vehicles.

Or take the Chinese conglomerate Ganfeng, the world’s largest producer of lithium metal, a major ingredient in the batteries used in EVs. Ganfeng has likewise seen stronger-than-expected profit forecasts thanks to growing interest in electric cars.

How is all this growth possible given that Chinese consumers are scaling back their purchases? The answer is that Chinese companies are turning to wealthier consumers abroad—including here in the United States.

China’s exports leaped by nearly 22% in the first two months of 2026 versus the same period in 2025. And while those exports have since slowed thanks to the Trump administration’s tariffs and the Iran war, exports of EVs and computer chips in particular have stayed strong.

What this shows is that the outlook of Chinese business is becoming more global. As Chinese companies like BYD surpass their American counterparts, as bigger-spending foreign customers look more attractive, Beijing is elbowing even farther into a global economy once dominated by the United States. 

This is, of course, the same China that’s doing everything it can to undermine the U.S. Recently, it was reported that Beijing is considering restricting exports of solar panel equipment to the United States. This is solely to hurt American solar panel manufacturers like Tesla.

Washington needs to prepare for a global economy that’s under greater influence by Chinese mega-conglomerates backed by a hostile Chinese state. It needs to accept that tariffs alone won’t restrict China’s growth and work to further tilt the scales against Chinese companies.

Take Huawei, another enormous conglomerate and the global leader in 5G and telecom equipment.

Huawei’s rise didn’t happen by accident. It was backed, financed, and protected by the Chinese state as part of a deliberate strategy to dominate global networks. The United States, by contrast, has often relied on smaller, competing firms to carry that burden alone.

Yet Huawei continues to dominate the Chinese tech market and has lately been moving into Europe, frustrating Washington, which is very aware that it engages in espionage and intellectual property theft.

That reality is already beginning to shape U.S. policy. 

Earlier this year, Donald Trump approved a merger between U.S. tech companies Hewlett Packard Enterprise and Juniper Networks that the Biden administration had previously red-flagged. Why? The new, larger company will be a powerhouse in 5G with the scale and know-how necessary to take on Huawei.

This is the kind of thinking America needs — not just in telecom, but across the industries where scale, infrastructure, and technological leadership will determine who sets the terms of global competition. That includes cars, batteries, solar panels, and other twenty-first-century goods. Our economy is still the most robust in the world, but we can no longer take our dominance for granted.

China’s economic surge has plenty of asterisks attached, but Washington should take it as a warning: no more resting on our laurels. It’s time to unleash American dynamism and compete with our most committed geopolitical adversary.

Editor’s Note: Thanks to President Trump’s leadership and bold policies, America’s economy is back on track.

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