China is winning

It'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 is trying to figure out if it's going to get Maduroed. And now Trump's threatening to bomb Iran, where massive protests have the regime teetering on the brink. The leaders of Iran call they want to negotiate. 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. Maybe you gifted a Lubbubu last year. I don't think Lubu's 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.

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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. And 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. I 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, okay, 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 was, I actually was in China when the tariffs dropped for Liberation Day. And it 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. These 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% tariffs 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. you are, then you're certainly not alone.

And 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 threat 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. And 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 Bessent 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 percent. 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. So I was really consequential to our long-term. competition with China, right? Basically 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.

One 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 Sturman Drong 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. Wow. 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. Like 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, right, but that there is mutual benefit in these economic engagements. And so we need to find ways to figure those out and resolve them. You 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, a couple of years longer? Yeah, I think that's right. And I think, you know, just as a starting point, too, you know, I noted that dealmaking 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 she's political persona. But he's a very tough negotiator. That's not good. Right, he's not really interested in making a deal. He is kind of playing the longer game, right, in 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, from a U.S. perspective, is that they have, in fact, accrued 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 exercise. it to tremendous effect, I think better than they had expected, but that their position is actually improving this year.

They 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 realize one year from now is going to be the midterm election and Trump's not going to want to have this fall apart. They're just like us, you know, 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? John Zinn, China analyst at Brookings. Coming up, China's soft power is on the rise to. Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow none of them talk to each other. That's where Odo comes in, an all-in-one business management software that brings every part of your business together. From sales and accounting to inventory and marketing, all in one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no spreadsheets. Stop managing software and start managing your business with one unified system. Try for free today at odu.com slash vox. That's odio.o.com slash vox.

So good, so good. New summer arrivals are at Nordstrom rack stores now. Get ready to save big with up to 60% off brands like Rag and Bone, Levi's, Adidas, and free people. Join the Nordi Club to unlock exclusive discounts, shop new arrivals first, and more. Plus, buy online and pick up at your favorite rack store for free. Great brands, great prices. That's why you rack. The FIFA World Cup is here and you can now feel the thrill of the pitch in FIFA World Cup launch edition on Netflix, a fast and fluid football game where your phone is the controller and the TV is the stadium. Play for your country in 16 different stadiums with up to four friends, all included in your membership. Scroll to the games tab on your TV and play FIFA World Cup launch edition now only on Netflix. You're listening to Today Exhib. You're listening to Today Explained. I'm Don Weinland. 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's 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. You 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 Laboubu before or Pop Mart? I have heard of Labuboos. I have the one and only 24-carat gold, Labubu. 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. But 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 Luboo. I don't have any Lububu's. To be honest, I'm not super Lubu 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 Lubu guy? I'm not really a Labubu guy, per se, but I am very interested in Palpal Matta or Potmart, the company that makes Labubo's. So, yeah, we can start with Labubu. It 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. Kinie, you guys, girls with Labibos. 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 Labibu you're going to get. 24-carat 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. And you know, you might get like a rare card or something like that, right? I finally got my hands on a Laboooo Boo Boo. My first laliboo. No. Labeloo. No. She got the secret! I told you so. No. So what else? You mentioned movies? Yeah, Nudjah 2 really blew up at the beginning of 2025. It's an animated film. It tells a traditional Chinese myth story. You face Naja, 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. The animation in Nijah, too. 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 Nha, too, which is very odd, you know, to hear them referencing this animated film. And, you know, they're really, they were pointing to what they see as a, 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 a black myth Wukong.

I don't get a chance to play video games much anymore, but I used to. 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, you know, in areas like tourism. So 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 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. There were 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. So 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. You know, 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. And that just means that, you know, 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. So 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... 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. 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? Well, basically, he was kind of state canceled. And I think the companies that host these videos were required to basically erase him. So there's a lot of companies that just don't want to take risks on culture because, you know, pop artists can get scrubbed from videos or dramas can get... outright cancelled if one of the actors does something bad in real life. What's your bet on the next big Chinese cultural export? I think we're getting a Lubbubu 2.0 in 2026? I don't think Labubu's going away anytime soon. Labu. Pop Mart is going to keep cranking out these strange, ugly cute dolls. But I would say one area that... American consumers might see in 2026 is they might see more Chinese products, well-made products popping up in America. There are a lot of Chinese tea brands, like bubble tea chains that are setting up in America right now. You know, we've been talking about entertainment, but products have a big impact on soft power as well, right? So if you start buying... well-made Chinese products. It could change your mind about China. It does seem like China's making progress on entertainment and cultural products that are more geared towards children. So Nudgeatu is an animated film. Adults love it, but, you know, it's definitely something that kids can watch. Labubu is also not just for kids, but it's, you know, Kids seem to be buying a lot of these. I think that's kind of a safe space for Chinese cultural exports. You know, you don't need things like violence and sex and, you know, the kind of the raunchier bits of entertainment in this space, obviously. And yeah, that might make it easier for more of these types of kind of youth-focused things to reach people outside of China.

Don Wyland, Economist magazine, not a Lubbubu guy. Our show today was produced by Ariana Espuru, edited by Jolie Myers, engineered by David Tadishore and Patrick Boyd, and fact-checked by Andrea Lopez Crusado. I'm Miles Bryan. It's today Explained. Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow none of them talk to each other. That's where Odo comes in, an all-in-one business management software that brings every part of your business together. From sales and accounting to inventory and marketing, all in one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no spreadsheets. Stop managing software and start managing your business with one unified system. Try for free today at odu.com slash vox. That's odio.o.com slash vox. That refresh you've been putting off until the right deal came along? It's here. Wayfair's Black Friday and July sale is happening now so you can finally get the style you've been waiting for for less. Get up to 80% off area rugs and up to 60% off outdoor and bedroom furniture. Shop Wayfair's huge selection of styles and find the piece to fit your style, budget, and space. Plus, free shipping. Black Friday and July ends July 27th. Shop today at Wayfair.com. Every style, every home.