The Great Reckoning: How Western Self-Delusion Fuels China’s Ascent

A Call for Strategic Action to Delay and Defend

The West finds itself at a precipice, facing not just a geopolitical competitor in China, but an insidious internal crisis of confidence and identity. For decades, Western foreign policy and economic dogma rested on the unchallenged assumption that liberal democracy and the principles of the Washington Consensus were the singular, inevitable path to modernity and global leadership. This belief system, once a source of strength, has calcified into a dangerous form of cognitive dissonance. While Beijing showcases breathtaking achievements in poverty reduction, infrastructural development, and green energy, the West clings to the hope of China’s "imminent collapse"—a psychological comfort mechanism that paralyzes necessary strategic action.

The core threat to the West is its unwillingness to accept a world where modernization is not synonymous with Westernization. This self-delusion has led to a costly reliance on the very markets that fuel China's rise, most notably exemplified by the corporate inertia of European giants. To safeguard its future, the West must abandon this passive denial. The strategy must be two-fold: an urgent, unified economic effort to delay China's expansion in the short term, while simultaneously committing to a protracted, multi-year campaign to rebuild its own critical supply chains. The time for intellectual reckoning is over; the time for decisive, painful action is now.

The West’s survival depends on a shift from intellectual arrogance to sober realism. We must stop waiting for the Chinese system to fail and instead confront the success that is before us. The corporate pursuit of short-term profits must be overridden by the imperative of long-term strategic security. By collectively and decisively reducing economic purchases from Beijing, the West can buy the years needed to rebuild its industrial foundations. The choice is clear: between prudent adaptation to a changed world or stubborn denial that risks irreversible decline. The great reckoning demands nothing less than a full commitment to self-reconstruction.

by Gabriele and Nicola Iuvinale

The Cognitive Crisis: Modernity Redefined

The fundamental challenge stems from China’s success in establishing a non-Western model of effective governance. As scholars have noted, Beijing has achieved "performance legitimacy"—the ability to justify its political system through monumental, tangible results: lifting 800 million people out of extreme poverty, building continental-scale infrastructure, and dominating the global rollout of renewable energy capacity.

This effective, state-led development model has invalidated the long-held Western belief that a dynamic market economy must be inherently tethered to political freedom. The failure of the "China Collapse Theory" has fostered a defensive anxiety in the West, manifest in:

• Political Fragmentation: An inability to enact large-scale domestic projects or maintain political consensus (as lamented by German Chancellor Merz, citing a "deep fracture across the Atlantic").

• Corporate Inertia: A continued rush for immediate profits over strategic long-term risk reduction.

The Transatlantic Dilemma: Funding the Rival

The greatest symbol of this strategic failure is the behavior of the major Western economies, particularly the US and Europe. Despite clear warnings from political leaders about an evolving world order and the formation of new "alliances of autocracies," corporate giants continue to ignore de-risking mandates.

• European Inertia: European companies (automakers, chemical firms) are drastically increasing investments in China, driven by the vast market's allure. German investment, for instance, reached €5.7 billion between 2023 and 2024.

• US Dependence: Even the United States, despite adopting tough rhetoric and enacting industrial policies like the IRA and the Chip Act, maintains a volume of imports from China that is crucial for Beijing’s economic stability. This constant demand for low-cost goods undermines the effectiveness of strategic containment measures.

This persistent dependence means the West, as a whole, is funding the rival's technological and military modernization with its own capital. The corporate pursuit of short-term gain over strategic security makes the transatlantic axis an unwilling, yet essential, enabler of China’s power. To break this cycle, both Europe and the United States must act in concert to drastically reduce import volumes, demonstrating to Beijing that access to Western markets is no longer an acquired right.

China's Achilles' Heel: The Economic Lifeline

Despite its demonstrated resilience, China possesses a critical vulnerability that the West can—and must—exploit: an ongoing reliance on external markets and technology.

Peking's grand strategic plan, the "Dual Circulation" strategy, aims to achieve self-sufficiency by shifting growth toward internal consumption and diversifying exports to "friendly nations." However, this plan is delayed:

• Sluggish Internal Consumption: Domestic consumer confidence remains tepid, failing to generate the necessary demand to fully offset reliance on exports.

• Insufficient Alternative Markets: Exports to the Global South, while increasing, cannot yet compensate for the vast economic volume and value provided by the US and European markets.

This shortfall means the goal of strategic economic independence from the West is receding. This is the moment for coordinated Western action.

 

The Military Expansion and Economic Fuel

China’s economic growth over the last three decades has been directly paralleled by a massive and sustained military build-up. Beijing has continuously channeled its immense export revenues—largely derived from Western demand—into developing advanced capabilities, including naval power projection, sophisticated missile systems, and cutting-edge military technologies. This continuous flow of capital has allowed the People’s Liberation Army (PLA) to transform into a global force. Crucially, any reduction in Beijing's economic power will consequently produce the effect of constraining its warfighting potential. By cutting the financial lifeline provided by Western consumers, the West directly impacts the budget and capacity for military expansion, gaining vital time and leverage.

Strategy for Salvation: Delay and Rebuild

The Western strategy must be two-pronged, acknowledging the critical element of time.

1. Delay the Ascent: Economic Containment

Given the years required for Western supply chains to mature, the immediate priority must be to retard China's economic and technological expansion by targeting its reliance on Western demand.

• Weaponizing Purchasing Power: The West must immediately transition from de-risking rhetoric to direct action by using its collective purchasing power as a geopolitical tool.

• Actionable Goal: A unified effort to selectively reduce purchases from Beijing will decrease the revenue stream China uses to fund its strategic objectives. This action exposes the flaw in the Dual Circulation model.

• Mechanism: This must be enforced through robust incentives for companies to pursue genuine reshoring or friendshoring of manufacturing, ensuring a shift in capital away from China and toward allied nations.

2. The Long Game: Rebuilding Critical Supply Chains

Simultaneously, the West must accelerate the arduous and expensive process of securing its material independence.

• The Time Reality: Reopening long-shuttered mines, securing permits, and building the necessary refining and processing capacity for critical minerals (such as lithium, cobalt, and rare earths) will take many years. The lead time for a new mine can be over a decade.

• Strategic Investment: Sustained, multi-administration commitment is required for the Chip and Science Act and the Inflation Reduction Act to successfully build sovereign capacity in semiconductors and green technology.

• Focus on the Core:  Investment must target not only extraction but the sophisticated technology for refining and separating these minerals—the know-how China currently dominates. Furthermore, maximizing recycling from electronic waste is an essential short-to-medium-term measure.

Conclusion

The West’s survival depends on a shift from intellectual arrogance to sober realism. We must stop waiting for the Chinese system to fail and instead confront the success that is before us. The corporate pursuit of short-term profits must be overridden by the imperative of long-term strategic security. By collectively and decisively reducing economic purchases from Beijing, the West can buy the years needed to rebuild its industrial foundations. The choice is clear: between prudent adaptation to a changed world or stubborn denial that risks irreversible decline. The great reckoning demands nothing less than a full commitment to self-reconstruction.