MUKHTAR AHMED BUTT
China’s rise as a global economic power represents one of the most profound shifts in international relations since the end of the Cold War. While the United States continues to pursue an aggressive model of trade diplomacy often intertwined with military presence, China has relied primarily on economic instruments trade, investment, infrastructure, and development partnerships to expand its global influence. This shows China’s supremacy in global markets, its strategy of economic diplomacy, and its comparative standing in terms of GDP and influence relative to the United States, its Western allies, and major Muslim-majority countries. In the 21st century, power projection has increasingly moved from military might to economic influence. China’s ability to transform itself from a closed agrarian economy to the manufacturing hub of the world stands as an extraordinary historical phenomenon. Its success lies not merely in producing the world’s cheapest goods, but in integrating economic strategy with diplomacy creating networks of dependency and goodwill across Asia, Africa, Europe, and the Middle East. Contrary to the U.S. approach, which has often been perceived as militarized diplomacy, China’s rise has been marked by what Joseph Nye might call “soft power through economic pragmatism.” By providing affordable consumer goods, investing in infrastructure through the Belt and Road Initiative (BRI), and avoiding direct military confrontation, China has arguably achieved what other empires pursued by force global reach and influence. China’s modern economic history began with Deng Xiaoping’s “Reform and Opening Up” policy in 1978. In four decades, it transformed from a low-income, centrally planned economy into the world’s second-largest economy by nominal GDP and the largest by purchasing power parity (PPP). According to Nominal GDP (2025 estimates): China: US$19.2 trillion. United States: US$30.5 trillion. Japan: US$4.3 trillion. Germany: US$4.6 trillion. India: US$4.2 trillion (Source: IMF & Statistics times, 2025 projections). China has already surpassed the U.S. as the world’s largest economy, accounting for nearly 19% of global output, compared to 15% for the U.S. China’s industrial base dominates global supply chains. It accounts for over 28% of global manufacturing output, produces around 50% of the world’s steel, 70% of solar panels, and a vast majority of consumer electronics. The result is a near-ubiquitous presence of “Made in China” goods, from smartphones to textiles, in markets across continents.
At the heart of China’s global strategy is the Belt and Road Initiative (BRI), launched in 2013. As of 2025, over 140 countries representing around 65% of the global population and 40% of global GDP have signed cooperation agreements under the BRI framework. Through BRI, China invests in ports, railways, power plants, and digital infrastructure, particularly in Asia, Africa, and parts of Europe and Latin America. This infrastructure diplomacy not only strengthens China’s trade routes but also deepens its political and economic partnerships. For developing nations, including many in the Muslim world, Chinese financing presents a compelling alternative to Western institutions like the IMF or World Bank, which often impose strict governance and policy conditions. The appeal of “no-strings-attached” investment has helped Beijing cultivate influence in Pakistan, Indonesia, Saudi Arabia, Egypt, and beyond. While the U.S. retains dominance in services, innovation, and finance, China’s edge lies in production capacity, cost competitiveness, and infrastructure diplomacy. Western trade diplomacy often characterized by sanctions, trade restrictions, and geopolitical pressure—contrasts sharply with China’s focus on partnership, commerce, and industrial cooperation. Moreover, China’s “peaceful rise” narrative appeals strongly to the Global South. Its claim of “win-win cooperation” contrasts with U.S. interventions in Iraq, Afghanistan, and elsewhere, which have left deep scars, especially in the Muslim world. Economically, China’s approach has allowed it to build goodwill “without firing a shot. “The Muslim world is a critical dimension of China’s global strategy. Trade between China and the Organization of Islamic Cooperation (OIC) countries exceeded US$600 billion in 2024, making China the largest trading partner for many Muslim-majority nations. Saudi Arabia: China is its top oil customer and a major investor in petrochemical and green energy projects. The China–Pakistan Economic Corridor (CPEC), valued at over US$60 billion, is a flagship BRI project linking western China to the Arabian Sea. Egypt & UAE are the major logistics and industrial partnerships under the BRI.China’s trade with the Gulf Cooperation Council (GCC) is expected to surpass US$350 billion by 2025, outpacing U.S. trade with the region. Importantly, China has achieved this economic dominance through commerce rather than coercion. China’s global appeal lies not only in investment but also in the affordability of its exports. Chinese goods from smartphones and textiles to medical equipment and renewable-energy components are accessible to low and
middle-income consumers worldwide.
This affordability serves as a form of soft power. By improving the material standard of living in developing economies, China fosters a positive perception of its global role. In Muslim and developing nations, where cost sensitivity is high, Chinese products have become synonymous with accessibility and progress. This subtle cultural diplomacy reinforces China’s image as a benevolent economic partner. The U.S. model of trade diplomacy remains rooted in conditional partnerships and strategic alignments. Washington’s sanctions regimes, trade disputes, and political litmus tests often alienate partners who seek autonomy.
The U.S.China trade war (2018–2020) highlighted Washington’s unease with Beijing’s rise. Yet, rather than curbing China’s power, tariffs accelerated the diversification of Chinese exports into emerging markets. In the long term, such trade wars may isolate the U.S. from the fastest-growing regions of the world economy. From an ethical standpoint, American foreign policy marked by interventions in Iraq, Afghanistan, and Libya—has eroded its moral legitimacy, particularly in the Muslim world. In contrast, China’s pragmatic non-interference policy appeals to states weary of Western hegemony. Nevertheless, China’s resilience and adaptability demonstrated through industrial upgrading, green technology investment, and regional partnerships suggest it will remain a central pillar of the world economy for decades. China’s emergence as the world champion of economic diplomacy symbolizes a profound shift in global power structures. Through manufacturing dominance, infrastructural investment, and non-coercive diplomacy, China has managed to “win hearts without firing a shot.” Its economic outreach has been particularly successful among developing and Muslim-majority nations, where it offers tangible benefits without political interference. The United States and its allies, while still technologically and financially dominant, face diminishing influence in regions where economic cooperation outweighs ideological alignment. China’s success underscores a new paradigm: in the 21st century, the ability to provide prosperity, not the capacity to wage war, defines true global leadership. If the coming decades continue along current trajectories, the competition between Washington’s trade diplomacy and Beijing’s economic statecraft may determine not only the next world order but also the moral center of global governance.
