2025 is a watershed year

A year when decades happened

For decades, the world ran on a deeply internalised assumption: the United States is ultimately in control of the world order, of history’s direction, and of the dollar.

In 2025, that assumption finally collapsed. Trump’s handling of the trade war and Ukraine didn’t just spook allies. It forced a long-delayed thought into the open: what if the system’s guarantor is no longer reliable or predictable?

People didn’t say it out loud. They just bought metal.

Gold, silver, platinum, and copper rallied from one all-time high to another, and with no end in sight. It was a clear vote of no confidence on an epic historic scale.

This is one strange thing about 2025: events of genuinely historic magnitude kept happening — and then immediately disappeared. Social-media cycles were so compressed, turbo-charged by the proliferation of AI-generated content, that our minds barely had time to register before attention moved on to the next short video.

The United States bombed Iran’s nuclear facilities. Say that sentence slowly. A few years ago, this would have been considered an extinction-level escalation scenario in many risk models. In 2025, it happened — and then it passed. It was an enormous gamble, and Trump, to his credit, won this gamble spectacularly. Iran backed down. Oil did not spike above $120 a barrel. But what exactly did he win? Peace? Or proof that peace now depends on preemptive bombing followed by social-media amnesia?

Then there was the India-Pakistan conflict, with two nuclear powers, engaging in what may have been the largest aerial dogfights since World War II. Another event that should have permanently reshaped perceptions, yet barely stayed in the global consciousness for more than a week.

The assassination of Charlie Kirk was another moment that should have lingered longer than it did. Many people saw him as one of the last public figures who genuinely believed talking to the other side was not a form of treason. He is now dead. His death marked not just political violence, but the further erosion of the idea that dialogue itself is safe. American polarisation crossed into a darker phase.

Polarisation showed up economically as well. 2025 was the year the U.S. economy visibly bifurcated. One half of it was AI. The other was everything else. Capital, talent, chips and electricity flooded into the race toward AGI, turning AI into the single pillar supporting economic growth and equity markets. At the same time, much of Main Street felt increasingly strained. Long-duration interest rates stayed stubbornly high despite Fed cuts — an ominous signal for the rest of the economy untouched by the love of AI.

But even for AI, we already start to hear nervous chatter about a bubble. Yet, this is the last engine of American growth. It will not stop. It must not stop. The cost of shutting it down would be unbearable. The music has to keep playing.

Doubts about America’s future would not have felt so sharp if they had been offset by disappointment with China. But disappointing, in 2025, China clearly is not.

If 2025 was the year the myth of American exceptionalism finally cracked, it was also the year China decisively broke free from the doom and gloom narratives that had dominated the past few years.

What was striking was not just the reversal, but how fast it flipped. Barely a year ago, China was “uninvestable.” Empty investment conference seats. Sliding equities. Endless variations of the same story: China is peaking. China is collapsing. China is Japan. China is entering “an age of malaise”, poetically claimed by Evan Osnos, long-time China correspondent of The New Yorker.

Perhaps the best personification of this extreme pessimism is none other than my favorite Noah Smith, who pounded at the table and screamed:

China at the Peak! (July 2023)

Will China squander its moment in the sun? (Jan 2024)

(Read my rebuttal to him here)

Then suddenly the script flipped. “A great reckoning.” Dan Wang’s Breakneck became a phenomenal success and, for the first time in living memory, made China a mirror for the US intellectual elites to review itself. A flood of near-identical YouTube thumbnails and Twitter threads: I visited China and was shocked, as if written from the same template.

Admiration quickly morphed into panic. China isn’t just doing well, the story went — China is eating the world. China is too capable. China is unfair. China is making trade impossible.

The turning point had names. It started with DeepSeek and a frenzied few days in late January, causing Nvidia to lose $600 billion in value in the biggest one-day loss in human history, forever killing the previously ironclad assumption that the AI gap between the U.S. and China was vast and unbridgeable. It wasn’t.

The India-Pakistan conflict delivered another unintended demonstration effect. For the first time in history, the world saw Chinese weaponry perform in real combat conditions, and it’s not even the most advanced systems in its arsenal.

In the meantime, China’s surge in biotech was set to replicate its success in EVs and is on track to dominate the world, again. This, along with the stories of China-made diamonds, China-made wine, and even China-made caviar and foie gras, shows that this current wave of China possesses an unstoppable, all-encompassing nature.

And there is even more. The success stories of Nezha 2, Black Myth: Wukong, POP Mart, Rednote, and even luxury goods show the world that this wave of success isn’t just confined to the material world, but also manifests itself in the world of soft powers and intangibles, where China was long believed to be bad at.

At this stage, it seems only high-end chips and top talents are the US’s two remaining edges over China. But the first one appears on track to be over soon, while for the second one, Trump was busy self-sabotaging with visa restrictions and tighter anti-immigrant policies.

Then there was the trade war. Contrary to expectations, China did not panic. No theatrical escalation. No desperate concessions for Western applause. Just patience, timing and textbook game theory. Watching it unfold felt less like geopolitics and more like a Tai Chi demonstration against a furious heavyweight boxer. Every swing was met — not head-on, but sideways. The boxer thought he’d scored a knockout, then noticed he couldn’t breathe.

(I have to thank Trump and his trade war here, which made me one of the very few China-based authors writing for The New York Times, which is quite an amazing personal experience this year.)

Why did the U.S. miscalculate? At its core, it’s the hubris and self-complacency. A misguided belief in its permanent supremacy, which, in part, stems from what I dubbed “ideological monotony” last year. Just as the same belief has blinded the DC establishment and globalist elites to the woes of ordinary masses, it has also driven the Trumpists to the epic miscalculation that the US still has unmatched leverage.

And why didn’t China cave in? Because it had been preparing. A year ago, China’s emphasis on security over growth was mocked by commentators who saw it as an overreaction or ideological rigidity. Noah Smith attributed China’s peaking to China’s leadership, which wouldn’t give up “their obsession with control.” Wei Lingling claimed that “Xi’s tight control hampers stronger response to China’s slowdown.”

In 2025, the laughter stopped. It turned out that years of self-sufficiency efforts, redundancy building, and belt-tightening mattered. If not for these measures, China could have easily buckled when the real pressure arrived. What was deemed stupid suddenly looks far-sighted.

By the end of this confrontation, a de facto G2 world had taken shape. The U.S. has finally realised it misjudged the balance. In Kübler-Ross's five stages of grief terms, it has already moved past denial and anger, and now drifts somewhere between bargaining and depression, edging slowly toward acceptance. The empire is not yet collapsing, but it is clearly retreating. At home, it is consolidating and re-industrialising. Abroad, it is quietly disentangling from peripherals like Europe and Japan, while staying muscular in its own backyard, to Venezuela and Cuba.

China, however, is not free of risk. As external pressure eases, it may finally gain the strategic space to confront deep internal imbalances. If left unresolved, economic discontent will find a way of mutating into something darker, more grotesque, from both ends of the political spectrum.

Fortunately, we are witnessing clear signals in that direction. If China can pull this off again, we might have peace and prosperity for several generations at least.

With that said, I wish all of you a fruitful, exciting, and happy 2026!

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2025 in pictures:

Liang Wenfeng finally showed his face while reporting to China’s senior leader. This would only be the first time of at least two appearances in front of China’s top leadership within a few months, a record-breaking feat in its own right

“Have you said thank you?”

Nezha 2 is a story riding on the wave of Zeitgeist

The world is his menu, until it’s not

Trump, with unrequited love

A J-10C fighter jet, an old model of Chinese military that reportedly shot down several more advanced Western-made fighters

Aftermath of the US bombing on Iran's nuclear facilities, an event that could have meant armageddon, but quickly left news cycles

European leaders lectured by the school master

Charlie Kirk, moments before he was fatally shot

Xi, Putin and Modi standing together during the SCO Summit in Tianjin, in an obvious show of force for the rest of the world

Xi and Trump met in Busan, South Korea