Europe Sees China Closing the Gap on US Global Power

"China comes every time closer." This assessment from a former European Union leader captures what many observers see but few dare to articulate: the world's power balance is shifting.

Jose Manuel Durao Barroso, who led the European Commission from 2004 to 2014, this week offered a frank evaluation of global power dynamics. While the United States remains the "most important global power," he noted, China is steadily closing the gap through economic strength, technological advancement, and expanding influence.

The Numbers Don't Lie

Barroso's observation isn't based on speculation. China's economy, measured by purchasing power parity, has already surpassed the US. In nominal terms, it sits at roughly 70% of America's GDP. More striking is China's manufacturing dominance—the country now produces 30% of global manufacturing output, compared to America's 16%.

Technology tells a similar story. In artificial intelligence patents, 5G infrastructure, electric vehicle batteries, and renewable energy, Chinese companies are either matching or outpacing their American counterparts. Huawei, BYD, and CATL have become household names in global markets, challenging the traditional dominance of Western tech giants.

Why Europe's Perspective Matters

Barroso's comments carry particular weight because they come from Europe—a region that competes with both superpowers while depending on neither exclusively. Unlike countries forced to choose sides, European leaders can offer relatively objective assessments of the US-China rivalry.

The EU has designated China as a "systemic rival" while maintaining it's also a partner and competitor. This nuanced approach reflects Europe's recognition that the world isn't neatly divided into opposing camps. Countries and regions must navigate complex relationships with both powers.

Implications for Global Markets

For investors and businesses, this power shift creates both opportunities and challenges. Supply chains built around American technological leadership now face disruption from Chinese alternatives. Companies must increasingly consider geopolitical risks alongside traditional business factors.

The semiconductor industry exemplifies this challenge. While American companies like Intel and Nvidia maintain technological edges in certain areas, China's massive investments in chip manufacturing threaten to reshape the entire industry. Meanwhile, export controls and trade restrictions force companies to choose between markets.

The Middle Power Dilemma

Perhaps most affected are middle powers caught between the two giants. Countries like South Korea, Australia, and several European nations face pressure to align with one side while maintaining profitable relationships with both.

This dilemma extends beyond economics to technology standards, military alliances, and even cultural exchanges. As the US-China rivalry intensifies, neutral ground becomes increasingly scarce.

The answer may determine whether the 21st century brings cooperation or conflict on a scale we haven't seen since the Cold War.