Transformation of global superpower from US to China
When the red flag that once flew over the Kremlin in Moscow was lowered silently on 26 December 1991, it was not just a single state that collapsed, but an era came to an end.
With the disintegration of the (former) Soviet Union, the first Cold War was also buried in the pages of history. The world breathed a sigh of relief, America declared victory and the notion emerged that the chapter of ideological struggle was closed. Francis Fukuyama famously asserted that history had ended. However, as we stand in 2026 and assess the global landscape, it becomes evident that the Cold War did not truly end; it was merely a pause. The same struggles and power dynamics persist, with only the players and methods having changed. This time, China stands in the arena opposite America, a quietly rising power challenging the global order.
After 1991, the US embraced China with the belief that trade would make China wealthy and that wealth would lead to democracy. China became a member of the WTO in 2001 and American factories moved to China, with everyone feeling optimistic. However, when the US was hit by an economic crisis in 2008, a new China emerged under the light of the Beijing Olympics—confident, wealthy and quietly building its naval fleet. In 2009, as the US sensed danger, Obama announced the “Asia Pivot” policy to counter China. The storyline took a pivotal turn in 2011 when, for the first time, a US defense document referred to China as a “peer competitor.” In the South China Sea, China began constructing islands. In 2012, Xi Jinping came to power, announcing initiatives like “Made in China 2025,” asserting that China would produce not just toys but also integrated circuits, AI and 5G technologies. Alarm bells were ringing in Washington.
In 2017, Trump’s national security strategy formally declared that “China and Russia are revisionist powers.” That day marked the official beginning of the second Cold War. Today, there are only two significant powers militarily and economically: the United States and China. Many observers see China advancing in various military fields. It possesses drone swarms that can turn the sky into a hive of activity, a BeiDou satellite system that stands eye-to-eye with GPS and stealth bombers that can pass undetected by radar. The world glimpsed China’s network-centric warfare doctrine in May 2025 when Pakistani forces, combining J10C, PL-15, BeiDou, AWACS and real-time satellite imagery, devised a strategy that left Europe’s pride, the Rafale, in the dust. China’s aircraft carriers, drone carriers, hypersonic missiles and new stealth ships have yet to showcase their prowess on the battlefield.
On the other hand, the so-called superpower, the United States, has been in constant conflict for the past 30 years. Every new weapon is tested in the sands of Iraq, the mountains of Afghanistan and the waters of the Red Sea. One side has a laboratory and the other possesses experience gained from battles of the first rival.
According to data from 2025, the GDP of the United States is approximately $28.8 trillion, with an annual growth rate of about 2.5%. In contrast, China, the world’s second-largest economy, has a GDP of $18.5 trillion and an annual growth rate of 5.2%. This disparity in growth rates causes concern in the US, as if China continues to develop at this pace, it could become the world’s number one economy before 2035. Washington understands that stopping China is impossible, leading to the birth of the “Policy China Slow.”
The most critical front of this new Cold War is energy. China is the largest oil importer in the world and its economy heavily relies on external energy sources. The US has targeted this vulnerability by imposing sanctions on countries like Iran, Russia, and Venezuela in an attempt to disrupt China’s supply chain. Iran, in particular, sells 90% of its oil to China. Recent tensions between the US and Iran, along with Iran’s blockade of the Strait of Hormuz, shook global markets; however, Chinese ships continued to pass through Hormuz freely. When the US noticed that closing Hormuz did not impact China, the US Navy began to blockade Iranian waters.
At this point, a new player enters the scene: the small, independent private “teapot refineries” in China’s Shandong Province. They are called “teapots” because of their kettle-like shape. These refineries source cheaper oil from Iran and Russia while ignoring US sanctions. They account for 25% of China’s total refining capacity and receive discounts of $8 to $10 per barrel on Iranian oil. In March, they imported a record 1.8 million barrels of Iranian oil daily, using stockpiles bought before the conflict. Thus, when Sinopec’s refinery production fell by 7.6%, the teapots were operating at 54.58% capacity. This system has largely shielded China from sanctions. In April 2026, the US imposed sanctions on several teapot refineries, including Petrochemical Hengli, blacklisting 35 entities and 19 ships. The US Treasury Secretary described it as financially choking these entities. China rejected the sanctions and warned global financial institutions, signaling it was no longer defensive but had taken an aggressive stance.
The second phase of the Cold War differs from the first. Economies are interconnected, with trade reaching $700 billion. The US cannot stop China; it can only slow it down. From the Strait of Hormuz to teapot refineries, the US erects barriers through “slow China” policies, while China navigates around them strategically.
Is the American era coming to an end? The balance of global power is rapidly shifting. China has become a complete strategic challenger. Its shift toward Yuan and digital Yuan trading challenges the global financial system. If China establishes an alternative to the dollar system, it will pose the greatest threat to US supremacy. Thus, Cold War 2.0, begun in 2017, appears to be reaching its conclusion in 2026, alongside the decline of America’s superpower status. China’s rejection of US sanctions signals a changing world order.