In the escalating contest of soft power between China and the United States, the tables are turning in unexpected ways.
Donald Trump, in just 100 days back in office, has managed to deliver a string of unintended gifts to Beijing.
The recent Canadian election offers a vivid case in point. Under former Prime Minister Justin Trudeau, the ruling Liberal Party’s deference to Trump’s demands sent its approval ratings into a tailspin. But Mark Carney, Trudeau’s successor, seized a fraught moment – when Trump openly pressured Canada to become America’s “51st state” – and pushed back with rare resolve. The result: Canadians, galvanized by a sense of common cause against US bullying, rallied behind Carney and handed the Liberals a comeback victory.
This shift is reflected not just in politics but in everyday life. Canadians, bristling at Trump’s heavy-handed tactics, have rechristened “Americano coffee” as “Canadian coffee,” boycotted US streaming giants like Netflix and Disney, cancelled trips south of the border, and even off-loaded vacation homes in the States. Many now see the folly in following Washington’s lead -- especially the 100% import tariff on Chinese electric vehicles, which has backfired spectacularly.
The backlash against Trump’s trade war is starkly visible in global opinion polls. A recent IPSOS survey of 20,000 adults across 29 countries found that the share of respondents who believe the US “has a positive influence on world affairs” has plummeted from 59% six months ago to just 46% -- a drop of 13 percentage points. For the first time in the survey’s history, China overtook the US as having a positive effect on world affairs, a jump from 39% to 49% over the same period. Notably, the poll was conducted from March 21 to April 4, before the full global backlash to Trump’s latest tariffs took hold. Were it conducted today, China’s lead would likely be even greater.
The concept of “soft power”, the ability to win hearts and minds rather than coercion, was famously coined by American political scientist Joseph S. Nye, a former Assistant Secretary of Defense. Nye argued that America’s true strength since the Cold War lay not just in military or economic might, but in its scientific innovation, celebrated cultural diversity, and the global allure of its pop culture. This, he said, was the real source of US leadership.
Yet in a matter of weeks, Trump has managed to unravel much of that legacy. America’s soft power is in retreat: its goods, services, and even its culture are being shunned, especially among traditional allies. The most striking drop in America’s global image is among its closest friends -- Britain, Italy, Ireland, Australia, Spain, France, Germany, Belgium, Sweden, the Netherlands, and Canada -- all now registering less than 40% approval for the US as a positive force.
Trump’s approach to the tariff war has been nothing if not combative. He has summoned nations to the negotiating table with a “take it or leave it” attitude, wielding tariffs as blunt instruments of extortion. China, refusing to be cowed, has responded in kind-imposing its own sweeping tariffs, restricting rare earth exports, and blacklisting US firms. On April 29, China’s Ministry of Foreign Affairs released a bilingual video titled “China Won't Kneel Down!”-- a pointed declaration that Beijing will not bow to US pressure. The message: China won't back down, so the voices of the weak will be heard, bullying will be stopped, and justice will not disappear from the world.
Foreign Minister Wang Yi, speaking at the BRICS Foreign Ministers’ Meeting in Rio de Janeiro, lambasted the US for using tariffs as bargaining chips and urged BRICS nations to unite against all forms of protectionism. China, now cast as the vanguard in resisting US tariff hegemony, has rallied much of the Global South to its side. Some European diplomats have even expressed grudging admiration for Beijing’s defiance, noting that only China has the nerve to stand up to Washington. Other countries, wary of angering the US, have adopted a wait-and-see approach, refusing to make concrete offers, thus rendering negotiations largely performative.
The international arena is now a jungle where both hard and soft power are in play -- not just national strength, but also the leadership of heads of state and the resilience of their peoples. In this opening round of the China–US showdown, the American bully appears hamstrung by China’s counterpunches and the Foreign Ministry’s “China Won't Kneel Down!” campaign. Even Trump, uncharacteristically, has stepped back from direct confrontation, leaving Treasury Secretary John Besant to trumpet dubious claims about the trade war costing China 10 million jobs -- a scare tactic that has lost its sting. China, for its part, seems determined to go head-to-head with the US, and in this bruising contest of soft power, Beijing has already seized the upper hand.
Lo Wing-hung
Bastille Commentary
** The blog article is the sole responsibility of the author and does not represent the position of our company. **
At the arrival of 2026, the happiest thing is to see the "Hong Kong is dead" narrative—proclaimed so loudly by Western voices—die yet again.
Foreign Money Returns Home
The West has written Hong Kong's obituary more times than you can count. They believed the city's return to China should have been its death sentence. American magazine Fortune declared "The Death of Hong Kong" on its 1995 cover—two years before the handover even happened. Hong Kong survived the Asian financial turmoil in the early post-handover years. It survived SARS. Then came 2019's Black Riots, followed by US sanctions on Hong Kong officials in 2020 and the pandemic's hammer blow. Foreign capital fled in an American-orchestrated exodus, with much of it landing in Singapore.
Last February, Stephen Roach—Yale University senior fellow—wrote in the UK's Financial Times with a headline that said it all: "It pains me to say Hong Kong is over." Foreign investors don't just track economic growth when they assess Hong Kong. They watch the stock market. And over the past year, Hong Kong's miraculous stock market comeback has bankrupted the "Hong Kong is dead" theory.
Hong Kong's economy grew an estimated 3.2% in 2025—ranking it among the developed world's top performers. But the stock market performance was getting really interesting. Average daily turnover in the first 11 months hit HK$230.7 billion—a massive 43% jump compared to 2024's same period.
Record-Breaking Fundraising Wins
The Hong Kong Stock Exchange crushed it in 2025. A total of 119 new listings raised HK$285.8 billion—a staggering 220% year-on-year increase and the highest since 2021. According to KPMG's report, HKEX ranked first globally in fundraising. The New York Stock Exchange and Nasdaq tied for second place. Looking ahead, HKEX's fundraising is estimated to reach HK$300-350 billion in 2026, keeping it among the world's top exchanges.
Sure, Mainland capital is investing in Hong Kong. But foreign capital's return has been the real game-changer behind the stock market's strong performance. According to fund industry insiders, what we're seeing now is only wave one—primarily hedge funds and other medium-to-short-term players. As Hong Kong's trading volumes swell and quality Mainland companies list here, the long-term foreign funds will gradually return. The outlook for Hong Kong stocks continues to look favorable.
America's narrative said Hong Kong's National Security Law would scare capital away. Reality proved exactly the opposite. Hong Kong's stable environment gave Chinese companies the confidence to list here. America's targeting of Chinese concept stocks listed on its exchanges was self-destruction—forcing quality Chinese companies to turn to Hong Kong for listing instead. This made Hong Kong's stock market bigger and stronger, compelling even bearish foreign capital to come back.
Beijing's Seal of Approval
President Xi's remarks when meeting Chief Executive John Lee during his duty visit to Beijing in mid-December reveal what work the central government values in Hong Kong. President Xi opened with praise for the Chief Executive's courage and initiative in leading the SAR government. He highlighted four key achievements: steadfast maintenance of national security, successful Legislative Council elections, proactive integration into national development, and achieving steady economic growth.
President Xi's assessment underscores Beijing's high recognition of Hong Kong's ability to do both—safeguard national security and develop the economy simultaneously. Some Hong Kong people believed that having transitioned "from chaos to governance and then to prosperity," the city should set aside national security to focus on economic development. Reality proved this view wrong. Hong Kong must strike a balance between these seemingly contradictory goals and advance on both fronts at once.
Look at Hong Kong's development over the past five years. The city emerged from Black Riots and the pandemic in 2021, achieving a strong rebound from the bottom in 2023. The return to normalcy brought revenge spending that temporarily elevated market sentiment.
But entering 2024, local consumption patterns underwent structural changes. Hong Kong people shopping across the border diverted local retail spending. The strong Hong Kong dollar—tracking the US dollar—and high interest rates suppressed economic activity, leading to structural adjustment.
By the second half of 2025, Hong Kong entered a phase of moderate recovery. The property market began stabilizing after its decline. With the US starting rate cuts in September, capital supply loosened. Hong Kong can continue along this recovery path in 2026—that's the estimate anyway.
Despite the optimism, Hong Kong people must keep working hard. The many vacant shops you see on the streets tell the story—retail economy pressure remains real. In 2024, Hong Kong's total retail sales value of HK$376.8 billion represented a 7.3% year-on-year decline. That's painful for the retail sector.
Retail's Reversal Ahead
Through October 2025, retail sales values remained comparable to the previous year. But consumption began recovering in the second half—retail sales value rose 3.8% in August, 6% in September, and 6.9% in October. 2025 showed an early decline followed by growth, with accelerating consumption momentum. Retail consumption is expected to reverse its decline in 2026.
During this retail transformation, we Hong Kong people must continue their efforts. Old businesses will still be eliminated—that's inevitable. Strategic adjustments are required. New opportunities must be pursued.
Bottom line: Hong Kong's economic performance in 2025 proves once again that the "Hong Kong is dead" theory dies—one more time. Hong Kong has weathered different shocks repeatedly in the past, emerging reborn each time like a phoenix from the ashes.
Lo Wing Hung
