China envisions a world in harmony. Nations talk through their differences instead of fighting them out, and the rising tides lift all boats.
On June 18, the British Financial Times republished an article by Bridgewater Associates founder Ray Dalio, titled "China's Tribute System and the New World Order." Dalio writes that earlier this year he spent a month in Asia, meeting with senior policymakers from China and across the region. He returned convinced that the global order is undergoing a profound shift.
Two developments stand out.
First, Washington's handling of Iran's blockade of the Strait of Hormuz has left Asian leaders broadly skeptical about whether the United States is truly willing to bear the costs of war.
Second, China is generating enormous wealth through exports. Its companies and banks are piling up vast capital surpluses. That buildup is pushing the RMB higher and driving its wider use in trade and financial transactions. China's investors and capital markets are emerging as genuine rivals to their American counterparts.
Dalio then argues that, having visited China over 42 years, understanding China's worldview is essential. That worldview, he says, is rooted in Confucian culture, the tributary system, and Sun Tzu-style strategic thinking.
China's historical lessons matter just as much. During the century of national humiliation, foreign powers seized vast swathes of Chinese territory and exploited its people. A lesson seared into China's psychology and strategic outlook.
The tribute system Dalio refers to describes an order between states built on explicit hierarchical roles: not one of equality, but one that openly acknowledges superior and subordinate relationships. He argues that China's leaders do not seek to build an empire to control other nations, because doing so would be inefficient.
The Western approach, Dalio argues, has always relied on war to seize territory and impose control. The primary reason why the United States maintains 700 to 800 military bases across 80 countries. China, by contrast, has only one overseas military base. Dalio even interprets the stream of foreign leaders who visited China over the past six months as a sign of willingness to forge ties with China akin to tributary allegiance.
Dalio gets some things right. China does indeed practice "winning without fighting" — one need only observe how President Xi has handled his dealings with Trump to see this in action. But China has no desire to build a tribute system. Such feudal imperial mindset is fundamentally at odds with the modernizing vision of China's current leadership.
Dalio's use of the tribute system as a framework for understanding China's approach to international relations does have roots in Western political science and international relations theory. Two theories are most frequently cited.
Finlandization Theory
The term "Finlandization" originated in West German political circles during the Cold War. Western strategists now routinely invoke it as a modern analogue for a "neo-tribute system."
The concept is straightforward. A smaller nation, facing an overwhelming neighbor, quietly abandons any foreign policy that might provoke it. In return, the powerful neighbor leaves its sovereignty and economy intact. Survival, not pride, drives the bargain.
Many Western hawks argue that China's economic diplomacy has a hidden agenda. The Belt and Road Initiative, they contend, is the primary vehicle. Its true purpose, they say, is to "Finlandize" neighboring countries and even Europe into a modern-day form of tribute extraction.
The Tianxia (All-Under-Heaven) Framework
Western scholars specializing in East Asia — such as Brantly Womack — frequently bring the ancient Chinese concept of tianxia (天下, "all under heaven") into Western theoretical discourse.
The core argument cuts to a fundamental divide. The West champions the Westphalian system, built on the absolute equality of sovereign states. The East, by contrast, emphasizes "relationalism." International politics is viewed as a web of asymmetric but reciprocal relationships. Proximity, hierarchy, and mutual obligation matter more than legal equality.
These scholars argue that China's vision of a new world order is not built on legal contracts binding nations together. It is defined by how close, or how distant, each country's relationship with Beijing actually is. Precisely what Dalio describes as "superiors and subordinates acknowledging their relative positions, with pressure applied through harmony and strategic acumen."
These two Western interpretations of China's supposed tributary mentality represent two distinct schools of thought.
The first, the realist school, leans critical, viewing China as simply using repackaged language to expand its sphere of influence.
The second school is cultural-historical in its approach, and it takes a more sympathetic view. It accepts that China operates from a security logic that is genuinely different from the West's. It also holds that China's preference for non-violent, coercion-free order is real. The condition is simple. Other nations must satisfy China's cultural-psychological need to “save face, earn respect, and occupy a central role”. Meet that need, and China will choose harmony over confrontation every time.
Alas, neither of these Western political theories can adequately explain China as it actually exists today. China has put forward the concept of “a community with a shared future for mankind", as the strategic foundation of its foreign relations. Modern China's external policy differs fundamentally from the ancient tribute system in two key respects.
Asymmetric Reciprocity
China advocates a correct approach to justice and interests — placing righteousness before profit. It extends unilateral tariff exemptions to the vast majority of African nations, helping them export more goods to China. It has also funded the construction of substantial infrastructure on their behalf and written off portions of their debt.
Such are the actions of a responsible great power. Having grown prosperous itself, China hopes to extend the same opportunity to other developing nations.
Sovereign Equality
The tribute system's defining characteristic is an unequal ruler-subject relationship. The vision of "A Community of Shared Future for Mankind," by contrast, is grounded in the legal principle enshrined in the UN Charter: the absolute equality of sovereign states and non-interference in internal affairs.
This differs from the ancient tribute system, which demands the political submission of weaker states. A framework built on international treaties rather than bilateral relationships.
Western political scientists — even those sympathetic China-watchers with deep understanding of the country — tend to characterize China's leaders as driven by a need to "save face, earn respect, and occupy a central role."
In reality, those three descriptions fit US President Trump far more aptly. It is American leadership, not Chinese, that insists on remaining the supreme superpower, the center of the world.
Consider the controversy in which Trump claimed that Italian Prime Minister Giorgia Meloni had "begged" to take a photo with him at the G7 summit, only for Italy to flatly deny the allegation and subsequently cancel its foreign minister's visit to the United States.
Clearly, it is not Beijing that cannot afford to look small.
Americans have a habit of projecting their own impulses onto others. Since US GDP surpassed Britain's in 1914, America has spent over a century constructing a system of asymmetric global power dependency centered on itself. Now that this hegemony is showing cracks, America projects its own image onto China.
China does not need other nations to come and pay tribute. It simply seeks to build a peaceful, mutually beneficial new world.
Lo Wing-hung
Bastille Commentary
** 博客文章文責自負,不代表本公司立場 **
China's strategy is simple: throw one punch to avoid a hundred.
On Wednesday, August 5, China fired back with five consecutive moves to counter a string of recent US measures that Beijing sees as hostile. A spokesperson for China's Ministry of Commerce called the countermeasures "generally restrained." The message was clear: since the China-US presidential meeting in Busan, the US Federal Communications Commission has ignored China's strong opposition and industry appeals. It keeps stretching the concept of national security to roll out restrictions on China.
Meanwhile, the US has added over 40 Chinese entities to the so-called Uyghur Forced Labor Prevention Act entity list. China demands the US immediately revoke these measures. And if Washington insists on new restrictions, "China will further retaliate."
China's moves are a direct answer to a series of petty US actions that fall into two main areas.
First, the FCC. Before the government took action, the People's Daily fired a warning shot. Under the byline "Zhong Sheng," it blasted the FCC for hiding behind banners like "non-discrimination" and "national security" to discriminate against and suppress Chinese companies.
The FCC recently added foreign-made power inverters and advanced robotic equipment to its so-called "Covered List." That means new models can't get certification and are locked out of the US market. The paper called the tactic typical unilateral bullying.
This isn't new. Back in 2021, the FCC put telecom and video surveillance gear from five Chinese companies on the list. Since then, it has steadily widened the net. In April, it proposed revoking the qualifications of testing and certification bodies from countries that haven't signed a "Mutual Recognition Agreement" with the US. That artificially raises the compliance bar for Chinese products.
And now, Reuters reports the FCC is drafting a ban on imports of new Chinese-made optical communication transceivers for data centers.
Second, the Xinjiang sanctions. On July 30, the US Department of Homeland Security added over 40 Chinese entities to the entity list under the Uyghur Forced Labor Prevention Act. The move, effective August 3, swells the list from 144 to 187, the biggest expansion since it was created. The new targets span food, clothing, and cotton. They include snack maker Qia Qia melon seeds, frozen food producer Zhengzhou Synear dumplings, and apparel brand Fujian Septwolves.
When the news hit the Chinese internet, netizens erupted in mockery. The joke going around teasing that "eating melon seeds can easily damage US soldiers' teeth."
China didn't waste a second. It fired back with five countermeasures, and the first one hits where it hurts: drones. Beijing is tightening export controls on drones and related technologies to the US. From now on, every shipment of drones, key components, and controlled technologies will face a strict case-by-case review.
And forget about any 'licensing facilitation' exemptions—those are off the table. Think about it: China is the world's drone superpower. The US wanted to block Chinese drones from coming in. Now China is flipping the script—it's restricting what goes out. The message is blunt: just because you want to buy doesn't mean we'll sell. Especially not advanced drones and components with military uses.
The second measure is a highly targeted strike: China has added six US entities to its Countermeasures List, all of which it says assisted US sanctions on Xinjiang-related companies.
Applied DNA Sciences, Inc. is believed to provide DNA-based traceability and verification services for relevant products.
Stratum Reservoir, LLC is believed to conduct stable-isotope testing and related analysis to determine the origin of Xinjiang-linked materials.
Altana Technologies, Inc., which operates a global supply-chain mapping and management platform, is believed to help the US government trace supply chains involving Xinjiang-linked products.
The Responsible Business Alliance, which promotes responsible business conduct in global supply chains and operates assessment programmes for member companies, is believed to help companies exclude Xinjiang-linked products from their supply chains.
Verité Group, Inc., a nonprofit focused on labour rights and human rights, examines alleged forced labour in global supply chains.
Human Rights in China, a New York-based human-rights organization, advocates sanctions related to Xinjiang.
China’s countermeasures against these six entities are therefore highly targeted.
The third measure targets a US compliance testing company that helped the FCC impose China-related sanctions. That company will now be locked out of the compliance testing business in the Chinese market. The ripple effect: it could drive up compliance costs for US products trying to enter China.
The fourth measure hits at the heart of product certification. China is suspending the entrustment of US agencies to conduct factory follow-up inspections for CCC certification. Remember, CCC certification is a must-have for US products to enter the Chinese market. By pulling the plug on US inspectors, China shifts the review work to its own agencies. That spells more time and more uncertainty for American exporters.
The fifth measure, a national security investigation into imported US printing and copying office equipment. On the surface, this one looks like a light tap.
China imported about $2.08 billion worth of such equipment in 2025, mostly from Japan ($1.72 billion). The US slice was small. But this is just the opening move.
The US has banned Chinese software and hardware from connected and autonomous vehicles on American roads—and until now, China held its fire.
Now Beijing is investigating US printers and copiers on national security grounds. The message is unmistakable: if Washington plays the national security card at every turn, Beijing can just as easily slap an 'unsafe' label on American phones and EVs running US software.
But that's not the main battlefield. Artificial intelligence is the real arena. Over the past month, Chinese companies have rolled out one high-performance, low-cost AI model after another, sending US AI giants reeling. When Anthropic released a new model in June, the US government demanded it be kept out of non-American hands. The clash forced Anthropic to pull the model. Trump signed an executive order in June setting up an AI safety framework, including a voluntary program for companies to submit cutting-edge models for government review.
Then Chinese developers like Moonshot AI and DeepSeek unleashed open-source systems that rival top-tier US models, fueling a fierce debate in Washington over how to regulate open-weight models. Anthropic CEO Dario Amodei pushed for mandatory government safety reviews for both open and proprietary models, taking direct aim at Chinese open-source systems. He won backing from Treasury Secretary Bessent and others, but ran into a wall of opposition from US tech giants, including Nvidia.
On August 4, the Trump administration delivered its verdict. In a meeting led by the Office of the National Cyber Director, top US AI companies were told that under the new AI safety framework, open-source models from Chinese rivals would not face US government safety testing.
For Anthropic, it was a crushing defeat. US National Cyber Director Sean Cairncross later spelled out the thinking at a cybersecurity conference in Las Vegas: the US government wants to back the American open-source AI ecosystem. He called such models 'tremendously valuable' and insisted the regulatory framework must stay 'flexible.'
Otherwise, he warned, 'it would not only stifle growth, development, and innovation, but the regulatory regime would become obsolete within 48 hours of completing its process.'
The bottom line: Washington keeps chipping away at China with petty moves. But when the pile gets high enough, Beijing punches back hard—and signals it has heavier blows ready.
President Xi is due to visit the US in September, and Trump will be in Shenzhen in mid-November for the APEC summit. Trump doesn't want things to spiral out of control; at crunch time, he'll yank the leash on his officials.
The real battlefield is artificial intelligence. It was almost certain that the White House's decision to leave Chinese open-source models alone came after fierce pushback from China.
Lo Wing-hung
