Recent trade talks deliberately sidestepped core geopolitical issues like Taiwan and the South China Sea. This highlights that economic agreements are merely treating symptoms. The fundamental problem is a geopolitical power struggle, which will continue to undermine any economic progress.
The Gaokao produces millions of highly educated graduates, but China's slowing economy and the rise of AI cannot absorb them. This mismatch between educational output and job market capacity creates a potential powder keg of youth unemployment and social unrest.
China holds a choke point on the global pharmaceutical supply chain, being the sole source for key ingredients in hundreds of US medicines. This leverage could be used to restrict supply, creating shortages and price hikes, opening a new, sensitive front in geopolitical tensions.
The conflict between Dutch chipmaker Nexperia and its Chinese parent, triggered by US sanctions, shows how European companies are becoming unintended casualties in the broader US-China geopolitical struggle, extending the tech war's impact beyond the two primary nations.
While designed to reward merit, China's Gaokao system favors the wealthy. Families in elite districts or those who can afford expensive private tutoring have a significant advantage, perpetuating inequality rather than providing a level playing field for all students.
The Gaokao rewards rote memorization and test-taking skills over creativity and boundary-pushing. This educational culture could be a long-term liability for China's ambitions to become a global innovation leader, as it doesn't cultivate the imaginative mindset seen in other tech hubs.
While the US administration celebrated a deal, China's official media has remained silent, only mentioning a need to finalize follow-up steps. This discrepancy suggests Beijing views the agreement as a tentative pause, waiting to see US actions before fully committing.
The Nexperia dispute reveals China's strategic leverage. By controlling the supply of mid-tech chips for basic car functions like airbags and windows, Beijing can cripple major European automakers, demonstrating its influence over global supply chains beyond just high-end tech.