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The writer is a fellow at the Asia Society Policy Institute’s Center for China Analysis
To understand China’s approach to the trade and tech war with the US, you have to understand the psychology of the man leading it. And that means grappling not just with ideology or grand strategy, but with humiliation. As it turns out, Xi Jinping is not just fighting a trade war. He’s fighting a memory.
When a chorus of Chinese mouthpieces cited Mao Zedong’s On Protracted War to frame the latest chapter in the US-China stand-off, it wasn’t just a throwback to revolutionary lore. It was a message to domestic audiences that this wasn’t a temporary trade scuffle, but a test of national resolve.
Mao argued in 1938 that China, militarily weaker and fragmented, couldn’t win through direct confrontation. But it could endure. Victory would come through patience and perseverance, by dragging the enemy into a war of attrition — through retreat, stalemate, and finally, counterattack. Today, it’s not Japanese troops but American tariffs and tech sanctions that China is confronting. The battlefield has shifted, but the logic is hauntingly familiar.
State media outlets’ revival of Mao’s wartime essays — written in the caves of Yan’an as Japanese forces advanced — also says something deeper about Xi himself.
Xi was born into red royalty. His father, Xi Zhongxun, was a top party leader. But that protection vanished overnight when he was purged in the early 1960s. The teenage Xi was cast out of elite schools and branded a political liability. “Back then, our classmates all looked down on us and avoided us, as if we didn’t exist,” said a fellow student who was ostracised.
That dislocation cut deep. It instilled in him not just a distrust of political tides, but a hardened belief in self-preservation through discipline, control and loyalty to the system that had once abandoned him.
This is the emotional architecture behind Xi’s governing instincts — and it directly shapes how he interprets foreign pressure. US policymakers may see tariffs and chip restrictions as policy tools to advance US interests. But for Xi, they echo something more raw: the experience of being diminished, delegitimised, cast aside. Humiliation, once personal, has become national. The trade wars are a thinly veiled attempt to shame and contain China, to deny it technological adulthood. The appropriate response, in Xi’s mind, may not be a negotiated settlement but a long war of resistance.
In fact, hardship isn’t merely to be endured; it’s something to be conquered. Xi was sent to a rural village during the Cultural Revolution. He initially fled, but later returned and remade himself there. He lived in a cave. He shovelled sewage. He read Marx and repeatedly applied to join the party, until it finally accepted him. It was a crucible. “Knives are sharpened on the stone,” he has said.
That outlook is now baked into China’s long-term strategy. Xi is not looking to “win” the trade war in a conventional sense. He’s positioning China for a drawn-out, grinding contest by building domestic capacity, hardening supply chains and rooting out perceived vulnerabilities to foreign pressure. Huawei’s development of its Ascend AI chips — built secretively in the shadow of US sanctions with state-directed support — is a case in point.
These chips, particularly the 910D, are beginning to rival Nvidia’s H100 in performance. The same logic applies to rare earths — another arena where China, instead of chasing symmetry, weaponises asymmetry. By tightening export controls on strategically critical metals like dysprosium and terbium, China is reminding Washington that, in a long contest, dependency is leverage — and Beijing has plenty of it.
But there’s a flip side. Once struggle is elevated into a moral narrative, flexibility begins to look like capitulation. And that rigidity is showing up at home. Despite promises to pivot towards domestic consumption and rebalance the growth model, progress is halting. Local officials and bureaucrats are risk-averse. The anti-corruption campaign, while politically effective, has paralysed many mid-level decision makers. The party is disciplined, but it’s also brittle.
In trying to inoculate the CCP against vulnerability, Xi may be undermining the very adaptability the economy now needs. The “protracted war” mindset is historically resonant and politically useful. But it also creates strategic blind spots — especially in an interconnected, fast-moving global economy. Sometimes resilience requires adaptation, not just endurance.
For US policymakers, this means that pressure alone won’t bring Xi to the table. He’s not bargaining — he’s resisting. He believes he has history on his side. And the more the US tries to force a break, the more it confirms his suspicion that humiliation, not compromise, is the endgame.
