For decades, the United States and China have pursued global expansion, but their approaches could not be more different. While the U.S. has largely relied on military force, alliances, and financial sanctions, China has taken a more strategic, economic, and long-term approach - buying up ports, key industries, and infrastructure worldwide.

One of the most striking examples of this contrast is the Panama Canal - a vital maritime chokepoint that the U.S. once controlled but has increasingly fallen under Chinese influence. As Donald Trump recently stated, the U.S. should "take back control" over the canal, after Panama "essentially sold it" to China. This situation perfectly illustrates how China has expanded its influence through deals, not wars - something the West seems to have underestimated for decades.

The Panama Canal: A Case Study in Chinese Strategy

The Panama Canal is one of the most important trade routes in the world, handling around 5% of global maritime trade. It connects the Pacific and Atlantic Oceans, allowing ships to bypass the long and treacherous route around South America.

Historically, the U.S. controlled the canal after building it in 1914, but in 1999, control was transferred to Panama through the Panama Canal Treaty. Over the years, China has secured a dominant economic foothold in Panama by:

• Gaining control over key ports on both ends of the canal through Chinese state-owned companies.
• Investing in logistics, trade, and infrastructure projects in Panama.
• Establishing Panama as a strategic hub in its Belt and Road Initiative (BRI).

Essentially, while the U.S. thought military control was enough, China played the long game, using economic influence to dominate trade routes without firing a shot.

China’s Expansion: Smart Deals, Strategic Control, No Wars

1. Economic Expansion Instead of Military Conquest

While empires of the past grew through war and territorial annexation, China has taken a different approach: it buys influence instead of fighting for it. Through a combination of foreign investments, infrastructure projects, and debt diplomacy, China has positioned itself as a dominant global power without firing a shot.

A. The Panama Canal Case and other trade routes

The Panama Canal, one of the most critical trade routes in the world, was under U.S. control until 1999, when it was handed over to Panama. Since then, Chinese companies have made significant inroads, investing in ports and logistics around the canal. This allows China to control key choke points in global trade, securing its economic interests while the U.S. watches from the sidelines.

B. Belt and Road Initiative (BRI)

China’s Belt and Road Initiative (BRI) is perhaps the most ambitious geopolitical strategy of the 21st century. Through massive infrastructure investments, China has gained control over ports, highways, railways, and energy projects across Africa, Asia, Europe, and Latin America.

• Piraeus Port in Greece – Now controlled by China’s COSCO, making it a major gateway for Chinese goods into Europe.
• Sri Lanka’s Hambantota Port – China gained a 99-year lease after Sri Lanka failed to repay its debt.
• Djibouti Military Base – China established its first overseas military base in Djibouti, securing a presence near key maritime routes.

Instead of conquering territories, China locks nations into economic dependencies that often result in long-term influence and control.

2. Industrial & Technological Acquisitions

China has aggressively pursued strategic acquisitions in high-tech industries, robotics, and critical infrastructure. Some key examples:

• KUKA Robotics (Germany) – A Chinese company acquired this leading German robotics firm, gaining access to advanced automation technology.
• Machine Tool Industry – China has systematically acquired firms specializing in high-precision engineering, securing dominance in industrial manufacturing.
•  Rare Earth Metals – China controls the vast majority of rare earth mining and processing, critical for global tech production.

These acquisitions give China an edge in key future industries, while the West remains focused on traditional military power.

3. Financial & Digital Influence

China has also worked to reduce dependence on the U.S. dollar and increase global reliance on its own financial systems:

• The digital yuan is being tested as an alternative to the U.S. dollar in trade settlements.
• BRICS nations (Brazil, Russia, India, China, South Africa) are exploring alternative financial systems that reduce reliance on Western banking structures.
• Chinese tech companies like Huawei and TikTok have expanded China’s digital influence worldwide, despite Western attempts to curb their reach.
  
  

The U.S. Approach: Military Intervention, Sanctions & Alliances

1. Military Expansion & Wars

While China was making strategic business deals, the United States was engaged in multiple military conflicts. Over the last few decades, U.S. foreign policy has been defined by:

• Iraq War (2003-2011) – Overthrowing Saddam Hussein but leading to prolonged instability.
• Afghanistan War (2001-2021) – A 20-year occupation that ended in a chaotic withdrawal.
• Libya (2011) – A NATO-backed intervention that left Libya in a state of civil war.
• Syria (2014-Present) – U.S. involvement in the ongoing conflict, supporting rebel groups and fighting ISIS.

These wars have cost trillions of dollars, yet they have not secured long-term U.S. dominance in the regions involved.

2. Sanctions as a Weapon

Instead of making business deals, the U.S. has relied heavily on economic sanctions to pressure other nations. While sanctions can be effective in some cases, they also push countries closer to China and alternative financial systems.

• Russia sanctions (post-2014) – After sanctions following the Crimea annexation, Russia shifted towards deeper economic ties with China.
• Iran sanctions – U.S. pressure on Iran has led it to seek partnerships with China for trade and investment.
• Venezuela sanctions – China has stepped in as an alternative economic partner for the heavily sanctioned country.

Sanctions isolate nations from Western economies but do not stop them from finding new allies—often in China.

3. Military Alliances & Presence

The U.S. maintains hundreds of military bases worldwide and uses alliances such as NATO to project power. While this provides strategic advantages, it also comes with high costs and has led to growing resistance from countries that prefer a non-aligned approach.

• NATO expansion – Seen as a counter to Russia, but has fueled tensions in Europe.
• Pacific Alliances (AUKUS, QUAD) – Designed to counter China’s rise in Asia but have not stopped China’s regional dominance.
  
  

Has the West Been Sleeping?

While the U.S. and its allies have been focused on military interventions, political disputes, and economic sanctions, China has been playing a long-term economic game. The result?

• China now controls critical infrastructure and supply chains worldwide.
• Western nations are waking up to the reality that China is now a dominant global force without military expansion.
• The U.S. is struggling to counter China’s economic influence because military solutions do not work against business deals.
  
  

Final Thoughts: A New Era of Power

The battle between the U.S. and China is not just about military power - it’s about economic dominance. For decades, the U.S. believed wars and military bases were enough to maintain global influence. China, on the other hand, took a smarter approach, using money, investments, and economic influence to control key assets worldwide.
The case of the Panama Canal is just one example of how China has outmaneuvered the West - not through force, but through strategic deal-making.

The question now is: Will the U.S. and Europe wake up before it’s too late?

At Vorpp Capital, we analyze global market trends, geopolitical shifts, and investment strategies to help traders and investors stay ahead.
As China and the U.S. battle for influence, understanding how economic power works is more important than ever. Stay informed, stay ahead, and make smart decisions.