Yan Xuetong on the World to 2035: Hegemony and Its Challengers

A Review of Yan Xuetong's book of forecasts, Inflection of History (December 2025)

Travel note: Jacob is in New York and DC this week. Do get in touch if you would like to meet, exchange views, or simply say hello.

The World To 2035: Executive Summary

1. US–China bipolarity will become firmly entrenched. The US will maintain an overall lead, dominating cyberspace, services and international influence, whilst China will dominate the physical economy, manufacturing and military scale.

2. Middle powers, including the EU and India, will reject ideological camps in favour of pragmatic, “issue-based alignment” [问题性结盟], navigating between the two superpower ecosystems.

3. Fuelled by populism, trade protectionism and the normalisation of “might makes right”, the current “counter-globalisation order” [逆全球化秩序] will reach its peak during the second Trump administration.

4. By 2035, prolonged political fragmentation and widespread popular dissatisfaction with almost two decades of counter-globalisation will generate global demand for a new international order grounded in basic moral principles.

5. AI-driven excess production and entrenched protectionism will fracture global markets, pushing states towards “club-style” coordination and cause a long-term shift away from the dollar towards gold and other currencies.

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6. Cyberspace will supersede physical territory as the primary geopolitical arena, stratifying the globe into three tiers: intelligent technology standard-setters (the US and China), innovators and AI application economies.

7. The mutual estrangement of the US and Chinese R&D sectors will result in two distinct global digital standards and market spheres, while also reflecting a pattern of “homogenised development” [同质性发展] as the US increasingly mimics Chinese industrial policy.

8. The growing lethality of intelligent weapons, combined with nuclear deterrence, will constrain major powers to cyber operations. Yet the lower immediate lethality of such operations may increase the frequency of unmanned cyberattacks and conflict.

9. China should transition its diplomatic focus to cyberspace, encouraging enterprises to “go out” [走出去] via a “produce locally, consume locally” [当地生产当地消费] model to bypass protectionism and internationalise its tech standards.

10. To secure its global standing and achieve “high-quality opening up” [高水平对外开放], China must actively mitigate domestic populist currents and attract foreign research talent through institutional reform.

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Yan Xuetong resists easy categorisation. Though a self-identifying “typical nationalist”, he accepts universal values and does not challenge the legitimacy of the liberal order from a normative standpoint. He strongly believes in the scientific empiricism of international relations and is dismissive of the vogue for creating a distinctly Chinese “knowledge system”. At the same time, he is explicit that his national identity shapes his intellectual purpose, stating in 2005: “The research of American scholars is mainly concerned with the means of stabilising hegemony—in fact, many Chinese scholars also conduct research on hegemony from this point of view. I lead my PhD students in researching how hegemony declines, and how it is replaced.”

Despite his early conviction that China’s rise would reorder the international hierarchy, Yan rejects attempts to ground that rise in a uniquely Chinese moral worldview. He is equally sceptical of using terms like “multipolar order” to construct a narrative of opposition to the liberal international order, since this does not accord with his empirical observation of global bipolarity. He has linked similar politically useful concepts to the “doublespeak” [假话] he remembers being forced to articulate as a sent-down youth. This intellectual honesty is also what makes him worth listening to. But it also lays bare a tension between the nationalist and the universalist within him, a tension that runs through Inflection of History, his recent work of forecasts and policy recommendations.

The values of the hegemon—and those of its challengers

Forecasting sits at the core of Yan’s empiricism, and indeed many of his earlier predictions—the decline of liberal norms, the resilience of the nation state as opposed to supranational organisations and the dominance of Sino–US bipolarity over multipolarity—have been borne out by events. However, although Yan’s forecasting is anchored in a realist outlook, moral norms remain central. From the philosopher Xunzi, he derives the broadly applicable idea that when a hegemon largely abides by the rules it sets for the international system (the “humane way”), its system will be more resilient than one in which it habitually breaks those rules (simply, “hegemony”) or disregards them altogether (naked “power”).

Yan’s normative recommendations in Inertia of History (2013), his forecast for the world until 2023, were shaped by the contemporary debate over whether China should keep adapting to the largely US-shaped international order or move towards a more deliberate rupture. Renmin University professor Di Dongsheng was an early advocate of “de-Americanisation”, arguing that China’s dependence on an American-centred global system would constrain its rise. By contrast, a mainstream view, reflected in institutions such as the Shanghai Institutes for International Studies (SIIS), held that China had benefited substantially from the existing order and should seek greater voice, rule-making power and institutional influence within it, rather than “setting up a separate stove” [另起炉灶].

Yan did not belong neatly to either camp. He shared the scepticism that China could continue rising indefinitely within a US-centred order, rejecting adaptation to the liberal international order because of the tension it would create between China’s illiberal domestic governance and its external posture. Yet he did not advocate rupture. He also held that China needed greater international responsibility and rule-making authority, and warned that an amoral focus on economic development would eventually produce unsustainable trade tensions. His answer was “moral realism” [道义现实主义]: a way for China to assume greater global responsibility without accepting the domestic-political inconveniences of liberalism.

This was a tricky intellectual balancing act to pull off. The main difficulty arose in consistently distinguishing his “moral realist” prescription from liberalism itself. Yan’s 2013 policy advice often rested on tacitly liberal assumptions. Judging that China’s complete abstention from liberal-led military interventions would harm its internationalist credentials, he suggested that China define the scope of a movement away from “non-interventionism”, and projected that abandoning non-alignment would be a necessary corollary to China’s rise.

In the recent Inflection of History, Yan acknowledges China’s failure to move in this direction as one of his predictive misses. Perhaps consequently, the self-confident blueprint he once offered for how China might exercise greater international agency is more muted. The driving historical “inertia” he invoked a decade ago is now phrased as “entropy”: the natural decay of systems in the absence of active leadership. Rather than outlining a clear moral purpose for China on the world stage, his new book portrays international tensions as a struggle between the liberal defenders of the established order and the populist detractors who would tear it down.

However, Yan’s use of “liberalism vs. populism” to explain global tensions raises an awkward question about where China stands: if it has adopted policies that weaken the liberal order, do these also fall under his category of “populism”? The problem is not merely semantic. Among the tendencies Yan classifies as populist are “using sovereignty to negate human rights”, invoking “economic security” to justify protectionism and statist overreach, and “the emergence of state behaviour disregarding human rights both domestically and internationally”. He also identifies “domestic populist trends” as a major obstacle to China’s rise, including the protectionist impulse to shield “national industries” from imports, excessive anxiety over technological leakage, and the traditionalist desire to defend national culture against “foreign invasion” and immigration.

If Yan is prepared to concede that China has displayed some of these “populist” tendencies, he is more reluctant to spell out how far China’s own rise and behaviour have contributed to the weakening of the liberal international order. Several of the trends he criticises—from the securitisation of economic policy to the idea that sovereign states may reinterpret international human-rights norms according to their own political circumstances—are not incidental to China’s recent foreign-policy posture. They have been among the main ways in which China has contested the liberal order over the past decade.

Had his “moral realist” approach been adopted in 2013, international politics over the last decade might have been less adversarial, but the challenge to the established order would also have been less clear. Yan does not, however, articulate this, and his use of internal “entropy” to explain liberalism’s decline renders China’s position ambivalent: lodged, like the jade stone in Dream of the Red Chamber, within a world of collapsing certainties, yet never quite belonging to its moral order.

A “moral realist” prescription for China until 2035

In Inflection of History, Yan’s prescription for the next decade is more cautious and couched in official language: “high-standard opening up”, the “Four Global Initiatives”, and “openness amidst counter-globalisation”. Rather than securing overseas interests through formal alliances, he proposes a subtler interventionism based on military cooperation and joint exercises. These may seem bland, and they certainly lack the chutzpah of his earlier calls to move beyond non-alignment and non-interventionism, but that is largely the point. With liberalism weakened by internal populism, China need not force a premature contest for leadership. In a recent interview, he emphasised that it should avoid falling into a ruinous “leadership trap”: taking on global responsibilities before it has the material strength, international trust or domestic attractiveness to sustain them.

Yan’s roadmap is thus less a programme for remaking the world than a strategy for waiting out its disorder. He expects Sino–US bipolarity to endure, populism to push states towards security-first policies and economic stagnation, and middle powers to hedge issue by issue rather than align ideologically with either side. He recommends that China play down ideology, resist domestic populism, improve the appeal of its society through internal reform, and expand its digital standards through international infrastructure. US retrenchment may increase China’s weight in multilateral institutions, but the payoff will be delayed. Only after a decade of populist disruption, Yan suggests, might global demand for multilateralism return — leaving China better positioned to influence its revival.

The Scholar

Name: Yan Xuetong (阎学通)
Date of birth: 7 December 1952 (age: 73)
Position: Professor and Honorary Dean, Institute of International Relations, Tsinghua University.
Previously: Researcher at China Institutes of Contemporary International Relations (CICIR) from 1982-1984 and 1992-2000.
Research focus: International relations
Education: BA in English, Heilongjiang University (1982); MA University of International Relations (1986); PhD in Political Science, University of California, Berkeley (1992)
For a more detailed overview of Yan’s career, interests, and publications, see here.

INFLECTION OF HISTORY: INTERNATIONAL CONFIGURATION AND ORDER (2025—2035)
Yan Xuetong (阎学通)
Published by CITIC Press in December 2025
(Illustration by Gemini)
What follows is a detailed summary of Yan’s core forecasts for the world to 2035.

I. Geopolitical Balance

• US–China bipolarity is set to stabilise and talk of multipolarity will cease. The capability gap between the two powers will narrow relative to 2025, though the US will maintain an overall lead.

• By 2035, US GDP is projected to exceed $35 trillion, while China’s will approach $29 trillion, assuming average annual growth of around 4%.

• Chinese dominance will be concentrated in the physical economy — manufacturing, goods exports, infrastructure, and military scale — while US dominance will persist in cyberspace, services (financial and legal frameworks), nuclear deterrence, overseas bases and online influence (given the dominance of the English language).

• Middle-power influence will be restricted to regional affairs, with states hedging between superpower ecosystems in a pattern of “issue-based alignment” [问题性结盟] rather than ideological camps.

• European security reliance on the US will decline as NATO loses its exclusivity. France and Germany will advance strategic autonomy, and China may support this. However, given its political complexity, the EU will fall short of superpower status and remain a hedger, while its aggregate GDP is likely to fall below China’s.

• The UK will retain strategic dependence on the US (nuclear, digital standards and cybersecurity) but will experience historically low levels of bilateral intimacy, moving closer to the EU and softening tensions with China.

• India’s GDP could reach $7 trillion (requiring ~6% annual growth), exceeding Germany and Japan but without closing the gap with the US and China. It will hedge between China and the US on digital standards, maintaining “politically cold, economically warm” [政冷经热] relations with China.

• Japan will likewise maintain “politically cold, economically warm” relations with China, but, compared with India, will align more strongly with the US on security and digital standards while increasing military cooperation with Europe.

• US–Russia relations will improve, though continued EU sanctions, technological dependence on China, and overlapping strategic interests will leave Moscow aligned with China.

• Among Global South countries, Brazil will be the largest developing economy to align decisively with China, as its regional leadership aspirations collide with renewed US emphasis on neighbourhood security. However, the broader pattern among developing countries will be varied.

II. Institutional Order

• Over the next decade, global competition will be defined by the populism–liberalism divide, within a broader “counter-globalisation order”:

  Yan: “Today, the “populist view of economic security” [民粹主义的经济安全观] and the values of “might makes right” [强权即公理] have gained traction. Driven by these values, trade protectionism and actions that use sovereignty to negate human rights [以主权否定人权] are on the rise. This has led to the fragmentation of the global market, alongside the emergence of government behaviour that disregards human rights at both the international and domestic levels [漠视人权的政府行为在国际和国内两个层面兴起]. Major powers are increasingly strengthening their economic security policies, making counter-globalisation in the economic sphere [经济逆全球化] the prevailing trend.”

• The demonstration effect of US populism and its alliance with Israel will undermine US moral legitimacy, alliance cohesion, and its appeal as a political model.

• Liberalism will decline, but populism will not settle into a permanent international order. Following historical precedents in which international orders mature over approximately a decade, the current “counter-globalisation order” (dated from 2017) is projected to reach its peak during Trump’s second term.

  Yan: “The historical experience of international relations since the 20th century shows that every new international order takes approximately a decade to develop from its initial state to its peak; once it reaches this peak, the duration it endures varies considerably […] In 2017, the ‘counter-globalisation order’ was launched with the UK initiating the process of leaving the EU and Trump coming to power. Based on historical precedent, this counter-globalisation order should reach its peak during Trump’s second term.”

• Driven by pragmatism, the US will increasingly imitate China’s governance toolkit (e.g., industrial policy), resulting in “homogenised development” [同质性发展] and reducing the attractiveness of the US system.

• Multilateral institutions will become less effective due to populist obstruction and US withdrawal. Although US absence will increase China’s weight in multilateral institutions and financial infrastructure, the lack of consolidated global norms will produce rule-making paralysis.

• US pressure may push states to “huddle for warmth” [抱团取暖] by joining US-excluding or China-led groupings (such as BRICS and the SCO), but these will suffer from a lack of internal unity.

• In the long term, prolonged domestic political decay and international polarisation will generate global demand for an order grounded in moral legitimacy.

  Yan: “Countries that participated in the post-Cold War globalisation process are now all in a situation where their domestic societies are integrated into the international community. Consequently, the current regressive trend [倒退趋势] in international politics will inevitably affect domestic politics and render political fragmentation or decay a widespread phenomenon. If this situation persists for another decade up until 2035, people may develop a strong feeling of dissatisfaction with the counter-globalisation order [逆全球化秩序] that will have persisted for almost 20 years, perhaps similar to the social discontent that two decades of globalisation first triggered. People may [as such] call for the establishment of an international order equipped with basic moral principles [基本道义的国际秩序].”

• By 2035, the importance of ideological distinctions, such as democracy versus authoritarianism, will fade, and the appeal of concepts such as “the West” will be significantly weaker as intra-Western divisions outweigh divisions between the West and other groups.

• Meanwhile, perceived US moral deficits may open space for the eventual adoption of Chinese moral concepts in the global order, though these remain somewhat undefined.

III. Economic Order

• Excess production will be exacerbated globally by protectionism and advances in artificial intelligence, especially in AI-exposed services such as law, finance, and media, but also across commodities, cars, chips and weapons.

• This will fuel a vicious cycle in which economic stagnation intensifies trade barriers. During Trump’s second term, China’s excess production will be used as a rationale for protectionist measures against China by other countries.

  Yan: “Trade wars have weakened the growth of global trade, which may further intensify global overcapacity [全球产能过剩] and bring more serious unemployment problems in its wake. Humanity’s productive capacity has already exceeded its own capacity to consume. In international trade, overcapacity is widespread across bulk commodities and major traded goods, including oil, grain, minerals, aircraft, automobiles, chips, weapons and livestock products. Overcapacity in the service sector is also very serious, including in financial services, legal services, film and television, video games and media. In the absence of cooperative mechanisms for global governance, numerous countries could adopt policies to protect their domestic markets, further restricting the growth of international trade. This has the potential to cause the collapse of many export-oriented enterprises, worsening unemployment.”

• As such, markets will be larger but more fragmented by 2035. High-tech supply chains and commodity production will increasingly rely on capability-based “club-style” coordination to ensure economic security and circumvent sanctions.

• In the longer term, sustained US-driven “counter-globalisation” will likely drive other states towards increased economic cooperation with China, potentially resulting in EU–China bilateral trade exceeding EU–US trade.

• Fear of financial crisis and dollar sanctions will spur intermittent panic buying of gold and diversification into the euro and RMB.

IV. Digital and Technological Order

• Cyberspace will supersede physical territory as the core geopolitical arena, in line with the growing amount of time people spend online.

• The US and China will transition to digital-economy-dominant structures, with the digital economy contributing more than 50% of their respective GDPs and together accounting for over half of the global digital economy.

• The mutual estrangement of US and Chinese R&D sectors will generate two distinct global standards systems and digital market spheres. Most countries will hedge rather than fully align with either superpower on digital standards and trade.

• Global stratification will be determined by AI integration, dividing states into “AI-ised” and “non-AI-ised” tiers. A three-level hierarchy will emerge:

  1) Intelligent technology standard-setting economies (US and China).

  2) Intelligent technology innovators (UK, Germany, Japan etc.).

  3) AI application economies (consumer markets).

• US and Chinese dominance in cyberspace will become a core driver of a return to multilateralism. As middle powers find themselves beholden to the standard-setting and pricing power of the two superpowers, they may call for stronger multilateral mechanisms to boost their own influence.

V. International Security and Conflict

• Nuclear deterrence and the increasing lethality of intelligent weapons will disincentivise outright war between major powers. This will increase the propensity for limited cyber military action, producing a pattern of “more conflicts, but limited escalation into large wars” [军事冲突较多，但升级为大规模战争的不多].

• To reduce casualties, high-tech states will seek to confine conflict to cyberspace, while low-tech states continue to engage in physical wars. Cyberattacks will likely become more frequent, while the US and China will set norms to prevent spillover from cyberspace into the physical world.

• Due to their centrality in intelligent technology, the US and China will establish a “bilateral-first” [双边为主，多边为辅] approach to cyberspace norm-setting, managing risk bilaterally while setting global standards for other countries.

• To provide security backing for transnational economic projects, China should compensate for its lack of formal allies by broadening military cooperation through training, information sharing, joint exercises and similar mechanisms:

  Yan: “Since military-security cooperation forms the foundation of strategic relations between states, responding to the pressures of counter-globalisation [逆全球化] will also involve expanding military opening-up [军事对外开放]. Developing military cooperation with more countries, especially peripheral states, would be beneficial for China’s strategic relations with other states and thereby provide security guarantees for economic cooperation [为经济合作提供安全保障]. Such military opening-up could begin with widening the range of arms-sales partners, before extending into personnel training, information cooperation and joint military exercises. This would also help compensate for China’s weakness in lacking military allies [有助于弥补我国缺少军事盟友的弱点].”

• During the period up to 2035, Europe, the Middle East and Africa will remain the most severe conflict zones:

  • Why Europe? First, a durable peace in Ukraine is structurally impossible in the near term, and tensions between Russia and its neighbours in Eastern Europe will continue to worsen; second, Europe still contains a plethora of unresolved border issues; and third, numerous separatist movements create potential flashpoints.

• East Asia will remain peaceful due to US–China strategic balance and increased caution among US allies in response to reduced US security investment.

• North America will also remain peaceful as it becomes clear to the US that digital sovereignty is strategically more important than territorial expansion, and talk of US territorial expansion proves to be a fad.

VI. China’s Optimal Strategy

• Shift China’s diplomatic focus from physical geography to cyberspace, prioritising integration with neighbouring countries in the digital and AI sectors over traditional infrastructure.

• Accelerate outward investment and the trend of Chinese enterprises “going out” [走出去] through a “produce locally, consume locally” [当地生产当地消费] model, bypassing protectionism and internationalising Chinese technological standards.

• Counter populism by resisting pressure to play on cultural and ideological divides. Define partnerships strictly according to complementary national interests in order to build the broadest possible “united front” [统一阵线].

• Mitigate domestic populist trends — including xenophobia, economic protectionism and fear of technological leakage — that threaten opening up through education and “public opinion work” [舆论工作].

  Yan: “As populism spreads globally, our country also needs to guard against the rampant spread of domestic populist currents [国内的民粹主义思潮]. Populist forces in any country resist opening up to the outside world, and their rationale for this resistance is always the maintenance of security. Currently, common rationales include: preventing “foreign cultural invasion” [外族文化入侵], “toadying up to foreigners” [崇洋媚外], imported goods from dominating the domestic market, technology leaks, foreigners stealing jobs, and needing to protect national industry—among others. All these rationales will hinder opening up; internally, they hinder our society’s developmental progress, and externally, they damage our country’s expansion of international influence. In order to achieve the goal of “high-quality opening up” [高质量对外开放], it is paramount to consider how to reduce the social breeding ground [社会土壤] for populism through education and public opinion work [舆论工作].”

• Attract top-tier talent by providing an environment that guarantees research autonomy and minimises administrative constraints, rather than focusing only on grants and funding.

• Respond to “counter-globalisation” through “unilateral opening up”: expand market access to non-hostile nations, relax foreign exchange controls, guarantee the safety of investments and encourage the cross-border movement of people.

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