Many people conceptualize national economic power in terms of national accounts, most of all GDP but also other measures like balance of payments and exports. The idea is that national accounts measure a nation-state’s command over resources, including the capacity to convert these resources into military power. Hence as Chinese GDP rises, so must Chinese power.

I argue that this view is wrong. While I agree that the richer, more productive, and more technologically advanced a nation is, the more economically powerful it is, national accounts do not adequately account for this in the age of globalization. The global nature of US-led capitalism since 1945, and especially since the 1990s, means that some states can extract vast resources from others.

The United States, for example, not only commands resources within its national territory (as measured by GDP) but also abroad via its transnational corporations (TNCs). On the flip side, in countries that have been the recipients of globalized American finance and production, especially China, their citizens and/or states do not have ownership over this foreign-driven activity, even if it contributes to their GDP.

Perhaps the clearest example is the iPhone. China is the world’s largest assembler and exporter of iPhones. This contributes to Chinese GDP. Yet the iPhone is not owned by any Chinese firm — it’s owned by Apple. It is Apple that profits by far the most, and these profits flow back predominantly to the United States. GDP tells us where the world’s production of goods and services is geographically concentrated, but in the age of globalization, it does not tell us who owns and therefore profits from it.

This contrasts sharply with the era before the 1990s. Japanese GDP was rising from the 1950s to the 1980s. It was safe to assume that so, too, was Japanese economic power, because Japanese corporations owned the vast majority of what they produced in Japan. This led to increasing Japanese profits that could be ploughed back into advancing Japanese technology and so on.

As production and finance globalized, however, we can no longer make this assumption. GDP could theoretically rise along with foreign ownership of that GDP, which is precisely what happened in China. Figure one shows us China’s Customs Statistics Yearbook data on what it calls “process with imported materials exports.” These are goods that are assembled in China with advanced components imported from other countries, such as iPhones and virtually all advanced technology exported from China (worth $809 billion in 2022).

Foreign firms (including their joint ventures) already accounted for over half of these Chinese exports by 1995. This then surged to over 80 percent where it has remained for the past fifteen years. At the same time, exports by Chinese state-owned enterprises have collapsed, while Chinese private firms have only recently increased their share to 20 percent. The nature of China’s integration into global capitalism as “foreign-owned workshop of the world” is thus very different from previous eras, when for example nearly 100 percent of Japanese exports were owned by Japanese TNCs in the 1970s.

Therefore, I argue that global profit share is a more appropriate measure of national economic power, as it encompasses the global profits stemming from production and finance owned abroad, not just within the home territory. In other words, we have to investigate the profit shares of the transnational corporations themselves in order to encompass their transnational operations.

This is what I have been doing for over ten years, focusing on the world’s top two thousand TNCs as ranked by the Forbes Global 2000. I aggregate twenty-five broad sectors, and in 2024 US-domiciled TNCs dominate in thirteen of them and lead in nineteen. Figure two reveals the degree of US dominance in these thirteen sectors, from more than double the share of its nearest competitor (Taiwan) in electronics to more than thirteen times larger than second-ranked China in computer hardware and software — in spite of the fact that China has been the world’s largest domestic market and exporter of computers for most of this century.

This represents extraordinary US corporate power at the pinnacle of global capitalism, and the picture has not changed much since my data starts two decades ago in 2005 (the United States also dominated in thirteen sectors then). China currently leads in four sectors (banking; construction; forestry, metals, and mining; telecommunications) while Japan leads in the remaining two (auto, truck, and parts; trading companies).

The fact that Western Europe and Japan have both relatively declined while China has surged to second place constitutes a sea change in twenty-first century global capitalism. The persistence of US economic power, however, indicates once again (as was the case in the 1980s when it came to Japan) that talk of “American decline” is wishful thinking.

There are various ways that the world dominance of American TNCs boosts American state power. The global dominance of Wall Street (financial services in figure two), for example, helps to ensure that the US dollar remains the de facto world currency.

The dominance of American tech firms helps to ensure the continued supremacy of the US military, while the dominance of American media helps to ensure that the US state can shape the ideological narrative (including support for US capitalism and imperialism). In general, the dominance of American TNCs ensures that the US state can leverage them in various ways as both carrot and stick against other capitalist powers.

The best recent example of how this dominance enhances US state power is the US tech war against China that began in 2019 under Donald Trump and really ramped up under Joe Biden. American firms have virtual monopolies in various crucial technologies, from smartphone operating systems to semiconductor design software, and the US state can pressure its allies whose TNCs also have crucial monopolies (like ASML from the Netherlands). This means the US state can severely constrict China’s continued global tech competitiveness in advanced semiconductors, artificial intelligence, supercomputing, etc.

Notably, Huawei was China’s most technologically advanced global competitor in the 2010s. Its smartphones were briefly world number one in the second quarter of 2020. After the US Department of Commerce placed Huawei on its “Entity List” in May 2019, embargoing US TNCs from doing business with them, they could no longer update their Google Android operating system nor access the most advanced semiconductors.

Huawei’s global market share in smartphones went from 20 percent in Q2 2020 to zero outside of China from 2021 to the present. Within China itself, Huawei’s smartphone market share peaked at 45 percent in Q2 2020 then collapsed to zero by Q1 2021 to Q2 2023, crawling back to fourth in China by Q3 2023 (Apple being number one). The United States can destroy the global prospects of one of China’s most competitive tech companies without China being able to do anything about it, demonstrating extraordinary American power.

Even more startling is what the Biden administration was doing from October 2022 onward. They banned American TNCs (and even US citizens and green card holders) from doing business or research in the advanced semiconductor industry in China. If the United States can successfully cut China off from the most advanced semiconductors, then this will have immense ripple effects for further advancement across all technology sectors in China.

While the example of DeepSeek has shown us that China can still be extraordinarily adaptable within these constraints, essentially developing a more efficient copy of ChatGPT using much less resources (and third-tier Nvidia chips), this is not the same as actually innovating in the field of artificial intelligence (AI). Moreover, scaling DeepSeek will still require huge computers powered by Nvidia chips that will likely face further US-imposed restrictions. Alphabet, Amazon, Meta, and Microsoft have an enormous structural advantage in this regard (with unrestricted access to the world’s most advanced chips). They announced more than $300 billion of AI investment for 2025 alone weeks after DeepSeek’s R1 release.

In this way, the US state can leverage the global dominance of US TNCs to contain the further technological rise of the country with the second-largest GDP in the world. This represents extraordinary power that the US state did not possess in its attempt to contain Soviet technological advancement from the 1950s onward, as the Soviets outcompeted the United States in various technologies (intercontinental ballistic missiles, rockets, satellites) for a couple of decades.

There are some, however, who will sidestep these issues because of what my late supervisor Leo Panitch described as “impoverished state theory.” Particularly since the explosion of globalization discourse during the 1990s, there has been a tendency for many people to think that the world’s top TNCs have been able to “escape” the nation-states in which they were historically domiciled, even becoming more powerful than states. This leads some to think that the very idea of national economic power is anachronistic in the age of globalization, and that global TNCs such as Apple, Toyota, or Volkswagen are not really “American,” “Japanese,” or “German” in any meaningful sense.

This conceptualization of globalization and TNCs is wrong. States always have more power than individual TNCs, even if many states choose to not use this power. A coalition of more than six hundred US companies and trade associations urged Trump not to impose tariffs on China, the big Wall Street players were very unhappy about the tariffs, and thousands of firms filed lawsuits against the Trump administration, including the likes of Ford and Coca-Cola. But even the most powerful corporations in the world must ultimately follow the diktats of the US government. If the nationality of TNCs no longer matters in the age of globalization, then companies that wanted to evade the restrictions on trade with China would just move their operations out of US territory — but they can’t.

In my research, I have mapped out the national ownership structures of the Forbes Global 2000. Globalization theorists assume that the world’s top TNCs have owners dispersed around the world, representing a “transnational capitalist class.” This is wrong. What we have actually seen is the globalization of American ownership of the world’s top corporations.

Not only do American capitalists still own a predominant share of US TNCs (on average 81 percent, based on ownership data from 2021), but they increasingly own more and more of TNCs based around the world. On average, American capitalists own 46 percent of the total outstanding shares of the world’s top five hundred TNCs (see figure three), even though only 35 percent of those TNCs are domiciled in the United States. The second-biggest national owner of the world’s top five hundred are Japanese capitalists with 6.6 percent ownership, even if Japanese firms account for 8.6 percent of the 500.

This increasing globalization of American ownership is true even of Chinese state-owned enterprises, with Americans owning 9.7 percent of the top fifty. Hence American capitalists own more of China’s top state-owned enterprises than the biggest foreign owner owns of the top fifty US TNCs (British ownership with 5.6 percent). Moreover, American capitalists also own 21 percent of the top fifty Japanese TNCs and astonishingly 34 percent of the top fifty European TNCs, more than triple the share of any single European nation.

In this way, the United States has structured global capitalism so that American capitalists still profit whether or not Apple (84 percent US-owned) can outcompete its archnemesis Samsung Electronics (29 percent US-owned vs 42 percent South Korean). This partly explains why 22 million of the world’s 58 million millionaires are American in 2023 (38 percent, significantly higher than the US share of world GDP at 26 percent), according to the 2024 Credit Suisse World Wealth Report — roughly similar to the US share of capitalist wealth in the 1950s.

I think it’s useful to distinguish between relational and structural power. When people see the flurry of news, like China brokering a deal between Iran and Saudi Arabia to diplomatically recognize each other again, or President Luiz Inácio Lula da Silva of Brazil saying that he wants to move away from the US dollar and trade with China in RMB, we are looking at the realm of relational power — of diplomatic relations and influence.

Things can fluctuate dramatically in this field over the short term. For example, President Rodrigo Duterte of the Philippines was more adversarial toward the United States and more open to China, while his successor, Bongbong Marcos, oversaw the largest joint military operations with the US in more than thirty years, just south of Taiwan. Argentina’s former president Alberto Fernández applied to join BRICS and talked about trading more in RMB, while the current Argentine leader, Javier Milei, canceled the BRICS application and promised greater dollarization.

Structural power, on the other hand, has deeper roots and takes longer to change. But it is also more abstract and therefore often overlooked. It is the power to shape the structures in which others exist and interact. My research involves trying to understand the ways in which the United States has structured global capitalism in such a way that benefits its ruling class and strengthens American hegemony.

From the point when Henry Luce published his manifesto The American Century in 1941, it took another forty years before his vision of American capitalism could become truly global, with the collapse of the Soviet Union and the capitalist integration of China. In fact, I would argue that the capitalist rise of China, along with other “emerging markets” in the twenty-first century, has actually boosted American structural power in certain key respects.

I have already mentioned the capacity of the US state to cut China off from advanced technology in a way that the US was not able to do to the Soviet Union during the Cold War, because of China’s dependent integration with the United States. Let me give another example: as long as countries are integrated into this form of global capitalism and want to drive their economic growth via exports (whether China, Japan, Germany, Saudi Arabia, and so on), then they are structurally bound to give the US free money.

That is because the US has ensured that its currency remains the de facto world transactions currency. As central banks around the world accumulate US dollars from their nation’s exporters, these central banks must park their cash in the world’s safe-haven asset, the US Treasury Bill, thereby continuously pumping free dollars into the United States.

Countries such as France in the 1960s and Brazil and China during the 2008–09 global financial crisis have complained about this US “exorbitant privilege.” Yet after more than half a century of such complaints, they still have no alternative if they wish to participate in global capitalism. fifteen years after the great crash, the Chinese RMB still barely competes with the Canadian dollar for international currency reserves.

The United States doesn’t need to tell China to buy T-bills. China simply has no choice because of the way the United States has structured the global financial system — for example, through the sale of Middle East oil in US dollars, backed by US military power in the region — and the continued dominance of Wall Street, which has a 63 percent profit share in the 2024 Forbes Global 2000, compared to  just 4.2 percent for Chinese financial services. To put it another way: so long as China wants to integrate into global capitalism, which remains US-centered, then the Chinese state has no choice but to help fund US imperialism against China itself.

In terms of the US trade and tech war on China, Biden doubled down on Trump’s previous course, and Trump will now double down on Biden’s. The main difference is that Biden toned down the rhetoric and protectionist policies against allies, while Trump is promising to expand the trade war against allies again (as he did in his first term). Trump is also likely to be more adversarial toward NATO, without being serious about leaving the alliance altogether — he just wants its other members to buy more US weapons systems.

Whether or not Trump’s more aggressive tactics against US allies discourages them from aligning with the US “small yard, high fence” tech blockade against China, I think these allies are pretty locked in to treating China as a systemic rival. For many European elites, China is now associated with Russia, and there doesn’t seem to be any reconciliation on the cards in the foreseeable future.

For much of East Asia, tensions with China over the East and South China Seas, and of course across the Taiwan Straits, will likely continue to simmer and occasionally flare up. In such a scenario of heightened tension, capitalist elites throughout Eurasia will still prefer US hegemony to defend their global interests rather than the Communist Party of China. This holds true no matter how much Trump rails against “globalism” — his administration is still stacked with neocons who basically believe in a more muscular liberal internationalism.