U.S.-China Relations for the 2030s: Toward a Realistic Scenario for Coexistence

Preface

As an undergraduate at Stanford University, Morton Abramowitz––who would later become the seventh president of the Carnegie Endowment––thought the world was far too oblivious to China’s future. It was the early 1950s, and China was hardly a global power. It was a large and poor country: its annual gross domestic product per capita was less than $60, generated by a stagnant and state-controlled economy relatively isolated from global trade.¹ But Abramowitz thought in decades rather than years, envisioning a China that “would eventually loom large in world affairs.”² Four decades later, Carnegie issued a report titled China: Can We Have a Policy? in which Abramowitz observed that “what we see is a rapidly changing China that gives us cause for both optimism and concern.”³

Since his report, China kept growing its economy and power, rising to unprecedented heights in world affairs. Its economy has grown almost twentyfold to become the world’s second largest, just behind the United States.⁴ It is a global leader in manufacturing, technology, and science. Its influence spans the globe, from Asia and Africa to the Middle East and Latin America. Adapting to this reality is likely to remain an enormous challenge for American statecraft for decades to come.

Washington and Beijing are now competing in virtually every domain of global power. Yet their competition and differing goals do not eliminate the possibility of certain convergent interests. Indeed, the two countries and the rest of the world may benefit from a measure of cooperation on issues of core importance at this moment in history: from managing the climate crisis to developing norms to govern artificial intelligence, to reducing nuclear risks, to preventing the next global pandemic. Most of all the United States and China owe it to their peoples and the world to avoid a catastrophic war. How they manage their relationship over the next decade will be of enormous consequence for the future of humanity.

This new project from Carnegie has taken on the ambitious task of finding a path forward, asking “How might China and America come to coexist peacefully?” It does this with an eye to the troubled reality of the moment we are in, but also a deep concern for the consequences of failing to imagine a more stable future.

Carnegie has a long legacy of supporting international cooperation during times of great tension and uncertainty. After the Second World War, former Carnegie president James T. Shotwell helped draft the United Nations Charter. During the Cold War, Carnegie experts laid the groundwork for nuclear nonproliferation, a cornerstone to détente between the United States and the Soviet Union. This compilation follows that tradition of forging realistic paths for diplomats on the most difficult challenges, and in the most difficult of circumstances.

As members of a vibrant policy community determined to address the world’s most pressing challenges, it is our responsibility to imagine what’s possible while remaining realistic about what’s attainable. U.S. and Chinese national interests will often diverge, and we should be clear sighted and vigilant about these differences. But the path to a world more aligned with America’s needs also compels us to be open to cooperation where our interests converge. A pragmatic approach that resists both starry-eyed optimism and bleak skepticism will therefore be needed. In the following chapters, experts use their practical imagination, grounded in evidence, to take seriously the prescient challenge Morton Abramowitz posed and reiterated decades ago and to envision a more constructive and promising future for U.S.-China relations in the 2030s.

I thank the American Statecraft Program and Christopher S. Chivvis for his leadership and contributions to this compilation. I also extend my gratitude to the contributing authors: Evan S. Medeiros, Stephen M. Walt, John Culver, Rosemary Foot, C. Fred Bergsten, Edoardo Campanella, Meg Rithmire, M. Taylor Fravel, Eric Heginbotham, George Perkovich, Audrye Wong, and Stephen Wertheim. 

Mariano-Florentino (Tino) Cuéllar
President

Carnegie Endowment for International Peace
October 2024

Introduction 

Christopher S. Chivvis

The tensions marking the U.S.-China relationship have generated a pessimistic, sometimes dire, vision for its future. Hostility has reached a level that makes war thinkable and perhaps even likely within the next decade. It has become difficult to imagine how Washington and Beijing might turn their relationship, which is so crucial to the future of world order, toward calmer waters. If there is to be any hope of doing so, however, policy experts need some realistic vision of what those calmer waters might look like. This volume provides such a vision. The chapters collectively sketch a scenario for U.S.-China relations that is realistic and more positive than many on offer in Washington today. In it, America and China are less hostile toward one another and manage their competitive relationship predictably and without recourse to open conflict.

During the Cold War, the United States and the Soviet Union found a path toward calmer waters in the 1970s, thanks to the efforts of then president Richard Nixon and his national security advisor, Henry Kissinger. Their policy of détente did not bring the superpower confrontation to an end, but it did stabilize a dangerous relationship and set the stage for the peaceful resolution of the Cold War in the following decade. This volume does not outline a specific path toward détente with China, and different authors have different views on the prospects for such an outcome. But together these chapters sketch what a successful effort to relax tensions might realistically aim to achieve.

It is important to note upfront that this volume does not aim to predict the future. Instead, the aim is to sketch a possible version of the future. Whether the United States and China will successfully repair their relationship and slow the trend toward greater conflict cannot be known today. The bilateral relationship is passing through a particularly dangerous phase and it is likely to remain competitive if not adversarial for decades to come. There is a real possibility that conflict will get worse, as many of the authors in this volume note.

But as historians know, the future is never set in stone, and if we are to develop strategies that steer us toward more positive futures, we need some understanding of what these futures might look like. In the initial chapter, I lay out an overview of the broad contours of such a future, bringing together ideas from several other chapters and adding additional material that is the product of my own reflection on the subject. 

In the second chapter, Evan Medeiros explains the full range of possible scenarios that might develop and the critical factors that will drive the relationship toward one scenario or another. His analysis moves from the fundamental assertion that “the future of the U.S.-China relationship is as consequential as it is uncertain.” His scenarios range from a global condominium to a war.

The past is not always a good predictor of the future, as Stephen Walt explains in his survey of what the major theories of international relations teach us about the future of the U.S.-China relationship. Policymakers err when they make predictions based on a single moment in time, Walt writes, “because states define and defend their interests differently as their relative power changes and as internal and external circumstances evolve.” As his chapter makes clear, this does not mean we should expect peace to endure—far from it—but that policies grounded in defensive realism and economic liberalism are most likely to sustain it.

John Culver’s chapter identifies what it would take for Washington and Beijing to constrain their competition and “stop racing toward the bottom”—in other words, what it will take to move toward a more stable, managed competition constrained by mutually agreed rules and norms. A key part of getting there is that both countries recognize that the existential fears that so often inform their respective strategies are “at least partially imagined” and that a less confrontational approach is feasible and compatible with their security and interests.

Rosemary Foot outlines how Washington and Beijing might get to a similar point through a reformulated approach to major problems of world order. She argues that a less confrontational, or at least more stable, global relationship is possible. It will require strengthening channels of communication, accepting the reality of a shared fate, and building from current “islands of consensus” about major international legal and normative questions—among other steps.

Geopolitical rivalry between the America and China is often thought to make mutually profitable economic exchange impossible in the future, but Fred Bergsten argues that this need not be the case. His chapter sketches a future in which each continues to try to maximize its alliances and power while both continue to enjoy economic interdependence. In this scenario, the “two superpowers will learn to live with each other, with continuing tensions but without hostile interactions.”

The role that monetary relations will play in the future of the relationship is easily misunderstood. The United States has for decades enjoyed the extraordinary privilege of the dollar’s unchallenged role as the world’s premier global reserve currency, but China has talked about replacing the dollar with the renminbi. In their chapter, Edoardo Campanella and Meg Rithmire argue that the United States can afford to be more sanguine about this possibility than many assume. Not only would the rise of the renminbi as a global reserve currency require that China undertake economic reforms that are very desirable from a U.S. perspective, but a more balanced global monetary system might also decrease tension and conflict.

The military dimension is perhaps the most vexing part of the relationship, especially given China’s pretensions to dominate East Asia militarily and the issue of Taiwan. During the Cold War, a rough military balance that was recognized by both sides was a precursor to superpower détente. The same will be difficult to achieve in East Asia. Taylor Fravel and Eric Heginbotham sketch basic parameters for this to happen in their chapter. The key will be for the United States to maintain forward deployments for deterrence but in a posture of defense-dominance—“forward-deployed U.S. forces that are resilient with capabilities primarily oriented toward defeating attacks rather than launching offensives.”

China is poised to substantially increase the size and capabilities of its nuclear forces, and this greatly complicates the global strategic environment. George Perkovich pinpoints the steps that the two countries need to take to get to a more stable situation in which they are “engaged in sustained bilateral talks, with subgroups on nuclear and missile risk-reduction measures, giving substance to these topics.”

Conceptual frameworks and narratives—in China, America, and around the world—will also shape the future of the relationship. As Audrye Wong explains in her chapter, Beijing has pushed global narratives that tend to heighten tensions rather than alleviate them. These narratives often take the form of propaganda or disinformation. They have sometimes fallen flat or backfired, but the United States should still be wary of them, encourage China to adopt a less provocative approach in its global messaging, and insist that Beijing refrain from efforts to interfere in U.S. domestic politics.

In his chapter on U.S. narratives about China, Stephen Wertheim sketches three possible frameworks for U.S. policy, including competitive coexistence, strategic competition, and Cold War-style containment. “Given the mutual interests and economic and ecological interdependence that bind the two powers,” he writes, “it might seem logical that Washington would alight upon competitive coexistence after a period of adjustment to a stronger and more assertive China.” But nothing is guaranteed. America may prove more comfortable with the familiar mental map of the Cold War.

The United States and China have a joint interest in finding a modus vivendi that provides the context for continued peace, prosperity, and national flourishing. America’s allies around the world share this interest and can support it. There are no guarantees that either country will muster the restraint and discipline needed to steer their relationship in this direction—far from it— but this is not impossible and it would be dangerous not to try. Having a realistic picture of what it might look like is the first step in this direction.

Notes

The list of frictions in the relationship between the United States and China is long and growing. Beijing is threatening Taiwan with its military maneuvering, has declared a no-limits partnership with Russia, has pursued a far-reaching conventional and nuclear arms buildup, and is using its coercive economic tools against U.S. allies and partners. The rule of the Chinese Communist Party has meanwhile grown more personalized under President Xi Jinping, which makes its foreign policy less predictable in some regards. The United States has responded with far-reaching economic measures aimed at countering China, measures that deny China access to advanced U.S. technologies, provocative visits by congressional leaders to Taiwan, a diplomatic initiative to strengthen U.S. alliances in Asia, and an arms buildup of its own. The consensus that once surrounded a strategy of deep engagement with China has collapsed, and one of the few policy issues that Democrats and Republicans agree on is being much tougher on China. Most recent strategic thinking about China has, accordingly, advocated a more aggressive U.S. approach, with a strong coercive military element and ideological dimension.¹

These trends can make it difficult to envision what a more stable and predictable relationship between China and America might look like. But doing so is extremely important. History teaches us that nations will take steps to protect themselves when they believe that conflict and war are likely or unavoidable, and that these steps often increase the chances of the conflict they seek to avoid—sometimes creating a self-fulfilling prophecy. Today, U.S.-China relations are following this pattern, reducing incentives for cooperation and creating spiral dynamics.²

But there are still multiple scenarios for the future of U.S.-China relations, including ones that are realistic and attainable, and in which the two countries find a stable modus vivendi for coexistence and manage their frictions and conflicts without sliding into a major power war. This possibility is the subject of this volume, and this chapter sketches what such a scenario might look like between today and the mid-2030s economically, militarily, and when it comes to world order: 

• Economically, the United States and China might be at rough parity, but a modus vivendi would still be possible. Although it would be preferable if trade and investment levels between the two powers remained robust, it is more important that political friction over trade and investment is reduced. Some degree of technological decoupling is unavoidable, but this could reach its limits by the next decade, reducing the tensions it has recently caused.
• A rough military balance in East Asia would provide a foundation for strategic coexistence. This new strategic reality would open the possibility of nuclear arms control. China would not, however, have developed the capability to challenge the United States’ military power globally, even as its global reach increases.
• Tensions between the United States and China over the shape of the twenty-first century world order would continue but would be reduced, and collaboration in some areas would be beginning. In a best-case outcome, Beijing and Washington would cooperate on global challenges where they share interests, such as climate, artificial intelligence norms, and global health.

The scenario involves a core geopolitical bargain in which the United States accepts China’s continued growth and development but works to balance its regional hegemony and receives reassurance from Beijing that it can be content without global preeminence. For its part, China shows that it does not seek to replace U.S. hegemony with a hegemony of its own, and that it can be satisfied with something approximating equality in East Asia combined with a greater global role—or at least recognizes that this is preferable to gambling on a war or trying to undercut the United States virtually everywhere. In this scenario, China is not intensifying efforts to change the territorial status quo in Taiwan by force, even though it is certain to retain its claim to the island and not to renounce the use of force altogether. Both sides meanwhile compete economically to maximize their national wealth, but they do so in a way that does not intentionally damage the other. Protective “scaffolding” in the form of military crisis-management procedures, arms control, and cooperation on at least some key issues of global governance helps to stabilize the relationship.

To be sure, this scenario will require changes on both sides, and these might never materialize. Trust is seriously lacking between Beijing and Washington, and this makes it much more difficult to pursue policies that move in the more positive direction of this scenario. Leaders in either nation might also just reject this scenario as too limiting of their national ambition and hope to achieve more, no matter the risks. China might be unwilling to make credible commitments to global restraint. The United States might be unwilling to accept any global role for China whatsoever. But the scenario should still be appealing today because it represents a realistic equilibrium, one that allows both sides to flourish in the context of a reduced risk of great power war.

The chapter begins with a brief overview of détente between the United States and the Soviet Union during the Cold War. That historical episode sets a useful precedent for what might be achievable between the United States and China in the next decade. Then, the chapter considers the economic, military, and world order aspects of a potential U.S.-China modus vivendi.

The Cold War Precedent

 The détente period of the Cold War began in the late 1960s at a time when the enormous costs and risks of superpower war had become clear. This clarity was in part due to the fact that the Soviet Union had reached nuclear parity with the United States. The prospect of continuing the nuclear arms race looked costly and dangerous, especially in the wake of the Cuban Missile Crisis, which had almost ended in a history-altering nuclear war. American policymakers recognized that a cooling down in superpower relations was badly needed—and also desired by many Americans, who were weary from the war in Vietnam and the strain of the nuclear age. Then president Richard Nixon and national security adviser Henry Kissinger disliked the fact that West Germany, a key ally, had itself begun pursuing a cooling off with Moscow through its Ostpolitik. They hoped that détente would restore America to the driver’s seat in East-West relations and thwart Moscow’s emerging divide-and-conquer approach to western Europe. They also hoped (vainly) that Moscow could help deliver a ceasefire in Vietnam. For its part, Moscow shared Washington’s desire to reduce costs and concerns about nuclear war, and it also viewed détente as a chance to gain legitimacy and prestige.³

A key factor that facilitated the emergence of détente was the reality that the geographical lines of superpower confrontation in Europe had become static, despite East-West hostility and the continued risk of nuclear war. Although a political conservative, Nixon had come to view the Soviet Union as a status quo power rather than the anti-capitalist revolutionary power that it professed—and many believed it—to be. This made negotiation with the Kremlin possible. As Nixon wrote in a letter to his defense secretary Melvin Laird, “We must recognize that the Soviet Union has interests; in the present circumstances we cannot but take account of them in defining our own. We should leave the Soviet leadership in no doubt that we expect them to adopt a similar approach toward us.”⁴ For Soviet leaders, it was now possible to negotiate with the United States as an equal, thanks to the progress they had made in building up their country’s nuclear arsenal.

Kissinger said that Nixon’s statecraft also aimed to “improve the possibilities of accommodations” with Moscow while increasing Washington’s diplomatic room for maneuver.⁵ Specifically, the aim was to reduce conflicts with the Soviets in marginal areas and create alternatives to conflict in the most important ones. Nixon thus announced in his inaugural address in 1969 that his would be an “era of negotiation.”⁶ The two sides then agreed to a set of “Basic Principles” that would guide their relationship and eventually signed landmark arms control agreements on missile defenses and nuclear weapons, as well as novel trade agreements that allowed Soviet grain to flow into the United States.

Some scholars discount the relevance of détente to U.S.-China relations today. They argue that Nixon and Kissinger’s efforts did not resolve the conflict with the Soviet Union once and for all. To be sure, American statecraft in this era was imperfect and impermanent. It is undeniable that U.S.-Soviet relations deteriorated when Soviet troops invaded Afghanistan during Jimmy Carter’s presidency, and even more early in Ronald Reagan’s. But to dismiss détente in this way is a superficial historical analysis. What Nixon and Kissinger set in motion was important not only in itself, but also to later efforts that helped bring about the end of the Cold War. It also reduced the threat of war throughout the 1970s.

Nixon and Kissinger’s statecraft has been fairly criticized on many fronts for its duplicity and sometimes blatant disregard for human rights, but the efforts that the United States made in these years to stabilize relations with the Soviet Union and thus lower the risk of superpower war were a real contribution to the well-being of the world. It is worth noting that by making the 1975 Helsinki Accords possible, détente also made possible a shared commitment to basic human rights on a global scale.

Key features that facilitated détente in these years included some level of domestic political support on both sides, a joint recognition that the potential for future gains through military means are limited, and an acknowledgment of a mutual interest in reducing the risk of war and the costs of constantly preparing for it. Whether such conditions will emerge in the next decade between the United States and China is uncertain. A major challenge that stands out between the détente period and the present is that whereas Washington and Moscow basically agreed about what constituted the status-quo in Europe by the late 1960s, the United States and China fundamentally disagree over what constitutes the status-quo in East Asia, and this is a significant obstacle.

U.S.-Soviet détente should nevertheless not be viewed as a strict roadmap for what détente between the United States and China must look like. A relaxation of tensions in U.S.-China relations might mirror U.S.-Soviet experience in some ways but is sure to have its own unique drivers. At a minimum, the détente of the 1970s is a reminder of the potential for positive change even in the most conflict-prone superpower relations.

Economic Relations

U.S.-China economic relations can be divided into three areas: first, relative economic scale, which is the most relevant for global geopolitics and is determined primarily by the overall size of each nation’s economy and its growth trajectory; second, the degree of economic interdependence between the two economies, especially through trade and investment; and third, the technology relationship, which has become increasingly challenging in recent years due in particular to the prevalence of dual use technologies.

Relative Economic Scale

One of the main reasons China has caused so much anxiety in Washington in the last decade is its surging economic heft and future potential. This growth has stoked fear in the hearts of many Americans—not just for economic but also for geopolitical reasons. Economic strength is a key determinant of national power in world politics, and if China were to greatly surpass the United States in national economic power, it could gain the resources for a realistic bid to impose its hegemony on the world.⁷ Were this to occur, a modus vivendi would be nearly impossible to achieve and the chances of hegemonic war between the United States and China would vastly increase.⁸ Fortunately, earlier forecasts that China was bound to greatly surpass the United States in economic power now look off the mark. It is of course difficult to make economic predictions for ten or twenty years into the future, but since the economic crisis caused by COVID-19, it seems more likely that the United States and China will be at rough economic parity for the foreseeable future. China will remain a major challenger to the United States, but it is far from certain that it will surpass the United States in economic power. This parity should make a modus vivendi less problematic than it might have been if China seemed on track to continue its previous high levels of economic growth through the 2030s and 2040s.

China’s economy has recovered from the sharp slowdown that it experienced as a consequence of COVID-19 and Xi’s response to it, but as of 2024, it still faces significant near and medium-term headwinds. These include a real-estate sector that is badly in debt, slowing productivity growth, an ongoing trade war with the United States that could expand to Europe, and a declining population. China’s Belt and Road Initiative once sat at the center of Beijing’s bid to extend its economic influence across Eurasia and globally, but it appears to have diminished in ambition as China’s partners have grown more skeptical and Beijing has felt the financial strain of its lavish spending.⁹ Xi remains focused on making China the world’s industrial superpower, but this will be difficult if Beijing cannot scale up domestic demand or convince the rest of the world to buy its high-end industrial exports on a large scale.¹⁰ Increases in domestic demand are possible, but necessary reforms are a long way off and it is unclear whether Xi will pursue them. Meanwhile, Xi’s continued emphasis on high-end manufacturing for export is creating a backlash against Chinese exports in many wealthy countries, as evidenced by recent U.S. and European tariffs on Chinese electric vehicles. In these conditions, the export-oriented model that sped China along the path toward economic success for decades will not produce the impressive levels of growth that China enjoyed in the past.¹¹

Most economists therefore predict that China’s average GDP growth will fall to a rate between two and five percent over the next two decades. The IMF, for example, forecasts that China’s economic output will gradually decline from five percent growth in 2024 to a little more than three percent in 2029.¹² At these levels, China would probably surpass the United States by 2050, but only marginally—its GDP would be only 15 percent larger, for instance.¹³ This would not be a very substantial lead, especially when the demands of China’s much larger population and likely technological lag are taken into account.¹⁴ If China grows more slowly than forecasted, it will not surpass the United States at all unless U.S. growth also badly stalls.¹⁵ Only in the unlikely scenario where U.S. growth remains very low and China’s growth is very high would China’s GDP surpass U.S. GDP much sooner than 2050.¹⁶

As a result, China’s prospects for amassing so much economic power that it can supplant America’s role in the world seem dimmer than they did a decade ago.¹⁷ More likely, the United States and China will continue to have roughly equal weight in the world economy at least in the next decade and very possibly well beyond that. The fact that China is unlikely to outshine America economically should, however, both diminish U.S. anxieties and cool unrealistic Chinese hopes that a new global dominion will emerge for Beijing. This does not, of course, mean that China’s economic power will recede, or that that frictions and challenges between China and the United States will go away. China will still be a rough economic peer to America, one that can and will confront American primacy for decades to come.¹⁸

 The Trade and Investment Relationship

The U.S.-China trade and investment relationship has become more and more fraught over the last decade now. It is poised to get even more contentious as long as Xi continues to dump China’s advanced industrial exports onto world markets. But it is nevertheless too soon to write off the possibility of continuing a mutually beneficial economic relationship. Even if the two economies decouple to a significant degree, this would not preclude a stable political relationship or cooperation on global public goods.

Washington has been critical of China’s protectionism, intellectual property practices, and state subsidies to key export industries for giving China unfair advantages and damaging U.S. prosperity. Xi’s “Made in China 2025” plan for massive industrial expansion, which was first announced in 2015,¹⁹ could still generate further protectionism in the United States and other major economies. The risk that U.S. capital investment in advanced manufacturing sectors in China furthers the People’s Liberation Army (PLA)’s acquisition of militarily-relevant advanced technology could also reduce momentum for economic integration.

But China’s illiberal economic practices and U.S. protectionism will not necessarily make decoupling inevitable. There is a scenario in which the trade frictions of recent years dwindle by the 2030s, and the U.S.-China trade war stabilizes. In this case, the level of bilateral trade would probably still be significant. Today, even with the higher tariffs imposed under Presidents Donald Trump and Joe Biden, bilateral trade remains important to both economies: the United States exported $154 billion in goods to China in 2022, making the country its third-largest export market for goods that year.²⁰ U.S. investment remained high, with an annual average of $10 billion in outward flows of FDI between 2019 and 2022.²¹

Both China and the United States have an interest in preserving much of their economic relationship. China needs the markets of the United States and U.S. allies to sustain consistent growth. Maintaining significant levels of U.S.-China economic exchange is also conducive to military restraint. As long as Beijing sees its economic future as linked to access to the U.S. economy and the economies of U.S. allies, it will be more reluctant to risk a sharp break, for example by invading or imposing a military blockade on Taiwan. And the United States, for its part, has more than a purely economic interest in maintaining some level of economic interdependence with China, even if this is not a guarantee against conflict.²²

If the trade and investment relationship dwindles substantially, a modus vivendi would be less likely but not foreclosed. Just as economic interdependence does not guarantee peace, it is not a requirement for peaceful coexistence. For example, the U.S.-Soviet relationship moved toward greater levels of economic exchange as part of détente, but their overall level of economic interdependence was far below that of the United States and China today.

 The Technology Relationship

Competition over advanced technology is sure to remain an area of friction between the United States and China for years due to the impact of artificial intelligence, advanced biotechnology, quantum computing, and other technologies on national economic and military power. But technological competition need not become all-consuming. Frictions over sharing technology also could diminish as time passes and the United States and China settle into a new normal in which both sides accept that technology limitations are natural.

The Biden administration has introduced major export and investment restrictions aimed at limiting China’s access to U.S. technology. These primarily target advanced semiconductors that could be used for artificial intelligence or specialized military applications.²³ The United States has promised to keep the number of highly restricted technologies very limited, but pressure to include limitations on more technologies is growing. As it does, China’s claims that the United States is aiming to undercut its economic growth will become more intense and credible, and reprisals from Beijing will be more likely.²⁴

This trend notwithstanding, it is not unusual for a nation to seek to protect its advanced technologies, especially in critical areas and for legitimate security interests. The United States employed export restrictions throughout the Cold War and post-Cold War era, after all. It often does not even share its most advanced technologies with close allies. Beijing should be able to accept this reality without viewing it as an unnatural or unfair assault on China’s national growth.

At the same time, U.S. restrictions are likely to decelerate over time as they reach the limits of their effectiveness. After all, the United States cannot entirely cut off China’s access to technology with such measures; it can only delay China’s acquisition of similar technologies. Technological knowledge lies on top of a foundation of scientific research, and China’s native research capabilities have grown substantially in the last decade—especially in applied fields relevant to economic growth and military capabilities.²⁵ The marginal gain to U.S. security of new restrictions will therefore decrease over time as China increases its own capacity. Additional U.S. restrictions will naturally address technological areas decreasingly vital to national security and economic growth, such that the United States may reach a point at which additional restrictions no longer make sense. Those already in place are likely to remain, but the pace at which new ones are introduced is likely to decline over the next decade, reducing the bilateral friction that this has created in the last few years.

The Military Balance

The military balance between the United States and China will play a critical part in any coexistence scenario. It can be analyzed at three levels: the global military balance, the military balance in East Asia, and the nuclear-strategic balance.

The Global Military Balance

China has considerably expanded its military power over the last two decades, but the threat this poses to the U.S. global military footprint should not be exaggerated. Its navy has and will continue to have more ships than the United States does.²⁶ The gap appears likely to grow; whereas the U.S. fleet will remain at around 290 ships for the next decade, China’s is expected to grow from 370 to 435 ships.²⁷ As many naval experts have noted, however, the size of a fleet is not an accurate measure of its overall capability—the U.S. fleet is not only larger in tonnage (U.S. ships are heavier) but also widely regarded as more capable.²⁸ Moreover, most of China’s fleet is concentrated in East Asia, so its size is more relevant to China’s power in that region than to the potential for Chinese global military power.

China’s efforts to secure naval basing around the world have also led many in Washington to fear that China will soon threaten America’s longstanding primacy on the high seas. There are good strategic reasons for Washington to monitor China’s basing, but its significance for Beijing’s global military posture can often be overstated. Currently, China has built only one military base outside Asia in Djibouti. It is seeking to establish more bases, primarily in the Indian Ocean, where it hopes to protect its access to energy from the Middle East, upon which it is dependent.²⁹ It is true that the PLA Navy benefits from China’s global network of commercial ports for some of its logistics, but this network does not provide anywhere near the same level of capability that a network of military bases would.³⁰

Intent is also not capability. For China to expand basing at a level that would create a truly global navy with combat capability that could rival America’s would be extremely difficult and take decades. Building a reliable global infrastructure for naval logistics, let alone for an army or air force, requires a long-term and persistent effort, very favorable political conditions, and good luck.³¹ Britain built its global presence over more than a century, while America did so in large part as the consequence of victory in the Second World War, which was a uniquely propitious historical moment.

China’s navy may therefore be growing, but in a decade China will still have nothing comparable to the global military footprint the United States has acquired over the last seventy-five years, and which includes hundreds of thousands of ground forces deployed in dozens of countries, massive airpower in three major overseas regions, unprecedented naval basing rights and infrastructure, and far-reaching diplomatic and political supporting arrangements.

China’s navy could pose a threat to the United States’ capacity to operate around the world as freely as it does now, but only if it chooses to act in certain costly ways. For example, if China’s fleet behaves as it has behaved in the South China Sea and harasses and pressures other states globally, this would be a serious problem, even if it did not result in direct conflict with the United States. If Beijing wants to be seen as a constructive force for the global commons, it has an interest in using its global naval presence more benignly.

Chinese emplacements or deployments that open the United States to direct conventional attack would obviously create a new situation to which Washington would be forced to respond. These are imaginable if, for example, China makes significant inroads in Latin America. But this is less likely than is sometimes portrayed because the nations of the Western Hemisphere are highly susceptible to U.S. pressure should they venture too far down the path of close security ties to China. The tiny steps that some have made in this direction should not be uncritically extrapolated as straight-line projections into the future.

The Military Balance in East Asia

Finding a stable military balance in East Asia is the most difficult challenge for the United States and China in finding an overall modus vivendi for their relationship. During the Cold War, a rough nuclear and conventional military balance between East and West had emerged by the mid-1960s. With both sides bristling with arms, it was clear that neither had much to gain from starting a war. Flashpoints were stabilized through fortifications like the Berlin Wall. This balance helped to stabilize Europe and lay the ground for détente in the 1970s. An analogous balance will be very difficult to achieve in East Asia in the next several years, but it is possible the situation may be more balanced by the 2030s than it is today.

To begin with, it is hard to imagine differences over territorial issues around China, especially over Taiwan and the South and East China Seas, improving much. Unlike during the Cold War, there is no underlying agreement between the United States and China about what constitutes the status quo in the first place when it comes to Taiwan. Washington views the status quo primarily in territorial terms whereas China views it primarily in political terms. Beijing believes the political status quo on Taiwan is changing with U.S. encouragement such that the island’s permanent separation from the mainland is becoming more likely. In contrast, the prevailing view in Washington is that Beijing is threatening to change the territorial status quo through military force. This is hugely problematic and will take serious diplomacy and restraint on both sides to change.

It was at one time possible, at least theoretically, to envision a scenario in which the standoff over Taiwan would be resolved through the United States accommodating China’s desire for reunification through some kind of a grand bargain.³² Such a policy has no political support today, however, and pursuing it could end up emboldening China’s leadership into a more aggressive foreign policy elsewhere.

Deterrence that creates military parity must therefore be the basis of stability and a modus vivendi. By the mid-2030s, this is likely to be the reality. There are plenty of ways in which the United States or China could get the military balance in East Asia wrong and thus end up at war, but it is likely that military parity will be more clear in a decade than it is today. Enhanced U.S. military deployments in East Asia—such as the addition of the B-21 stealth bomber, more nuclear-powered attack submarines, more long-range missile stocks, enhanced command and control networks, dispersion, hardening of bases and key infrastructure, and other measures that the United States is putting in place—should help create a more stable balance. This balance will be reinforced by the enhanced capabilities of key allies such as Australia and Japan, and the implementation of a more effective national defense strategy by Taiwan.

It is also possible that by the mid-2030s, military crisis-management arrangements will be established that reduce the risk of accidental escalation. Granted, China has sometimes been reticent about establishing such procedures because it viewed instability as favorable to its regional aims. China’s record on this front is not encouraging. Whereas Washington’s experience of the Cold War inclines it positively toward such measures, Beijing has no such history to inform its military culture. Nevertheless, if the next decade sees an increase in military incidents—for example due to growing militarization of East Asia—this could encourage a more constructive approach from Beijing. Its agreement to reinvigorate communication channels at the Biden-Xi summit in November 2023 was a step in the right direction however, and with luck could result in functional crisis mechanisms by the mid-2030s.

In debates over political military strategy, it can be too easy to disregard the importance of reassuring adversaries. Nevertheless, adversaries must know that restraint on their part will be rewarded. Just as the United States fears emboldening Beijing through restraint, Beijing fears that restraint on its part emboldens Washington to encourage Taiwan to move to a permanent state of independence from the mainland, which would be unacceptable for Beijing. Washington can avoid, or at least reduce this perception, with a redoubled effort to reassure China that it does not support unilateral Taiwanese moves toward independence and does not seek to keep Taiwan permanently detached from the mainland. Doing so would reduce Beijing’s incentive to take military action against the island and mitigate its tendency to view U.S. policy through a worst-case lens. This might involve Washington taking greater care to avoid statements and actions that imply U.S. support for or openness to Taiwan’s independence or permanent self-rule, while reinforcing the U.S. commitment to its One China policy—or even returning to the past practice of publicly criticizing Taiwan if it shows signs of moving toward independence.³³

 The Nuclear-Strategic Balance

When it comes to the growth of China’s military power, one development that many in Washington find especially disturbing is China’s plan to build a nuclear force of 1,500 operational nuclear warheads by 2035.³⁴ This plan is clearly problematic from the standpoint of global nonproliferation. It will also make deterrence across the Taiwan Strait more challenging if China concludes that its large nuclear arsenal will give it more latitude for conventional military operations against Taiwan. At the same time, however, looking to the 2030s, China’s buildup could offer a silver lining. With a much larger nuclear force, China should have more confidence in the security of its second-strike capability (assuming the United States has not radically changed its own nuclear or nuclear-relevant conventional capabilities). Mutual vulnerability would thus be a reality, and Beijing is bound to see a greater benefit in strategic arms talks under these conditions.

Such talks might focus on numerical targets, but they might also be construed more broadly to include, for example, developing off-ramps and communication channels for managing a crisis, or other measures that reduce the likelihood of war.³⁵ Talks of this kind would also generally add scaffolding to the relationship, as they once did for the United States and the Soviet Union in the 1970s under Nixon and the 1980s under Reagan.

If stability will inevitably require a measure of deterrence, it is also possible that by the mid-2030s, the arms race might be slowed simply because both sides see an interest in reducing costs. During the Cold War, the financial strains created by the conventional and nuclear arms buildup provided the foundation for arms-control agreements, which in turn helped to stabilize relations between the superpowers. Similar dynamics are easily imaginable between the United States and China.

 World Order

 A final area of major contestation between the United States and China consists of the rules, norms, and institutions that shape world order. Beijing has called for major reforms to the existing structures of global governance, and U.S. leaders have often warned that such reforms challenge or threaten the current world order altogether.³⁶ In the system that China aspires to create, economic and social development is paramount, democracy and human rights take a back seat, Washington’s power in international organizations and the world economy is reduced, and its global alliances are weakened. This is a challenge to the United States for several reasons, but it does not add up to a bid to replace the U.S.-led order with a China-led order. It should be manageable if the U.S. pursues the right mix of diplomacy and openness to reforms.

China has articulated its long-standing preferences in recent years through three initiatives: the Global Development Initiative, Global Security Initiative, and Global Civilization Initiative. Its Global Development Initiative emphasizes its preference for economic development without political preconditions, Global Civilization Initiative attempts to make the case for a pluralistic world order in which different interpretations of human rights and democracy coexist, and its Global Security Initiative claims a preference for negotiation over the use of force in resolving international disputes. The Global Security Initiative also has a component that involves the export of police training and surveillance technologies that strengthen internal security, including for non-democratic regimes.³⁷ In this regard, as well as in its critique of “blocs” as elements of world order, the Global Security Initiative reflects China’s fear that it is surrounded by a powerful system of U.S.-led democratic alliances that evince varying degrees of hostility to the rule of the Chinese Communist Party.

China’s proposals for an alternative world order thus reflect the real differences between itself and the United States in terms of values and interests, but they need to be taken seriously because they have the support of many nations that are poised to play an important role in the future of world order, including India, Indonesia, Brazil, South Africa, and Turkey. In part, they appeal to these emerging powers because Beijing promises benefits in the form of technology, financing, and trade for those who support its initiatives, but China’s initiatives also speak to longstanding concerns about the inequities in the existing world order that many emerging powers share.³⁸

China is not, however, about to replace the U.S.-led world order with one of its own, both because it does not necessarily seek to do so and because it would face serious obstacles if it were to try. It has sufficient power to criticize and complicate the U.S.-led order, but not enough to impose a comprehensive alternative vision of one—even if it can make inroads for its preferences in certain functional areas. Emerging powers support some of China’s initiatives partly because they reflect shared criticism of the existing system, not because they represent their preferred blueprints for future reforms. It also does not help Beijing’s case that it does not adhere to some of the principles that it proclaims, for example when it comes to the South China Seas. Meanwhile, Beijing’s attack on “bloc politics,” which clearly suits its interest in weakening Washington’s alliances, may be attractive to some emerging powers that aim to increase their power and influence in the international system, but not to America’s many allies who enjoy membership in these “blocs.” Nor has Beijing demonstrated that it can provide global public goods and resolve difficult problems of global governance such as mitigating climate change and preventing pandemics. Although China has made efforts to negotiate agreements between Iran and Saudi Arabia, Russia and Ukraine, and Israel and Hamas, the results have been lackluster.

Moreover, the differences between China and the United States on questions of global order can sometimes be exaggerated. After all, Beijing does not appear to seek, and there is no reason to believe that it seeks, to overturn the current international order and replace it with something radically different in all domains.³⁹ Its objections to the current system of global governance are primarily about reducing U.S. structural power in that system and altering norms so that it can escape pressure to democratize and respect human rights. These are significant challenges to America but do not represent all-encompassing, non-negotiable differences with it.

With time and the right approach, the United States could defuse and mitigate the challenge that China is posing to the existing world order. This will require co-opting some of Beijing’s proposals into a program for reforming world order that also aligns with basic U.S. interests. It also requires providing emerging powers with alternatives to the financial and technological benefits they seek from China. Such an approach would demonstrate openness to strengthening the voice of large countries such as Brazil, India, and Indonesia in global institutions. It would probably also require a recognition that America’s emphasis on democracy as a foundation of world order does not always further its efforts to build a global coalition supporting the other rules and norms that it would like to see preserved, such as respect for Article 2 of the United Nations Charter and nonaggression in general.⁴⁰ An emphasis on good governance and other U.S. priorities that are less controversial among emerging powers is compatible with such an approach.⁴¹

Meanwhile, provided that they maintain robust diplomatic channels, it should also be possible for the United States and China to find ways to cooperate on major challenges of global governance, such as articulating norms for the use of artificial intelligence, managing and mitigating climate change, and strengthening global health response mechanisms. Cooperation on these issues would not only be good in itself; if effective and performed in good faith, such cooperation would also strengthen coexistence by providing scaffolding for it.

Conclusion

Moving toward the more stable U.S.-China relationship sketched above will be hard. There are no permanent solutions to the risks inherent in the relationship today. Nevertheless, without some vision of what a realistically better situation might look like, and some sense that it is achievable, it will be even more difficult for policymakers to steer a course around the many risks and pitfalls that lie ahead. Some of these are dire. America has many interests in the world, but one of the most vital is avoiding a war with China. China would almost certainly collapse under the strain of a war, but the United States and indeed world history would likely be greatly altered by the suffering a great power war would create. There are no guarantees that either side will muster the restraint and discipline needed to steer the relationship wisely, even if both desire to do so. But more improbable things have happened, including in U.S.-China relations, and it would be dangerous to rule it out.

Notes

The future of the U.S.-China relationship is as consequential as it is uncertain. As the two largest economies in the world and two nuclear powers with multiple arenas of competition, this relationship is rapidly becoming the pacesetter for geopolitics in the twenty-first century. Yet, its trajectory and the implications for global order remain very open questions. Perhaps most vexing is the fact that many future pathways are possible.

Seldom, if ever, in modern international relations have two countries that are so deeply interdependent—economically, technologically, and ecologically—also been involved in an intensifying and broad competition covering security, economics, technology, and ideology. The multiple and competing demands of their complex interdependence and of security polarization will have a defining impact on the trajectory of their ties. How these forces will net out is exceptionally challenging to predict with certainty. The stark and accumulating differences between the American and Chinese political systems and worldviews, amid shifting material capabilities, substantially complicate assessments of the future. 

This chapter seeks to jump into the fray by presenting five scenarios for the evolution of the U.S.-China relationship. Many analysts, using straight projections of current trends, see the future of the relationship as endlessly and inevitably fraught. This paper puts aside such deterministic pessimism by exploring “positive but realistic futures.” The scenarios do not exclude the possibility of more dire outcomes, but they also explore the conditions that could produce a relationship in which competition and confrontation do not prevail at every moment and in every context.

Beginning by outlining the variables that will influence the trajectory of the U.S.-China relationship, the chapter then sets out the five scenarios. Each shows a distinct future, with a focus on its attributes and requirements as well as the pathways to it. These scenarios are ideal types meant to provoke discussion and they are not mutually exclusive.

Variables Influencing U.S.-China Futures

There are seven broad variables that will shape the trajectory of the U.S.-China relationship, each influencing the degree to which ties become driven by cooperative or competitive dynamics as well as the scope and intensity of both. 

• Sources of Competition: Today, the United States and China compete in four main arenas: security, economics, technology, and ideas. The influence of each on their relationship will likely vary over time, but the dominance of one arena—or two—over others would have a substantial, perhaps defining, influence on the future. For example, the Cold War was principally an ideological and, secondarily, a military competition between the United States and the Soviet Union. The order and respective intensity of the drivers of competition will have a defining impact on the future of U.S.-China relations.
• Channels of Communication: The degree to and way in which U.S. and Chinese officials talk to one another about the most pressing issues will shape the relationship’s future. Currently, such communication is often treated by both sides as more of a risk or vulnerability than as a strategic necessity. The use of effective communication channels or even confidence-building measures to manage competition will be a key determinant of future interactions and the ability to manage competition.
•  Bilateral Cooperation: The type and quality of cooperation—let alone the mere existence of it—is an important factor that will influence any possible future. Cooperation can have a dampening effect on perceptions and policies on both sides. At a minimum, it can reduce the prevalence of worst-case assessments. At best, it can create a sense of common interest that mitigates distrust.
•  Sources of Ballast and Stability: Over the past forty years, the U.S.-China relationship has enjoyed several sources of ballast and stability, including the support of top policymakers, business leaders, politicians, and civil society. At different times and to differing degrees, these factors have provided ballast to ties during difficult periods, but many of them have now faded away, become dormant, or changed their orientation. Their relative presence or absence will shape of the evolution of the relationship.
•  Domestic Politics: The scope and outcomes of debates among U.S. and Chinese policymakers will be one of the most important factors shaping the relationship. During the Cold War, there was a remarkable consensus across U.S. politics and society supporting containment of the Soviet Union, at least outside the foreign policy elite. There is no such agreement today on China policy, and U.S. policymakers and business leaders are only beginning to debate the costs and risks of different strategies. Will a consensus emerge in the United States? How would a lack of consensus affect future ties? In China, by contrast, there is a strong agreement among Chinese Communist Party (CCP) elite that they are locked in a long-term geopolitical and ideological competition with Western powers, led by the United States.
•  U.S. Allies and Partners: As the United States’ relationship with China evolves, the views of its key allies and partners will matter more. Washington needs its allies’ and partners’ policies to align, to some degree, with its own to have any hope of effectively competing with Beijing. However, U.S. allies and partners in Asia and Europe are often not fully synched with Washington or with each other. Thus, these partners can enable or constrain U.S. actions. Some allies and partners can have the salutary effect of encouraging more dialogue and cooperation, as they did in the lead up to the November 2023 U.S.-China summit. Others, such as Taiwan and the Philippines, can have the practical effect of pulling the United States into situations that strain ties with China. Thus, the disposition of these allies and partners, as well as China’s perceptions of their relative alignment with Washington, will affect future ties.
•  Geopolitical Context: The distribution of power in the international system, the nature of alignment among power centers (e.g., Russia and Europe), and the character of the global economy will weigh heavily on the U.S.-China relationship. These and other factors could be an accelerant of competition and conflict, but the realities of complex interdependence could also moderate confrontational strategies on both sides.

Five Scenarios

Scenario 1: A U.S.-China Condominium

This scenario represents the most positive outcome for the U.S.-China relationship. It envisions broad convergence, rather than full alignment, in economic and security interests and in worldviews. In it, the United States and China actively work together on a variety of regional and global challenges, to substantial positive effect for many countries. They drive global growth and set the terms of trade, investment, and technology development. The U.S. dollar and the renminbi (RMB) are the dominant currencies. 

This is not simply a bipolar world, but one in which U.S. and Chinese actions define the terms of global politics and economics. Washington and Beijing are the principal reference point for most countries and are looked to for leadership on all manner of problems. The United States and China are active in new frontiers—space exploration, the Arctic, artificial intelligence—in ways that open opportunities for most other countries. In short, there is not just a bilateral condominium, but other countries perceive the U.S.-China relationship as delivering for them, legitimizing this concentration of power in the hands of two large countries. 

Identifying the requirements of this scenario involves creative thinking. In it, the greatest sources of bilateral competition (such as Taiwan and ideological differences) are largely muted, and U.S. and Chinese leaders have created mechanisms for effectively managing remaining differences. Political and ideological differences are no longer salient, facilitating a similarity in worldviews. The two economies become more complementary than competitive, and fears of vulnerability diminish. The risk of military conflict recedes, and most tensions arise around economic issues and burden sharing in global problem solving. The main tension in the relationship stems from latent identities: China’s as a supporter of the interests of developing countries and the United States’ association with the interests of developed ones.

Imagining the pathways to this scenario is difficult to do as it requires not only drastic changes in China’s security frontier—solving the Taiwan issue—but also a dramatic evolution in its political system, values, and perceptions.

Scenario 2: U.S.-China Détente

This scenario reflects more modest ambitions than the prior one. It envisions a détente defined by the United States and China settling into a predictable and stable pattern of interactions including a mix of competition and cooperation. The nature of the relationship is much like it is today: competition across the arenas of security, economics, technology and ideology. However, within that structure, détente has the following attributes. Security competition is effectively bounded by mechanisms ranging from consistent communication and crisis management to confidence-building measures and arms control. The economic and technology relationships remain competitive, especially in certain sectors, but are restrained and managed through bilateral consultation mechanisms that both sides are invested in. The United States and China see substantial shared interests in working together to keep global markets open and to share technologies unrelated to national security. The two still jockey for diplomatic advantage globally, while cooperating on common regional and global problems. Collectively, these dynamics have the practical effect of moderating security dilemma dynamics by diminishing the influence of worst-case assessments on both sides. The breadth and depth of this cooperation becomes an essential counterpart to their bounded competition and in sustaining détente. The specter of conflict is present but does not loom large, based on the shared desire to privilege stability and prosperity over competition and absolute gains. Nuclear weapons never become a dangerous and destabilizing feature of the military competition.

There are two main requirements for this scenario to emerge. The first is recognition by U.S. and Chinese policymakers that the progressive deterioration of the relationship is dangerous and needs to be addressed. They realize that left unattended, it would drift toward militarized confrontation and potentially war. The second is an acceptance on both sides that some strategic restraint is in their interests, and, accordingly, both sides invest in a variety of mechanisms that can achieve this. A third requirement for fostering détente would be the emergence of a domestic political consensus in both countries supporting détente. This will be a substantial challenge for Washington and Beijing to create and sustain for the foreseeable future.¹

Regarding pathways, the central question is what sparks the required recognition by U.S. and Chinese policymakers. There would need to be an event, or series of events, that changes their calculations about their capabilities and ambitions. This could involve a bilateral crisis that “shocks the conscience” on both sides, as the Cuban missile crisis did during the Cold War. This could involve a domestic crisis in either country that incentivizes it to seek greater stability. Or this could involve a leadership change that results in a new set of policymakers’ preferences.

Scenario 3: Muddling Through with Strategic Competition

This scenario involves the continuation of the current status quo with no end in sight, and with only little improvement or deterioration in the U.S.-China relationship. There is a deeply liminal quality to this state of bilateral affairs: there are no major changes for the better or for the worse.

In this scenario, the relationship is defined by constant tensions in every aspect, especially disagreements about Taiwan, maritime disputes, and respective defense modernization. The bilateral economic relationship becomes more securitized as both sides see economic exchange as highly competitive and creating vulnerabilities. Technology policy becomes more focused on national security risks, and trade and investment controls grow. Both “the yard” and “the fence” of export controls and investment restrictions expand in an interactive dynamic. Economic derisking and technology decoupling become common and continuous. Diverging visions of domestic and global governance increase mistrust in all aspects of the relationship. A competition of ideas and values becomes a common feature of U.S.-China global interactions. Diplomatic dialogue and communication occur in fits and starts, with no apparent or productive pattern. Both sides are wary of talking but resort to it when all else fails. Bilateral, regional, and global cooperation is very limited in scope and time. Emerging issues in global affairs immediately get treated as arenas of competition. To the extent there is a domestic consensus on either side, it is to view the other as an adversary and interdependence as an uncomfortable legacy that needs to be minimized, if not eliminated. Washington and Beijing do just enough, often at the last minute, to prevent strategic competition from morphing into rivalry and confrontation.

The requirements and pathways for this scenario are quite basic: accumulating distrust, political inertia, gradual accretion of capabilities, limited diplomatic interactions, and minimal leadership role in managing relations. This scenario results from the lack of a strategic modus vivendi—a vision for managing competition—as well as the lack of domestic political consensus supporting stable and productive bilateral ties. This scenario also requires implicit or explicit constraints on the ambitions or capabilities of either country, which tempers the scope and manifestations of various arenas of competition. These conditions collectively produce the muddling through effect. A final requirement is luck, in that security competition never produces an accident or a miscalculation that leads to escalation.

Scenario 4: Slow Burn Toward Rivalry

This scenario differs in degree rather than in type from the “muddling through” one. It too involves wide-ranging competition, growing mistrust, limited communication and cooperation, and diminishing societal contact between the United States and China, all amid the fragmentation of global economic and security affairs. The scenario has several unique attributes as well. Defense and security competition dominate the relationship, as both sides accelerate their military build-up. The conventional arms race over Taiwan and the South China Sea gets worse as the U.S. and Chinese militaries operate with greater capabilities and in closer proximity to one another. The risk of major accident or miscalculation is constant as both sides engage in progressively riskier behavior. Nuclear competition moves to the forefront of the relationship and the two countries expand and modernize their arsenals, with increased risk of nuclear use.

As the security competition intensifies, the pressures for economic and technological disengagement grow. Duplicate supply chains emerge in critical technologies and technology competition starts spreading to sectors, like clean energy, that have indirect national security implications. A prime attribute of this scenario involves the intensification of ideological competition. Deftly using dis/misinformation, China promotes its political values and especially President Xi Jinping’s vision of global order, first stated in a 2017 UN speech, for a “community of common destiny for mankind (renlei mingyun gongtongti).” U.S. reactions to Chinese values and visions foster a sense of struggle between the two political systems, with many arguing it is existential.   

The requirements and pathways for this scenario are myriad. A major requirement is a gradual expansion of capabilities and ambitions of both sides, which intensifies competition. A second is closer linkage between global geopolitics and U.S.-China competition. A fracturing of global order into competing groupings accentuates the divergence in U.S. and Chinese interests and perceptions. A third requirement is the predominance of various domestic political forces in both countries’ policymaking. These foster distrust in a manner that shrinks space for the contact, communication, and cooperation necessary for managing differences. The traditional sources of ballast and stability diminish as the actors promoting competition and confrontation gain importance. Leaders in both countries use competition as a source of political legitimacy and advantage, propelling even more confrontational policies. In terms of pathways, it is the combination of the consistent influence of global events, such as the war in Ukraine, and of growing domestic political pressures in both countries that fosters the perceptions and policies that create the conditions for this scenario.

Scenario 5: A New (Occasionally Hot) Cold War

This scenario is the easiest to specify given its stark nature. At its core, it combines the prior scenario of incipient rivalry with a security crisis or crises that sends the relationship into a downward spiral. The most likely triggers for this are a major U.S.-China military incident over Taiwan or a military confrontation between China and an ally of the United States, likely triggering Washington’s direct involvement. The relationship then turns into a full-blown, all-encompassing new Cold War. Both sides begin to see security and ideological competition in existential terms, and these become the central arenas for competition.

Washington and Beijing move to a constant warlike footing with increases in forward deployed military forces in Asia and, for China, all along its eastern coastline. The United States initiates a major defense buildup in Asia, perhaps including placing forces in Taiwan. Conventional military proximity and contact—bumping into and bruising each other—becomes a common occurrence. Nuclear weapons become a centerpiece of the relationship, with the United States redeploying them to South Korea and on its naval vessels in the region, notably those based in Japan. The central risk in the relationship shifts from that of an accident or a miscalculation to that of a deliberate conflict.

Both sides switch from economic and technological de-risking to a more severe decoupling. They rush to reduce interdependence as much as possible, putting substantial stress on the global trading order. The United States and China identify their respective political systems as threats to their values and dis/misinformation becomes a major feature of the new Cold War. In this scenario, Asia becomes split, and Washington’s allies there become more closely involved in its regional defense buildup and host more U.S. forces.

Global geopolitical fragmentation accelerates, leading to a world of competing camps, with China and Russia leading one of them. Like in the U.S.-Soviet Cold War, competition for influence in the Global South becomes a central feature. This arena of competition becomes mainly about economic and technological assistance to middle powers that are seeking to modernize and assert as much agency in the newly divided global order. States move in and out of the competing camps based on changes in their domestic politics.

The requirements and pathways for this scenario are evident in the description above. The main requirement is a major military incident that fundamentally alters the perceptions and policies of both sides, precipitating a dramatic change in relations. Unlike in the détente scenario, this incident does not precipitate a shift toward mutual restraint but rather leads to a major escalation of tensions. This is a function of the leaders and domestic politics in both countries. For this scenario to occur, a baseline level of nationalism on the part of U.S. and Chinese leaders is necessary; they become focused on accumulating capabilities in pursuit of global influence. A related requirement is accumulating geopolitical tensions between the two camps that are simultaneously cause and effect of the U.S.-China confrontation. 

Notes

The state of relations between China and the United States will cast a long shadow over world politics for many years to come. If the world’s two strongest powers are unremittingly hostile to one another, then each will spend more money on armaments, unaligned states will face strong pressure to choose a side, economic growth will slow, global challenges such as climate change or pandemic preparedness will be harder to address, and the risk of war will rise. If competition between Washington and Beijing is muted, however, then each can devote more of its wealth to domestic needs, global economic integration will yield greater benefits for all states, common dangers will be more likely to be solved, and the danger of war will recede.

No one knows for certain which of these two worlds we will inhabit, or even how China and the United States will deal with each other. Past behavior is an unreliable guide because states define and defend their interests differently as their relative power changes and as internal and external circumstances evolve. For this reason, we cannot assume that either country will act in the future as it did under different conditions in the past.

Therefore, efforts to peer into the future and devise policies to produce desired outcomes must rely on theory. In a world of infinite complexity, human beings must employ some sort of intellectual framework that identifies the most important causal forces shaping behavior and omits elements believed to be less relevant. Even policymakers who dismiss academic theorizing invariably rely on mental maps to help them anticipate what others will do and the responses that their different policy choices will produce.¹ Because competing theories of international relations highlight different causes, they typically lead to different forecasts about the future and to different foreign policy prescriptions.

This chapter explores four important approaches to international relations—realism, liberalism, social constructivism, and individual leadership—and identifies what each implies for the future of China-U.S. relations. It describes the logic of each perspective and some of the core predictions and policy conclusions that it implies. It concludes by arguing that policies based on a combination of defensive realism and economic liberalism have the best chance of preventing a dangerous clash between China and the United States.

Realism

Realism begins with the observation that states coexist in a world where there is no central authority that can protect them from each other. Each must therefore rely on its own resources and strategies to survive. Although states cooperate for mutual benefit and are not constantly at war, the possibility of war is always present and shapes much of what they do, even when they are formally at peace.²

All realist theories predict that the two strongest states will eye each other warily, because each is the other’s greatest potential threat, and neither can be entirely sure that the other will not do something harmful. Although ideological divisions and the ambitions of individual leaders may deepen a conflict, realism predicts that the strongest powers will be rivals no matter what their domestic characteristics may be or who happens to be in power at any given moment. At the same time, competing strands of realist theory reach different conclusions about the intensity of the resulting competition between two great powers and the best approaches for dealing with it.

Offensive Realism

For offensive realists, the anarchic structure of the international system compels states to maximize their relative power if they wish to survive. According to John Mearsheimer, the leading proponent of this view, “apprehensive about the ultimate intentions of other states and aware that they operate in a self-help system, states quickly understand that the best way to ensure their survival is to be the strongest state in the system.”³ Offensive realism is descriptive and prescriptive: its proponents claim that great powers think and act this way and are also correct in doing so.⁴

The difficulty of projecting power across oceans and onto a hostile shore (which Mearsheimer calls “the stopping power of water”) prevents any state from becoming a global hegemon.⁵ Instead, great powers typically aspire to become a “regional hegemon” (that is, the only great power in a given area). A great power that is unchallenged in its own neighborhood need not worry about defending its own territory and will be free to project power further afield if it wishes.

Offensive realists draw several implications for China-U.S. relations from this perspective. First, they believe a rising China will try to become a regional hegemon in Asia, because achieving this position would maximize its security. Second, the United States should do whatever it takes to prevent this from occurring, thereby forcing Beijing to devote more resources and attention to its own neighborhood and reducing its ability to project power and influence into other areas (and especially into the Western hemisphere). Third, the United States should also strive to slow Chinese economic development, especially in key areas of advanced technology.⁶ The United States should also do what it can to isolate China within the global community, recruit other powers into broad anti-China coalitions (especially in Asia), and maintain U.S. military superiority at all levels (including in nuclear and cyber capabilities). Offensive realism does not exclude efforts to sow dissension and weaken the hold of the Chinese Communist Party on power, if doing so could make China a less formidable competitor over time. Offensive realists do not seek war, but they believe maximizing U.S. power remains the best guarantee of U.S. security.

Thus, offensive realism predicts that an intense, zero-sum competition between China and the United States is nearly inevitable and that the risk of war will be substantial. Offensive realists believe this competition is hardwired into the current structure of world politics, and that the United States must do whatever it takes to win it. 

Defensive Realism

Defensive realists agree that international anarchy forces all states to worry about security, but they point out that trying to maximize power can make a state less rather than more secure.⁷ According to Kenneth Waltz, neorealists “see power as a possibly useful means, with states running risks if they have either too little or too much of it [and] sensible statesmen try to have an appropriate amount of it. In crucial situations, the ultimate concern of states is not for power but for security.”⁸ Defensive realists argue that rational states seeking to survive should acquire military capabilities sufficient to defend their vital interests while threatening others as little as possible, so as not to provoke an aggressive response by others or inspire the creation of a balancing coalition whose combined capabilities would leave them more vulnerable.

Thus, defensive realists accept that anarchy incentivizes states to want power and allows them to try to acquire it if they wish. But, at the same time, the absence of a central authority also gives states powerful incentives to counter bids for hegemony. For this reason, otherwise wary rivals will join forces to oppose whichever state appears to pose the greatest threat at a given point in time. Offensive realists focus solely on the desirability of getting more power; defensive realists emphasize that trying to do so can make a state less secure if it leads others to form a powerful coalition against it.

Defensive realists agree that relations between China and the United States will be competitive, but they are more sanguine about the prospects of avoiding war and preserving a significant level of cooperation. For starters, they emphasize that apart from the remote possibility of an all-out nuclear exchange, neither state poses an existential threat to the other. Neither could hope to conquer the other, crash its economy, or topple its government. Coexistence between the two is not merely desirable, therefore—it is unavoidable.

They also believe a bid by China for regional hegemony would be likely to fail. In the modern era, all but one of the previous bids for regional hegemony ended in catastrophic defeats for the great power that made the attempt, in each case at the hands of a more powerful balancing coalition.⁹ China’s rise and its increasingly assertive behavior is already causing many of its neighbors to balance more vigorously, and Asia is filled with highly nationalistic societies that would actively resist any effort by Beijing to dominate them. Furthermore, Japan and South Korea could easily acquire nuclear weapons if they felt the need for a deterrent, further limiting China’s ability to force them to accept its dominance.

For these reasons, defensive realists believe that preventing China from becoming a regional hegemon will not be overly difficult. The United States has a role to play in this effort, but much of the burden can and should be borne by local powers acting in their own self-interest. Defensive realists also favor U.S. efforts to lower tensions with Beijing so as to reduce its threat perceptions and concomitant desire to revise the regional status quo as well as to reassure U.S. allies that may be tempted to distance themselves from Washington if they begin to see it as the greater threat to regional stability.

In particular, defensive realists believe China and the United States alike could benefit from policies designed to enhance security (as opposed to simply maximizing power), even if competition continued in other realms. They recommend primarily defensive military postures designed to limit Beijing’s ability to project power against its neighbors (such as “porcupine” strategies and area denial) while refraining from developing conventional capabilities or war plans that require threatening or attacking Chinese territory. Defensive realists also favor arms-control agreements intended to reduce first-strike incentives (whether in the nuclear or cyber realms) and the formation of defensive alliances that commit their members to aid each other if they are attacked, but not if one of the member states is the aggressor.¹⁰

Power-Transition Theory

A final strand of realist theory—sometimes labeled power-transition theory or the theory of hegemonic war—focuses on how shifts in the balance of power can make conflict more likely. This logic is implicit in several recent works that see China-U.S. relations as reminiscent of earlier conflicts between leading powers and rising challengers.¹¹

There are at least four reasons why a rapidly shifting balance of power may make conflict more likely.¹² First, rising powers may be dissatisfied with arrangements that were established when they were weaker, but any attempt to revise the status quo will be seen as dangerous by the powers that established the existing order and resisted by them. At a minimum, this will increase the number of issues on which the major powers are at odds. Second, a rising state’s efforts to increase its power or to translate greater wealth into military capabilities is likely to be regarded as threatening and as evidence of malign intent. Third, rapid changes in the balance of power create greater uncertainty about the state of the military balance, thereby making it more likely that both sides think they can win a military contest. In other words, when the balance is less certain, miscalculation is more likely. Finally, rapid shifts in the balance of power can lead to windows of opportunity that encourage one side or the other to act while it has the chance.¹³

To sum up, all realist theories predict that relations between China and the United States will be competitive, and that the two states will monitor each other’s actions closely and seek to prevent each other from gaining a decisive advantage. But realists disagree on how intense the competition will be, and on the steps that should be taken to manage it.

Liberalism

Realism emphasizes how the lack of central authority in the international system encourages states to fear each other and to compete for power or security. Liberal theories, by contrast, focus on the effects of different domestic arrangements, the impact of economic exchange on state behavior, or the possible benefits from international institutions. Political liberalism argues that regime type and/or the distribution of power and preferences within countries has powerful effects on foreign policy. This perspective includes the claim that liberal states are driven to spread liberal principles abroad or the widespread belief that “democracies don’t fight each other.”¹⁴ Economic liberalism argues that high levels of economic interdependence discourages conflict because states can more easily obtain what they need by trading than by fighting, and because they will not want to lose the benefits of trade and investment by going to war.¹⁵ Liberal internationalism maintains that states can create rules and institutions to overcome the fear that others will renege or cheat on agreements and thus achieve more cooperative outcomes than most realists expect.¹⁶

In the euphoria that followed the peaceful end of the Cold War, all three strands of liberal theory encouraged naïve optimism about the future of China-U.S. relations. Convinced that liberal democratic capitalism was the only viable path in a globalizing world, scholars, pundits, and politicians concluded that economic engagement with China would create powerful bonds of mutual dependence and diminish the risks of conflict.¹⁷ Others argued that the citizens of China would demand greater political freedoms and the Chinese Communist Party would face powerful pressures to liberalize as the country modernized and grew richer, although they sometimes conceded that a transition to genuine democracy was not inevitable.¹⁸ Last, welcoming China into existing international institutions would, in the words of Deputy Secretary of State Robert Zoellick, make it more likely to become a “responsible stakeholder” and reduce its incentives to revise the existing global order.¹⁹ This optimistic vision of possible convergence and institutionalized cooperation has few, if any, adherents today.

A more modest and sophisticated liberal view may still provide useful guidance for the future of China-U.S. relations. Even if China remains a one-party autocracy and relations between Beijing and Washington are highly competitive, the combination of mutual economic dependence and China’s commitment to key global institutions may attenuate the rivalry significantly and reduce the risk of war.

As Iain Johnston has documented, China remains committed to many existing international institutions—in some cases more so than the United States.²⁰ In recent years, for example, Washington has done far more to undermine the World Trade Organization than Beijing has. As liberal theories predict, financial and commercial interests in China and the United States have actively opposed the trade restrictions that each government has imposed on the other and pressed political leaders to reduce tensions and avoid a costly rupture. These efforts have been at least partially successful: efforts to “decouple” or “de-risk” the two countries’ economies have reduced economic exchange from what it would otherwise have been, but trade between them still reached an all-time high in 2022 and each country remains among the other’s top trading partners.²¹

Furthermore, China’s recent economic problems—including a sluggish post-COVID-19 recovery, a financially troubled real estate sector, accelerating deflation, and declining consumer confidence—appears to have led its leaders to moderate their behavior that had produced a powerful backlash in the United States and elsewhere.²² Direct talks between high-level U.S. and Chinese officials have been restored (most visibly in the face-to-face meeting between Presidents Joe Biden and Xi Jinping in November 2023), suggesting that a desire to preserve some of the economic ties upon which the two economies depend is having a moderating effect on the overall relationship.

Other strands of liberal theory offer a gloomier forecast, however. The Biden administration’s efforts to define contemporary world politics as a wide-ranging competition between democracies and autocracies reflects a fundamentally liberal view of foreign policy and blames most of the world’s problems on autocratic regimes whose values are antithetical to America’s. Moreover, the belief that China is a threat because it is run by an autocratic Leninist party enjoys considerable support among Republicans as well. In the words of H.R. McMaster, who was national security advisor under former president Donald Trump, China is a threat “because its leaders are promoting a closed, authoritarian model as an alternative to democratic governance and free-market economics.”²³ Or as former Secretary of State Mike Pompeo argued in 2020: “It’s a different Chinese Communist Party today than it was 10 years ago. . . . This is a Chinese Communist Party that has come to view itself as intent upon the destruction of Western ideas, Western democracies, Western values.”²⁴ From this perspective, dealing with a powerful China must seek to alter its domestic order.

This tendency to see world politics as a struggle between good and bad systems shows liberalism’s dark side. At its core, liberalism assumes that all human beings possess certain basic rights that should not be infringed and suggests that only governments that respect these rights are truly legitimate. In practice, this means a political system where state power is limited, leaders are accountable to citizens, the rule of law prevails, and basic rights are respected. Given the belief that these rights apply to all human beings no matter where they live, powerful liberal states are often tempted to export these principles to other countries. Unfortunately, this “crusader impulse” makes conflict between the United States and authoritarian regimes such as the ones in China or Russia more or less inevitable.²⁵ It also complicates U.S. efforts to partner with other non-democracies in order to isolate specific great-power rivals. Potential partners may be resentful and resistant if Washington makes its support conditional on them adopting democratic reforms or improving their human rights records (and even more so if Beijing makes no such demands on its partners). Moreover, U.S. leaders will appear hypocritical if they extol the need to respect human rights and embrace democracy, and then turn a blind eye when some key partners ignore this advice.

In short, liberalism’s implications for relations between the United States and China are mixed. On the one hand, it correctly identifies the moderating impact that close economic ties can have on bilateral relations, and the ability of global institutions to facilitate cooperation in the face of temptations by states to cheat or to go it alone. These factors do not make conflict or war impossible, but they do make them less likely. On the other hand, the liberal view that democratic regimes are the only reliable protectors of basic rights cannot help but exacerbate Beijing’s perceptions of threat and reinforce the belief that the United States and China cannot coexist over the longer term.

Social Constructivism

Social constructivism emphasizes how ideas, norms, and identities influence how states act.²⁶ It recognizes that human interaction creates social facts—patterns of thought and behavior that guide how humans act and that establish what types of behavior are regarded as right or proper. Social constructivists emphasize that what states do and say, and how they define themselves, is constantly evolving, and that the resulting changes in beliefs, attitudes, and discourse can have profound effects on what they do. For example, centuries ago ruling elites in the West believed that it was proper and even desirable for powerful states to rule large colonial empires; today, ruling a foreign people that wishes to be independent is typically condemned and usually unsuccessful. Similarly, slavery was once an accepted practice, but today is anathema.

The rise of modern nationalism is another illustration of constructivism at work. The sense that a given people constitutes a unique group with a shared sense of belonging, a common history and culture, and a collective sense of itself as constituting a “nation” plays a key role in how states define their interests and formulate state policies. Such collective awareness did not exist in most of the world until the last two centuries, but it is now widespread. National identities typically rest on particular, usually self-serving, historical narratives that often have a profound impact on the actions states regard as legitimate.

Constructivism encourages us to consider the different ways in which the United States and China view the past. American elites see their fortunate history as evidence of their country’s exceptional virtues, which they believe made its rise to great power nearly inevitable and give it special global rights and responsibilities. In their eyes, America is the “indispensable power” whose stewardship of a “rules-based order” has been broadly beneficial to nearly everyone and should be maintained for as long as possible. Among other things, this view justifies preserving an active U.S. security role in Asia. For Chinese elites, however, the recent past includes a “century of humiliation” in which hostile great powers from far away repeatedly exploited China’s weakness. From this perspective, the country’s recent rise is a long-overdue return to its position as a (or, perhaps, the) leading world power, and Beijing must overcome any attempt to deny it this rightful place. Similarly, when Chinese writers invoke concepts such as tianxia (rightful rule) or argue that “Asia is for Asians,” they are promoting a worldview that depicts the United States as an illegitimate foreign presence in the region and suggest that other Asian states would benefit from greater Chinese leadership.²⁷

Where realists emphasize the role of hard power and balancing coalitions, and liberals stress the impact of regime-type, economic ties, or institutions, constructivists call attention to the arguments and normative claims that Washington and Beijing are deploying to persuade others to accept or tacitly support their preferred policy outcomes. Each will be quick to point out the other’s ethical lapses, attempt to justify or undermine territorial claims on different historical interpretations, contend over competing conceptions of human rights, and strive to control global debates on a wide variety of issues.

Because social constructivism lacks a detailed causal story and cannot anticipate which ideas, norms, or identities will ultimately win out, it is not, strictly speaking, a predictive theory. It is still a useful perspective, however, because it highlights the impact that competing narratives, identities, and normative claims can exert on the behavior of states, and because it calls attention to the need to persuade others to regard one’s own claims and behavior as consistent with collectively held notions of right and wrong.

Individual Leadership

A final perspective on international relations downplays the structural forces emphasized by realists, the domestic, economic, and institutional factors in liberal theory, and the ideas, norms, and identities that social constructivists regard as important influences on state behavior. This perspective focuses instead on the agency of individual leaders, the scope of their authority, and their specific ambitions or traits that will allow them to succeed or fail.²⁸

Unfortunately, there are no well-specified and robust theories linking individual leadership traits to specific foreign policy decisions. Even so, the tendency to explain a state’s foreign policy and predict its future behavior by focusing on who is in charge is widespread, especially in popular commentaries on world affairs. For example, pundits routinely assume that U.S. foreign policy will be heavily influenced by whoever occupies the Oval Office, or they attribute Russia’s behavior almost entirely to the character and whims of President Vladimir Putin. This approach has some basis in fact: even the most committed structural realist or diehard liberal theorist would concede that some individuals—such Napoleon Bonaparte, Adolf Hitler, Nelson Mandela, or Margaret Thatcher—have exerted a profound and wholly individual impact on world affairs.

Not surprisingly, therefore, commentaries on China-U.S. relations often highlight the role of individual leaders. It is now commonplace to “explain” China’s approach to world affairs by invoking the personal ambitions and leadership style of Xi. According to Kevin Rudd, Australia’s former prime minister with extensive knowledge about the inner workings of Chinese politics, the country’s foreign policy is “an expression of Xi Jinping’s personal leadership temperament, which is impatient with the incremental bureaucratism endemic to the Chinese system.”²⁹ Similarly, Timothy Garton Ash blames the deteriorating relations between China and the West on “the turn taken by the Chinese communist party leadership under Xi Jinping since 2012: more oppressive at home, more aggressive abroad.” According to Suisheng Zhao, “Chinese foreign policy is clearly in Xi’s grip [giving him] a strong personal and institutional capacity to chart a new course for China’s approach to its international relations.”³⁰

From an American perspective, a focus on individual leadership has good and bad implications for China-U.S. relations. The good news—such as it is—is that Xi may be not only the most powerful Chinese leader since Mao Zedong but also the most error-prone. Mao’s impulsive, ideologically driven initiatives, such as the Great Leap Forward or the Cultural Revolution, did enormous damage to China and left the country much weaker than it otherwise would have been. Under Xi, China mismanaged its response to the COVID-19 pandemic, alienated other countries with a confrontational “wolf warrior” approach to diplomacy, and damaged the country’s economy by reimposing the authority of the Chinese Communist Party over several critical sectors. Those hoping for the United States to maintain a position of global primacy may be tempted to see Xi’s unchallenged authority as a blessing in disguise.

The bad news is that the combination of great ambitions and unchecked authority means that Xi may take big gambles and accept greater risks than more cautious leaders would. Even if a major roll of the dice—for example, over Taiwan—went badly for China, it would harm many others as well. 

Conclusion

None of the competing perspectives outlined above offers a foolproof formula for managing a competitive relationship between the United States and China. Nonetheless, which worldviews predominate within the two states’ foreign policy communities is likely to have a profound impact on their interactions and on the character of global politics.

A purely structural theory such as offensive realism sees conflict as hardwired into the international system and leaves the least room for agency. It offers also something of a self-fulfilling prophecy insofar as its predictions are more likely to come true if elites in one or both states embrace them fully. It sees China and the United States as locked into a zero-sum game that will only end when one is subordinated to the other, although it is also possible that both will lose and eventually be supplanted by other rising states.

It follows that China and the United States will presumably compete intensely no matter who is in power in either country, and that evolving norms and institutions will matter only to the extent that they favor one side or the other. Ironically, a deep commitment to political liberalism points in the same direction as offensive realism, given that it highlights the incompatibility of democratic and autocratic political systems and believe the former must do what it can to replace the latter. 

Prospects for peace will be greatest if China and the United States adopt a combination of defensive realism and economic liberalism. From defensive realism comes the recognition that neither can conquer the other and the warning that overly ambitious efforts to revise the status quo (such as a bid by China for regional hegemony) would be self-defeating. With each state’s existence assured, both can engage in mutually beneficial forms of economic cooperation without being overly concerned that doing so will shift the balance of power decisively. As economic liberalism predicts, extensive economic connections will allow citizens in both countries to live more bountiful lives and give their leaders an additional incentive to keep competition within bounds.

No one knows which of these competing perspectives will win out. What may matter most is which of these competing theories is embraced by the handful of key individuals who will lead China and the United States. As John Maynard Keynes famously wrote, whether they know it or not, the people in charge of great nations are often guided by the ideas of “some academic scribbler from a few years back.”³¹ It is no exaggeration to say that the academic theories on which future leaders choose to rely will have a profound impact on relations between the two countries as well as on the rest of the planet.

Notes

How could the United States and China move meaningfully in the direction of a modus vivendi based on managed economic competition, deepened crisis-management mechanisms, sustained trade and investment, limited technology restrictions, and cooperation on shared global threats? The rapid deterioration in their relations over the past five years makes this difficult to envision, but the November 2023 meetings between Presidents Joe Biden and Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit saw progress in this direction. Nonetheless, the two countries still seem more likely to plunge into a second Cold War. What is more, they risk replicating the fraught early Cold War years, with nuclear and conventional arms races, the formation of political and economic blocs, and an existential crisis. If there is to be any hope of steering the U.S.-China relationship away from this outcome, a vision of a more positive direction is needed.

The core requirements for realizing a less fraught future are:

• Washington and Beijing setting what is out of bounds in their competition.
• Consensus between them to shift from a dynamic war preparation to one of war prevention.
• Avoiding an existential crisis or a “race to the bottom” economic and military rivalry.

Engine of U.S.-China Rivalry

To envision a fundamental change in the currently negative trajectory of U.S.-China rivalry, it is necessary first to review how each country views the other and the main perceptions that drive durable and deepening mutual animosity.

China’s View of the United States as “Global Hegemon” Bent on Regime Change

The Chines regime’s increasingly public narrative about the nature of the United States as a global power is stark. This paints the United States as a violent, existential threat targeting China as it previously pursued regime change in and/or the destruction of the Soviet Union, Iraq, al-Qaeda, and Afghanistan. The Chinese Communist Party (CCP) frames Washington as the “global hegemon” that ruthlessly seeks to defend its primacy, virtually in every domain.

Aspects of the CCP’s view of the United States date back to the Mao period and are embedded in Marxist-Leninist ideology and to the Korean War, but were blunted by the greater threat posed by the Soviet Union by the 1970s. China managed relations with the United States in the initial post-Cold War period with a strategy to “hide our strengths, bide our time.”¹ Its entry (with U.S. backing) into the World Trade Organization (WTO) in 2001 allowed it to build the trade and manufacturing foundation for its claims to great power status. At the time, its GDP was $1.3 trillion; today it is estimated to be $18 trillion.² Meanwhile, Beijing also benefitted from Washington’s preoccupation with the Global War on Terror, which encouraged a U.S. policy of benign neglect when it came to the more problematic aspects of China’s economic and political activities, such as its illegal subsidies, intellectual property theft, and increasingly bombastic and sometimes coercive behavior.

The CCP uses its adversarial framing of the U.S.-China relationship to justify its domestic monopoly on power and growing suppression of citizens’ open access to information and human rights. The fact that this framing long predates the full emergence of the current rivalry between the two countries suggests that it is at least in part instrumental rhetoric deployed for primarily domestic purposes. However, China’s leaders seem increasingly to believe their rhetoric. As Xi, who is not only president but also CCP leader and military supreme commander, told the National People’s Congress in March 2023, “Western countries headed by the United States have implemented containment from all directions, encirclement and suppression against us, which has brought unprecedented severe challenges to our country’s development.”³

Even before the Trump administration identified China as the United States’ primary adversary, in its 2017 National Security Strategy, China saw itself as highly vulnerable to U.S. efforts to blunt its rise and to overthrow the CCP. Ironically, as the view that the “peaceful evolution” strategy of promoting political reform in China through economic opening had failed became prevalent in the United States, ⁴ the CCP was concerned that Washington was succeeding in weakening its hold on power.

Xi has framed the historic events surrounding the recent period of China’s growth as a “once-in-a-century change,” an allusion to the First World War and its aftermath, which overturned the international order dominated by European great powers.⁵ The CCP probably does not seek to overturn the international order that has brought China enormous benefits, enabled and sustained its unprecedented economic rise, and provided an architecture for its global influence. But it does seek to alter what it sees as that order’s bias toward liberal democratic norms and values. Above all, China’s leaders seek an order that accepts the legitimacy of their authoritarian political model, which they believe provides security, stability, and development—public goods that parts of the world that have not benefited from the Western development model may find attractive.  

U.S. Fears That China Seeks Global Primacy

The United States has many objective reasons for strong policy responses to China’s actions, including the abhorrent systemic persecution of its Muslim minority, the suppression of Hong Kong’s democratic institutions, and the growing overt military threats to Taiwan and coercive operations against the Philippines and others that challenge China’s maritime claims, some of which have been ruled invalid by a Permanent Court for Arbitration tribunal.

But, in a parallel to the CCP, the United States has its own narrative about China: one that portrays the country as seeking regional or even global domination. China’s rapid rise is disruptive—as even the CCP sometimes recognizes—and poses significant challenges to the economic, security, information, cyber, and liberal underpinnings of the international order.

The strategic rivalry with China declared by the United States and sustained through the otherwise contrasting Trump and Biden administrations underscores that Washington, to some extent, fears that part of China’s narrative may be true: namely that the United States is losing a contest it only belatedly realized it was in, or, as Xi has argued, that “the East is rising and the West is declining.”⁶

The United States remains unrivaled in most metrics of national power, but its relative military and economic might, its prestige, and its social harmony have declined in the two decades since 9/11. Like any great power that has enjoyed a position of extraordinary privilege in the international order, it is uncomfortable with the possibility of a true peer competitor rising and views this as a threat. China, which has been rising for decades, reached some key landmarks recently; it became the world’s top manufacturing and trading nation, as well as the world’s second-most capable military power (except in nuclear warheads, a capacity it is now rapidly building up). In the past decade, China suddenly seemed to be everywhere, extending its relevance and influence through global development lending, building its first overseas military base in Djibouti, and becoming increasingly aggressive and coercive in land disputes with India and maritime disputes with Brunei, Japan, Malaysia, and the Philippines. In military terms, China has surprised and sometimes shocked Western observers with the speed and scale of its naval buildup, its deployment of hypersonic weapons in advance of the United States, and the 2021 fractal orbital bombardment demonstration that showed it could deploy hypersonic conventional or nuclear warheads for unwarned attack and the means to defeat missile defenses.

In combination with the political polarization in the United States and the global COVID-19 pandemic that started in China, Beijing’s success and increasingly assertive and confident posture has driven a bipartisan competition in the United States to move toward a stance akin to a new Cold War one, which has prominently featured economic decoupling, especially in technological areas that are integral to military and competitive security. Much of the public discourse has been reminiscent of the Cold War, perhaps because the United States feels confident that it can again prevail in a new one.

Taiwan is the Most Dangerous Potential Flashpoint for a U.S.-China “Race to the Bottom”

The Taiwan issue, with Beijing’s heightened military pressure on the island and Washington’s greater support for it, poses the greatest risk of a U.S.-China war. The United States has been enmeshed in this issue, through acts and decisions not to act, almost since its inception during the Chinese Civil War. It has played a decisive role at every juncture, even while professing an official position of not taking a position, other than that of urging the two sides to resolve the issue peacefully. Beijing has made clear that if Taiwan or Washington ignore its red lines, it will quickly move to compel a return to the status quo through hostilities or, failing that, unification with the mainland by force. The United States, Taiwan, and China today are much closer to conflict than at any time since at least the 1970s. The year 2027, which will be the centennial of the founding of the People’s Liberation Army (PLA), has frequently cited by senior U.S. military figures as a “war date,” and hence a reference point for U.S. public discourse. By that year, the growing preparedness of the PLA may make Beijing likelier to take risks. But going to war with the United States over Taiwan would remain fraught with danger for the CCP and for China—Xi probably would take this step only if other options are exhausted.

On the U.S. side, a bipartisan consensus makes any soft stance toward China politically unpalatable. Republicans and Democrats alike increasingly see China as an issue that could feature prominently in upcoming elections and they are competing for appearing tougher in their statements. And, because of the long-standing and deeply ideological basis of the CCP’s views of the United States, it would be difficult for Washington to convince Beijing that any U.S. outreach is anything other than self-serving or a sign of weakness. China would not easily give credit to the United States for softening its position.

Envisioning a Different Path

The relationship needs to move first toward a more constrained competition in which both sides stop racing toward the bottom before it can be strengthened and move toward managed competition instead of adversarial enmity. This wouldn’t mean an end to strategic rivalry between the two but would constrain its means and modes. That requires both to create complementary narratives that emphasize they have more to gain than lose from constraining the breadth and depth of their competition in economic and security affairs: that the existential urgency both sides are positing today is at least partially imagined, that a less confrontational approach is possible, and that “time is on my side.”

Third parties can play key roles in this, especially the United States’ European and Indo-Pacific allies and partners that have already joined it in criticizing the worst aspect of Chinese behavior, while tempering the belligerent tone of some U.S. framing. For example, Washington’s penchant for economic decoupling from China more recently has been largely replaced by economic “de-risking,” following European Commission President Ursula von der Leyen’s use of the term in an important speech on EU-China relations in March 2023.⁷

Words alone will not suffice, but the lexicon of framing and public statements carry unusual weight in a period of truncated dialogue between Washington and Beijing. While the meeting between Biden and Xi at the November 2023 APEC summit resulted in resumed military dialogue, a nascent strategic arms-control dialogue, and a slight economic thaw, the past several years have demonstrated the underlying fragility of the relationship and with that the possibility that moments of relative détente may be fleeting.⁸ The deepening tensions following House of Representatives Speaker Nancy Pelosi’s August 2022 visit to Taiwan and China’s spy balloon transit of the United States airspace in early 2023 demonstrate how events can drive the dynamic. In October 2023, the Department of Defense revealed that, over the previous two years, more than 180 Chinese intercepts of U.S. and allied reconnaissance flights in international airspace off China’s coast had been unsafe and unprofessional, risking fatal incidents and resulting crisis—as happened in 2001 at a time when relations were generally stable—with little warning and at far higher stakes.⁹ Since this revelation, such intercepts have ended, demonstrating that the United States can shape Chinese behavior, especially on the eve of important leadership meetings.¹⁰

Setting Boundaries on Competition

Shifting the context for U.S.-China strategic rivalry requires both sides and key third parties to prioritize predictability and stability while managing domestic reactions and expectations. To remain within the Cold War analogy, it requires a mutual desire to move to a situation like the stable middle phase of the Cold War without undergoing similar earlier existential crises.

Nuclear arms control and risk reduction is a relatively new priority for the two countries, but it is constrained at present. A dialogue in November 2023 brought together foreign affairs officials, not military representatives. The impetus for greater engagement comes from China’s decision to expand its nuclear weapons stockpile and delivery systems five-fold between 2020 and 2035, as reported in the Department of Defense’s last three annual reports to Congress on PLA capabilities. China has not acknowledged this force expansion, which will transform its nuclear forces from the smallest of any of the permanent five members of the UN Security Council to rough parity with the United States and Russia in terms of intercontinental nuclear forces. Beijing long rebuffed U.S. arms control entreaties, primarily because the large force disparity and the inspection provisions of any agreement would disadvantage it. But, if the U.S. assessment is accurate, this should no longer be the case and trilateral strategic arms control (including Russia) could prove advantageous for Beijing by enhancing nuclear stability, avoiding an arms race, and expanding constraint on U.S. missile defenses. It would also clearly signal that China had arrived as a strategic peer of the United States.

Unintended military incidents could derail diplomacy and provoke a crisis—an issue that is becoming more urgent after several recent maritime and air incidents. While the recently reestablished regular U.S.-China military dialogue mechanisms provide venues to discuss incidents, so far they have not proven sufficiently robust to prevent them. China’s increasingly aggressive military behavior is the primary catalyst for these, but the U.S. policy of “sailing, flying, and operating wherever international law allows” is an open-ended challenge to it since all of this takes places within a few dozen miles of its coastline.¹¹ In response to the Department of Defense’s revelation about the unsafe intercepts of U.S. and allied aircraft over the past two years, China’s Defense Ministry alleged the United States had flown 2,000 air operations and conducted numerous naval operations close to China.¹² Even if this Chinese figure is exaggerated, there are grounds for dialogue and adopting rules of the road to reduce dangerous incidents. This likely would require the countries’ leaders to direct the respective militaries to curtail aggressive operations and to adopt new rules, while avoiding a public backlash for looking weak.

Speaking with one voice with the United States’ allies has been a strength of the Biden administration, but that is likely to become more difficult if the rivalry with China becomes more adversarial, or if elections result in a return to the more confrontational stance toward allies seen during the Trump administration. The ramifications of deepening U.S.-China confrontation, even short of military conflict, include steep economic and technology costs for all Western allies—more than has been the case from the international impact of their sanctions on Russia after it invaded Ukraine. Burgeoning defense budgets and the incipient formation of blocs can undermine public support for and pose great challenges to alliance cohesion. While China remains the United States’ official strategic focus, the Israel-Hamas war and the war in Ukraine also demonstrate that even superpowers cannot always pick their priorities. Sustaining allied solidarity requires deeper U.S. engagement and leadership, extending into the trade and economic spheres, where “America First!” policies continue under the Biden administration.

Taiwan remains the most likely cause for war with China, including nuclear brinksmanship. Under the Trump and Biden administrations U.S. policy on Taiwan shifted as Beijing’s military capabilities increased, making the risk of a Chinese war of choice more plausible. Since 2019, China has effectively remilitarized the status quo over Taiwan, with air and naval operations around the island—largely in international airspace and waters—a near-daily occurrence. Calls in the United States to shift from a policy of strategic ambiguity to one of strategic clarity, with a defined combat commitment to defend Taiwan, risk a deterrence trap, in which reciprocal actions to show strength deepen the security dilemma, thus bringing on the very crisis such a change would be intended to prevent. Instead, Washington and its Pacific allies and partners should reinforce their capacities to blunt China’s military ambitions, strengthen Taiwan’s self-defense, and oppose change to the political status quo by either side. The goal should be to preserve strategic stability over Taiwan since the alternative—whether China succeeds or fails to achieve “reunification”—would likely involve the destruction of Taiwan.

Staying out of each other’s internal politics should become a foundation for less confrontational relations. For China, this would mean a commitment not to attempt to influence or interfere in the politics of the United States and its allies and partners, including Taiwan. For Washington, it would mean a commitment not to delegitimate the CCP or to seek to overthrow it, while still retaining the right to criticize actions that are outside international norms.

The United States and China Are Capable of Change

Adversarial hostility need not be the only path forward. The CCP’s hardening against domestic dissent and freedom of expression under Xi were partially the result of China’s unexpected relative success vis-à-vis the United States. So, for the CCP’s strategic thinkers, who are materialists and realists, new demonstrations by Washington of its performance, recuperative powers, and restored political legitimacy can still be key determinants of the trajectory of relations. If the United States performs better domestically and strategically, and champions greater adherence to shared liberal and democratic values at home and abroad, China may reassess its course, just as it has before.¹³ If the United States continues to demonstrate that it is internally cohesive, financially dominant, and the leader of a broad coalition of allies and partners, China may be forced to reconsider its earlier forecasts.

The United States is already doing this at the external level by focusing anew on strengthening its alliances in the context of Russia’s invasion of Ukraine, and coordinating more closely with its allies and partners on new economic and technology restrictions to prevent accelerated Chinese military advances that employ artificial intelligence and advanced semiconductor manufacturing. Moreover, the reaction to the war in Ukraine, including severe economic and diplomatic sanctions against Russia, demonstrated strong cohesion among the Western allies. This underscores for China that aggression against Taiwan likely would be met by a similarly united stance, with severe costs to its economic growth and international standing. 

Since much of the current framing for U.S.-China strategic rivalry reflects Cold War thinking, it is useful to remember China’s role in the last phase of that contest. It aligned strategically with the United States not out of trust, but because the Soviet Union represented a more proximate and severe threat to its security and the CCP’s survival. China cooperated with the United States to collect intelligence and their military cooperation grew to the point where—before the 1989 Tiananmen massacre—the United States had sold the PLA some $1 billion in military technology. China fought Vietnam, a Soviet proxy, starting with invading the country’s northern provinces in 1979 and then in consistent artillery and infantry combat in Ha Giang province throughout the 1980s. The United States and West may have won the Cold War, but China remembers that it also was on the winning side. This is why Beijing viewed the West’s post-Cold War triumphalism about ideological superiority as threatening to itself as the last great communist power. Today, China sees rivalry with the United States as a more even contest than in the Cold War, with a strong U.S. performance since 2020 and its own stumbles creating a new environment for managed competition.

Shared threats could provide a driver for collaboration. These include climate change and environmental disasters, the risk of new pandemics, and the potential for terrorism, newly underscored by Hamas’s massacre of Israelis and Israel’s pledge to eradicate the terrorist group, which could open a new era of sectarian violence.

But finding any path to reduced tensions and a mutually productive relationship requires that war over Taiwan is avoided, and that the United States and China become newly motivated to focus on war prevention instead of war preparation. In the Cold War, the 1962 Cuban Missile Crisis forced Washington and Moscow to stare into the nuclear abyss. (The United States and rest of world would not learn for thirty years after the 1962 Cuban crisis just how close the two sides came to nuclear war.)¹⁴ The subsequent détente did not immediately result from the crisis, but the two sides never again moved so close to the brink, and the next year they signed the first arms control protocol, a limited nuclear test ban, along with the United Kingdom.¹⁵ The United States and the Soviet Union in 1963 also established the first hotline between their leaders to prevent crisis escalation. By the late 1960s, after decades of their arms race, they began taking major steps toward nuclear arms control and threat reduction.

The Alternative Is a Crisis

The United States and China should understand that the ingredients for a major crisis are already in place and growing, as demonstrated by Pelosi’s visit to Taiwan, the lack of high-level political contact between the two sides, and the breakdown of military communications channels.

China’s unprecedented response to Pelosi’s trip demonstrated not just that it was willing to risk a crisis but that it wanted one. Past crises—in 1995–1996 in the Taiwan Strait, in 1999 over the U.S. bombing of China’s embassy in Belgrade, and in 2001 over the collision of a PLA fighter jet with a U.S. reconnaissance aircraft—were followed by direct communication between senior leaders, more robust military engagement, and periods of robust diplomacy. It is far from clear that the same could happen in the current environment of strategic rivalry, yet Beijing seems willing to gamble on calm eventually prevailing in the event of a crisis.

The stakes in any potential crisis are likely to rise as China builds up its nuclear forces to 1,500 warheads by 2035, as assessed by the Department of Defense.¹⁶ This major posture change is glaringly inconsistent with Beijing’s long-standing pledge not to be the first to use nuclear weapons and its previous commitment to a minimum, credible retaliatory stance. This suggests that China may now have a more dangerous concept of escalation and deterrence in the event of a war over Taiwan, and that it is basing this on the fact that the United States has never directly fought a highly capable nuclear-armed adversary.

At the same time, however, China’s move toward strategic nuclear parity with the United States (and Russia) could provide a basis for intensified engagement on new arms-control measures, especially as many of the previous Cold War agreements—the Anti-Ballistic Missile Treaty, the Intermediate-Range Nuclear Forces Treaty, the Treaty on Open Skies—have been abandoned. The challenges for U.S. and Chinese policy and diplomacy will be to retrace the steps taken by the United States and the Soviet Union to reduce nuclear and war risks without first going through an existential crisis like the Cuban one. China is unlikely to agree to any such process until it judges the United States is upholding constraints on U.S. military forces on the island and offensive weapons sales and will not cross its red lines over Taiwan—such as recognizing independence or returning to a formal war fighting commitment. But that does not prevent the United States and its allies and partners from working now to deter aggression by China against Taiwan, or to prepare to manage and defuse a crisis that increasingly seems more a matter of when, rather than if.

Notes

Relations between China and the United States today are generally accepted to be the worst they have been since their rapprochement in 1971–1972. War between them—inadvertent or deliberately initiated—is not ruled out. In this disturbing circumstance, it is urgent to find a way of stabilizing what is regarded as the most important state-to-state relationship in world politics. One potentially productive pathway would be to adopt a less direct focus on bilateral contestation and instead to envision a global order that over the next five to ten years can support that stabilization goal.

The following analysis first presents a broad sketch of the current state of China-U.S. relations and of the current condition of global order, second considers why it is productive to think about stabilization despite the many difficulties in and around the relationship, third shows how the analytical lens of global order can aid the search for stability, and fourth suggests forms of coexistence that could provide a minimal basis for stabilization. Finally, some of the ordering mechanisms and key characteristics of a global order capable of accommodating a stable China-U.S. relationship are outlined.

Analysis of this kind requires a degree of forecasting that is generally regarded as perilous. There is a great deal of contingency in international relations that often yields consequences, often unintended, capable of reshaping not only bilateral relations but also global and regional orders. A more modest goal here is to establish some underlying trends in the China-U.S. relationship and in global-order characteristics that may carry over to an indeterminate future.

Bilateral Tensions in a Fragmenting Global Order

China-U.S. relations since the rapprochement in the early 1970s have never been easy. Nevertheless, they benefitted initially from the two countries’ strategic alignment against the Soviet threat, and later from their growing economic interdependence and regular communication. The two governments held economic, political, and strategic dialogues across a wide range of issue areas. The aim was to increase transparency, to reduce the prospect of shocks destabilizing the relationship, and to find solutions to some of the issues that caused bilateral tension and contributed to global disorder.  

However, China’s rise to power, together with the advent of a more ambitious leader in Xi Jinping, has disrupted that modus vivendi at a time when global order is in transition. Stable coexistence has become difficult, in significant part because China’s resurgence has not been a singular event but an important component of what Fareed Zakaria called the “rise of the rest.”¹ The presence of additional power centers and the diffusion of agency to state, nonstate, and transnational bodies (termed by Amitav Acharya as a “multiplex world order”²) are the conditions under which the United States has to formulate a new strategy toward China. Against a backdrop of military, economic, and political crises, and given a more decentered system, coming U.S. administrations will need to consider how the course of the relationship, together with China’s emergence as a major global actor, affects many disparate constituencies around the world and their prospects.

Many of these new voices contest what they see as the unfairness of the current global order. They are ready to challenge what they perceive as the unwillingness of those states and peoples who have enjoyed the perquisites of the post-1945 order to reduce those privileges. Referred to by Christian Reus-Smit and Ayşe Zarakol as “polymorphic justice claims,”³ these mostly unmet demands are contributing to the erosion of that order, at least as much as the geopolitical struggle between China and the United States. In addition to its relationship with Beijing, Washington also needs to acknowledge and urgently address some of these claims.

This global contestation manifests itself in various venues and over several critical issues. Core components of the post-1945 global order, such as the United Nations and the Bretton Woods institutions, long ripe for reform, are now being more vigorously pressed to deliver fairly on a wide range of issues through more representative institutional structures. The unevenness in the world’s ability and willingness to deal with compelling shared-fate issues, such as climate change, forced migration, health pandemics, debt crisis, poverty, and food security are high on a long list of challenges that must be solved. In an era scarred by the outbreak of devastating inter- and intra-state wars, critics note too the varying levels of attention and resources devoted to the world’s many conflict zones. The demand for multilateral solutions is at an all-time high even as the multilateral institutions that were carriers of norms associated with the post-1945 era—control of weapons of mass destruction, nonuse of force except in self-defense, prohibitions against torture, commitment to free trade—have frayed.

Stabilization in China-U.S. Relations Amid Continuing Tension

This context suggests a need for China and the United States not only to attempt to manage the tension in their relationship but also to do so to direct more consistent attention to the management or resolution of shared-fate issues and neglected justice claims. There are nascent indications that both accept they must find a new modus vivendi in dangerous times. They have shown willingness since 2023 to step up contacts to manage and reduce the strain in their relationship, and thereby to diminish the prospect of war between them and to improve the chances for the survival of the planet.

Recognition by China and the United States that they are both vital to creating productive global conditions that can accommodate a stable bilateral relationship, and acting on this recognition, is fraught with underlying difficulties. For example, stability implies some degree of acceptance by Washington of status equality in their relationship, which undercuts the notion of all-encompassing U.S. primacy. It also requires Washington to accept that the post-Cold War U.S.-led global order at a minimum needs reforming. Both these ideas are difficult to stomach in the United States, and certainly in Congress where a bipartisan consensus has formed on the need to focus on containing the China threat. As scholars of American exceptionalism have argued, U.S. policymakers since the Second World War have shown a tendency to view the United States as the ultimate custodian of international order. This perspective has given many U.S. administrations what they have regarded as license to sometimes act extra-legally in defense of the existing order. It will be difficult to cast aside that hegemonic presumption.

In addition, critical issues exacerbate the tension in the China-U.S. relationship, and there are dangerous flashpoints associated with several of China’s unresolved sovereignty disputes. How the Taiwan issue is handled is key to any future stabilization of ties, but China also is at the center of other competing sovereignty claims affecting long-standing U.S. allies such as Japan and the Philippines. Beijing additionally has a different understanding from Washington of the status of the maritime routes that are involved in that contest. Public attitudes in each society display strongly negative sentiments toward the other side. In the United States these attitudes have deepened in the last few years as a result of the exposure of Beijing’s dire human rights record with respect to ethnic minorities in Tibet and Xinjiang. In China there is the perception of a lack of U.S. respect for its achievements and of a need to counter what it describes as a U.S. decision to “encircle, contain and suppress” the country and halt its ascendancy.⁴

Instability also derives from uncertainty about the trajectory of U.S. politics and policies as a result of widespread populist sentiment. The potential return to the presidency of a believer in the “America First” idea that led, during the Trump administration, to a far tougher stance toward the trade relationship with China, together with the United States’ breaching of international agreements and withdrawal from global governance organizations, cannot be ruled out. China is also experiencing a particularly challenging domestic environment that includes a sluggish domestic economy, high youth unemployment, and a sense that the external environment is one of turbulence and uncertainty rather than the stability that Beijing believes it requires to support its continuing ascendance.

The rise of China represents a challenge to U.S. interests and values. And many in China are reluctant to accept that the United States will ever be a neutral and necessary partner in the search for a politically stable and prosperous future for the party-state. Neither does China’s leadership want to see the United States persist in its role as a major security and economic actor in the Asia-Pacific. Given these potential and actual barriers to progress, it is difficult to be optimistic about the current quest to manage the stresses in the relationship.

A Global-Order Lens

China and the United States giving less attention to bilateral tensions and more joint attention to the rehabilitation of global order has something positive to offer in the search for the stabilization of their relationship. That rehabilitation would come with associated rules, norms, and institutions that define collective expectations of proper behavior and offer some degree of predictability and reciprocity to all political actors and not just Beijing and Washington. That focus on global order would also address the impatience of many countries with the way the China-U.S. geopolitical struggle, which is likely to continue, has reduced attention to other crucial policy agendas.

Adopting a global-order focus also allows for the exploration of areas of benefit to both states that come from aspects of China’s rise. The increased material capacity and political influence that China offers in the context of highly complex global issues resistant to solution could sometimes be used to good effect. There is no doubting China’s influence in countries in the Global South, especially in those that the United States has relatively neglected. Joint China-U.S. provision of global public goods could not only contribute to the sustainability of a world that faces many global governance challenges, it could also demonstrate that these two major states can move beyond narrow self-interest and instead act in ways that help stabilize a world of interdependence.

The depth and forms of such a coming together are not predetermined, and some plausible outcomes can be envisaged that reflect that variability. As Andrew Hurrell has argued, there are three distinct possibilities worth contemplating when it comes to global order, from its narrowest to more expansive forms.⁵

As the outcomes of current geo-political rivalries often suggest, the next few years may see the consolidation of a minimalist form of global order that relies on exercises of power and occasional coincidences of interest rather than on negotiated rules, norms, or common understandings. Such an order would do little to prevent violent conflict between China and the United States, or between their proxies, given the antagonistic framing on which it would be built. It would rest on a narrow conception of national interest and would not take account of global existential needs.

Alternatively, there may be a return to a pluralist order that privileges the preservation of the society of states through the regulation of violence, as well as a renewed commitment by major states to state sovereignty, territorial integrity, and noninterference in a state’s internal affairs. This state-based formulation appeals to many governments because of its familiarity and of the protective function this traditional understanding of sovereignty can perform. However, it does not fully reflect the world in which the China-U.S. relationship is embedded, which is one of interdependence, the diffusion of political agency to actors other than states, the normative trend in support of human rather than solely state security, and the inadequacy of nationally determined solutions in dealing with shared-fate issues.

A third alternative is an international society with a relatively high degree of consensus on core principles and negotiating processes among state, nonstate, and transnational actors involved in the governance of complex and urgent global-order issues. This seems a desirable alternative, but it may be too ambitious given current conditions, except in the event that shared-fate issues—most notably climate change—become recognized as so overwhelming as to demand such ambition. When it comes to the China-U.S. relationship, the hurdles to establishing such a consensus on core principles and to acceptance by a state-centric China of the prominent role allotted to nonstate actors would be difficult to overcome.

Incremental Building Blocks at the Bilateral Level

Despite the challenges noted, the second and third alternative versions of global order above are preferable to the first. They are better able to address what would need to be in place to arrive at a more stable order together with a more stable U.S.-China relationship within it. At the bilateral level the building blocks of that order would include:

• Regularized channels of communication to identify areas of common interest where progress is most likely to be made, together with a willingness to delink progress on those issues from others that generate high levels of discord. For example, China would have to tolerate continuing criticism of its human rights record as a part of any attempt to place a ceiling on the deterioration of ties, but the United States would have to give greater weight to the indivisibility of rights and to economic rights, in particular. The United States would have to accept that the Taiwan issue requires a renewed, demonstrated commitment that long-standing political understandings will hold, including its commitment to a one-China policy, while China would have to re-prioritize language and behavior related to peaceful resolution.
•  Willingness to establish achievable commitments that can be verified while in progress and on completion. For example, with the onset of the global financial crisis of 2008, China and the United States undertook to devise complementary macroeconomic policy interventions to tame some of its worst aspects. Implementation of agreements of this kind would demonstrate a reciprocal basis for the relationship and help build trust between the two countries. In global terms, they would enhance the likelihood of other political actors becoming convinced of the positive outcomes that would result from adding their weight to issues Beijing and Washington treat as some of the most critical global governance challenges.
• The United States prioritizing issues related to planetary survival as well as to ones that reduce the prospects for catastrophic conflict. In this regard, Washington would need to demonstrate acceptance that China has been playing and will continue to play a larger role in world politics, and that an overwhelming focus on policies designed to ensure a continuation of U.S. material primacy makes little sense in an era when leadership or legitimate authority rests on treatment of the survival issues that directly confront us all.
•  China reducing its U.S.-critical framing. Beijing would need to recognize that the regular translation of its global-order initiatives into attacks on aspects of U.S. foreign policy reduces their appeal. Instead, it needs to voice arguments and potential solutions in support of the demands for fairness that animate many peoples and states or that address current global governance challenges. Such U.S.-focused hostility also diminishes the prospects for cooperation with Washington in policy areas of significance to Beijing.
•  Agreeing to mutual non-subversion.⁶ China and the United States would have to accept that each has adopted a different politico-economic model whose preservation it prioritizes and that is unlikely to undergo fundamental transformation.

Building Blocks for Global Ordering

What are the commitments to global values and the specific areas of joint policy action by China and the United States that could form the basis of this ordering project? As noted above, reform of the core post-1945 institutions such as the United Nations and the Bretton Woods institutions is high on the list of demands by other actors. The World Trade Organization similarly needs to undergo major reform, including reestablishing some version of its Dispute Settlement Mechanism (DSM). Major states have been willing in the past to subject themselves to its adjudication, on the understanding that others may also later fall foul of trading rules that have later to be adjudicated. To date, China and other states have made use of the organization’s Multi-Party Interim Appeal Arbitration Arrangement to try to overcome the demise of the formal DSM.

Many other shared-fate issues have been identified: some appear more acute than others, some connect with and magnify other vital governance challenges, and some could benefit from the experience of previous periods when China and the United States found it possible to cooperate.

The one multilateral organization that could provide the overarching framework required to address these issues is the United Nations (UN). At present, it is facing particularly challenging circumstances and high levels of criticism. However, the normative standards outlined in the Charter of the United Nations, which have shaped the post-1945 global order, still provide aspirational goals. UN Specialized Agencies deal with topics such as development, health governance, nuclear-weapons proliferation, and climate change. The UN has built up vital peacekeeping and diplomatic services to address conflicts or to respond to humanitarian disasters. It has provided political space for actors other than states to put issues on the global agenda. The charter and recognition of the roles the UN has played in managing crises during the Cold War may provide a route to neutralizing or mitigating disagreements about the characteristics of a preferred future global order. They may also provide a common language that China and the United States find acceptable to adopt.

Beijing and Washington have committed themselves—in rhetorical terms at least—to the idea of a UN-centered order: one where they afford a more representative UN a larger role in the resolution or management of issues that are crucial to planetary survival. This might seem unlikely at a time of great dismay with regard to the UN’s ability to resolve some of the critical issues on its agenda, but that is a situation predominantly due to the disruptive condition of major-state relations and not to the scope of UN competencies. China and the United States arriving at a deeper appreciation of what a constrained UN has been able to achieve in the past could be a useful starting point for consideration of what it might be able to do in the future. In a positive development, high-level Chinese and U.S. officials have recently displayed a change in rhetoric in this direction.

U.S. Secretary of State Antony Blinken and U.S. National Security Adviser Jake Sullivan have affirmed that the UN Charter has the primary role in enshrining concepts such as self-determination, sovereignty, and the peaceful settlement of disputes, arguing that it represents a key set of norms that have helped manage relations between states and peoples and prevented some areas of conflict. In an article in October 2023, Sullivan promised that the United States “will work with any country prepared to stand up for the principles of the UN Charter.”⁷ In a 2022 speech on U.S.-China relations, Blinken described the UN Charter approvingly as one of the “founding documents” of the post-1945 order.⁸

Chinese official records also document a commitment to a global order based on the charter because of the UN’s standing as the world’s most “universal, representative, and authoritative inter-governmental international organization” that deals with the collective challenges facing the world.⁹ Beijing has also stepped up its material commitment to parts of the UN’s agenda, particularly in peace operations and economic development, and it has emerged as the UN’s second-largest funder of the UN’s regular and peacekeeping budgets.

China’s interpretation of the charter does not fully correspond with that of the United States, nor does Beijing actually give the UN such predominant importance when taking its most crucial foreign policy decisions. Neither does Washington. However, the charter is one of several international legal texts and treaties that could form the basis of a conversation between the two governments. More importantly, such a conversation could signal a desire on their part to move away from a perspective that sees global order as dependent on the types of major-state agreement that predominantly serve their national interests toward something that is more enlightened and system-preserving.

Three Specific Domains of Order Building

The process of building global order can be unpacked by separating order into a series of norms, rules, and standards in specific issue areas. Many scholars of global order support the proposition that there is no fixed rules-based order with clear demarcations. Instead, as Alistair Iain Johnston has argued, global order “yields a world of multiple orders in different domains,” some of which overlap and others are in tension.¹⁰ As noted earlier, some of these normative components of global order are particularly expansive because they connect or are interdependent with other major shared-fate issues. They can act as a gateway for discussion of other related issues that are similarly vital to many political actors, thus improving the prospects for developing a broader international consensus.

Three such issues or areas of negotiations are explored below, the first and second of which are likelier to lead to progress. All of these depend crucially on the outcome of the November 2024 election in the United States.

• Climate change could lead to further discussions about other matters of planetary and political concern. The climate emergency connects with, for example, forced migration, disrupted food and water supply, reductions in biodiversity, the increased prevalence of health crises, rising levels of poverty, and growing domestic and international economic inequality. It similarly affects energy security and energy transition.
  
  There also have been in the recent past some personalized and institutionalized structures in place for dealing with this issue that could encourage further China-U.S. cooperation in related areas. Over recent years, the two states’ attention to this topic has benefitted from the establishment of a strong and seemingly respectful relationship between the former lead negotiators: John Kerry for the United States and Xie Zhenhua for China. It remains to be seen what will happen after the 2024 election, given the certain change in administration. However, even with new negotiators on both sides, this personalized approach could be continued. Climate change has regularly appeared at or close to the top of the list that both governments mention when they look for examples of potential or actual cooperation. And there have been instances where agreement between them has given a boost to cooperative outcomes at the global level, the Paris Agreement being a case in point.
• Nuclear arms control is another area where China and the United States have found it possible either to cooperate in the past or to regard their positions as sufficiently intertwined to bring about consensus on several aspects of the non-proliferation regime. They worked closely together in 1998, for example, to condemn the nuclear tests conducted by India and Pakistan. They have both signed (though not ratified) the Comprehensive Test Ban Treaty, and they took part in the negotiations that led to the 2015 Joint Comprehensive Plan of Action to place a cap on Iran’s uranium enrichment program (only for the United States to withdraw from the agreement during the Trump presidency). We are now in an era in which China’s strategic capabilities have become far more sophisticated across all domains, and it has increased the number of its nuclear warheads. However, these developments could form the basis of a serious negotiation between the United States and China, built around Beijing’s fears deriving from growing U.S. damage limitation facilities—such as Theatre Missile Defense—and Washington’s concerns that China’s enhanced nuclear arsenal makes conventional warfare more of a possibility. Neither side, however, wishes to see any further weakening of the non-proliferation regime as statements on potential nuclear use in Russia’s war against Ukraine demonstrate. These developments could act as sufficient prompts for a future China-U.S. effort to revitalize serious discussion on this issue.
•  The regulation of artificial intelligence (AI), as a more recent issue, has only lately become a topic of bilateral discussion, starting in January 2024 with ensuring progress on the safety of artificial intelligence systems. AI is a domain of urgent concern with extensive negative and positive global-order consequences that could manifest themselves within a few years. Almost all AI technologies can have military and civilian uses; they can be vital to the spread of information needed to solve policy issues but also of misinformation; they can find the causes of many diseases as well as create new health threats. China and the United States are seen to have the leading edge over other countries when it comes to AI, and they are developing their respective domestic frameworks for governing it. Undoubtedly competition in the race for the development of high-level AI-related technologies will continue as a core feature of this relationship. However, both will also face a world in which AI can be a disruptive force in ways that many experts warn are not yet experienced or envisaged. Neither can AI be easily prevented from proliferating to a vast range of nonstate actors around the globe.
  
  The United Kingdom in November 2023 held an AI safety summit that included Chinese and U.S. representatives and led to signature of the Bletchley Declaration. The UN has sought to advance global cooperation on AI and in October 2023 it created a new advisory body tasked to look at the opportunities, risks, and best means of governing AI at the global level. This body also contains representation from China and the United States as well as from a wide range of state and nonstate actors from all continents. A negotiated China-U.S. consensus on some of the tasks given to this UN body could feed into it in the expectation that their joint contribution would boost the chances for global regulation. Although cooperation between them is difficult to envision, as Ian Bremmer and Mustafa Suleyman have argued,¹¹ Beijing and Washington may find common interest in slowing the proliferation of powerful AI systems that encroach on state authority. They may also see some benefits in jointly constricting the extent to which open-source software can benefit actors intent on inflicting massive global harm.

Conclusion

The current geopolitical rivalry between China and the United States imposes formidable constraints on a transition to a global order characterized by greater stability in their bilateral relationship. The domestic obstacles to progress in both countries are also considerable and rooted in the uncertainties associated with their respective political futures. For China, there is no designated successor to Xi, and the long-term, calculated spurring of nationalist sentiment in the population by the country’s leadership will be a major hurdle for any future leader who seeks a more productive relationship with the United States. For the United States, domestic polarization and the real prospect of the further strengthening of Trumpian sentiment, with all that portends for foreign relations and global order, similarly makes the search for stabilization of relations with China hugely challenging.

However, in reflecting on the recent past, some desirable features of China-U.S. relations in the context of global-order creation in the medium term suggest themselves:

• A commitment to regular communication channels devoted to uncovering the inherent and comprehensive nature of threats to global order and planetary survival from which neither China nor the United States can escape.
• A verification mechanism for joint commitments.
• An acceptance of equality of status not based on material power but on capacity to contribute to the management or resolution of shared-fate issues.
• A recognition that “islands of consensus” based on international legal and normative language could in turn form a language for diplomatic negotiation.

Were these features to be in place over an extended period—say, a decade—a degree of trust between Beijing and Washington could be rebuilt. With a more firmly institutionalized relationship, the two countries should be better able to withstand some of the tensions that are bound to arise between them. The expectations associated with the notion that the world is already in a new Cold War would abate, and with that deliberate actions to aggravate crises affecting the rival side to the point of potential conflict would be reduced. There might also be a possibility of moving beyond a cold form of coexistence—where states only engage in non-armed conflict underpinned by mutual deterrence, but do perceive war as a long-term possibility—to an acceptance that neither state represents an existential threat to the other.

The importance of these bilateral moves to global-order creation rests on the argument that this would allow greater space for the realization that the largest threats to humankind relate to planetary survival. One result of this realization would be the forms of followership by others that it might generate, based less on compulsion and more on evidence that China and the United States have acknowledged what the current conditions demand.

Notes

China and the United States have reached rough equivalence in terms of international economic power. They should thus compete steadily for global economic leadership over the next decade. This would partly replicate the Cold War in terms of widespread bilateral restrictions, efforts to maximize alliances, and periodic confrontations. But it would differ sharply in terms of continuing extensive economic interdependence and occasional, perhaps substantial, episodes of systemic cooperation.

This assumes that the two superpowers will learn to live with each other, with continuing tensions but without hostile interactions. It further assumes that President Xi Jinping remains in power in China, there is no armed conflict over Taiwan, and that there is no Donald Trump presidency in the United States.

China is a rising power, but it is also a risen power. On virtually all relevant metrics, its international economic power is roughly equivalent, if not superior, to that of the United States on a purely bilateral comparison (as is the case for some aspects of its military power). It will improve this relative position even if its economic growth is sharply lower than in the past at 3–4 percent annually, which would still be double that of the United States. Containment of Beijing is therefore not a feasible policy option for Washington even if it were desirable, which it is not. China is simply too large, too dynamic, and too important to most of the world for the United States to contain it as it did the Soviet Union. Today, the United States publicly denies that it is pursuing containment—but it needs to adopt such a policy and mindset in actuality.

China’s growing power can perhaps be seen most readily in the increasing international adoption, including by the United States, of some of its own preferred norms. Protectionist trade and investment policies are increasingly widespread and industrial policies are becoming commonplace. The democratic advances the world witnessed in the 1990s have been eroded by the rise of populism and authoritarianism worldwide. Without any explicit negotiations to rewrite rules and governance structures, China is increasingly molding international behavior.

There is unlikely to be any generalized decline in the international position of the United States. It is in fact likely to continue outpacing the other high-income countries, as it has since the end of the Cold War, while losing more ground to China and the other most successful developing countries. Given Beijing’s achievement of rough bilateral equivalence, however, Washington’s clout will depend even more heavily on maintaining and hopefully strengthening its alliances, especially in Asia. Its allies bring to the United States roughly the equivalent of its strength in GDP terms, doubling the potential power of the alliances as a whole.

China has demonstrated that it can resist bilateral pressure from the United States, but it abhors widespread multilateral attempts to isolate it. It will thus probably accelerate its efforts to broaden its network beyond the other rogue states (Iran, North Korea, Russia) and especially in the Global South.¹ Much of the competitive relationship between the two superpowers in 2035 will be determined by their relative success in winning support from India, which by then will clearly be the third-largest economy, Saudi Arabia and other Gulf Arab states, major Southeast Asian states (especially Indonesia), and to some extent the large Latin American states.

Much will depend on whether the United States can retain its decisive soft-power lead over China on major global issues, notably democracy and the rule of law, and can manage its alliance relationships successfully. This will in turn depend heavily on how the United States manages its internal problems: not only its economy but also, more broadly, its governance and politics. If domestic dysfunction continues, its appeal to the rest of the world and its ability to work constructively with other countries will erode substantially and a more hostile global pattern could well emerge by the mid-2030s, if not sooner.

Functional Decoupling

Among the greatest challenges to the relationship between China and the United States, and for the world, will be their finding ways to cooperate on the global issues that require effectively a G2 leadership. Climate change heads the list of these issues and there will be no solution even partially to that existential problem without decisive action by the United States (by far the top historical emitter of greenhouse gases) and China (by far the top current emitter). Future pandemics, and preparations to forestall them, form another vital issue.

So does maintaining a stable world economy. The cardinal question for the future of the global trading system is whether it will be based on the traditional preference of the United States and its allies for openness and rule of law or on China’s predilection for industrial policy and state management. Current trends are heading toward the latter as the United States and the West adopt parts of China’s approach. Regarding the international monetary system, the central issue is the preference for free-floating exchange rates, as favored by the United States and Europe, or for a heavily managed one, as favored by China and other Asian countries.

China’s egregious underrepresentation at the International Monetary Fund (IMF) and World Bank severely undermines the United States’ desire to keep these institutions and their doctrines at the heart of the global economy. China’s quota and voting rights in both—supposedly based on an objective formula reflecting countries’ importance in the world economy—are only one-third of that of the United States and an even smaller fraction of those of the European countries.

These challenges are especially acute because fundamental, and probably irreconcilable, differences between Beijing and Washington will almost certainly continue to prevail on a wide range of security, political, and values issues. The two superpowers will thus have to find a path toward functional decoupling: a process in which they cooperate where needed and disagree sharply elsewhere. Fortunately, the Trump and Biden administrations have acknowledged the imperative of cooperating as well as competing with China, and thus paved the way for an evolution of policy in this direction. Functional decoupling will largely mean separating economic and global public goods issues, about which cooperation should be feasible, from the confrontational security and values issues. It stands in sharp contrast to national decoupling, where the two countries would separate across all issues.

A minimum requirement for functional decoupling would be the establishment of effective communication between Chinese and U.S. officials at all levels from heads of state down. Such a thickening network can be expected to develop over the next decade as issues in the “cooperation” basket are identified and pursued. One precedent has been created, though not yet implemented, with the Phase One trade agreement negotiated by the Trump administration. Earlier examples can be found in the George W. Bush administration’s Strategic Economic Dialogue and the Barack Obama administration’s Strategic and Economic Dialogue.

A further stage in functional decoupling would be negotiations on some or all of the issues that most plague the China-U.S. relationship and, hence, the world economy. Beyond the global public goods issues mentioned above, the most difficult challenge is determining the dividing line between the security and economic dimensions of trade, technology, and investment. Virtually all quarrels over import barriers, export controls, foreign direct investment restrictions, and the like, turn on whether the category of concern legitimately raises security anxieties. First, the United States and its allies and, secondly, China will need to work out criteria and procedures for implementing such distinctions if they are to reach a stable relationship over the coming decade. An important step in this direction would be ending the current trade war between China and the United States, which can be done on a fully reciprocal basis that avoids any criticism on either side of “going soft” (see below).

Another constructive step in functional decoupling would be China and the United States joining one or more of the respective international economic institutions that the other leads, which should be feasible over the next decade. Both are members of the major global organizations but there are many important functional groupings to which one or the other does not belong. On development issues, for example, Washington could belatedly accept Beijing’s invitation to join the Asian Infrastructure Investment Bank (AIIB), and Beijing—as now the world’s leading lender to developing countries—could accept the entreaties of the West for it to join the Paris Club that negotiates rescheduling of these countries’ debt. As the world’s leading energy importer, China could also join the International Energy Agency, while the Organization for Economic Cooperation and Development could waive its rule that only full members can join that subsidiary. Such institutional interpenetration would carry symbolic as well as substantive implications that would reinforce the stated decisions of the two countries to institutionalize their systemic cooperation to at least a degree.

There are also plausible possibilities to do this at the regional level. The United States would have to resume serious trade negotiations in Asia including the topic of increased access to the U.S. market, if it is to remain relevant there. China would have to at least limit its objectionable trade practices (especially subsidies) if it is to avoid perpetuating trade and technology wars. One way forward would be for both countries to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), to which China has already applied. The United States was the main driver of the Trans-Pacific Partnership, its precursor, and Washington was very active in the CPTPP’s founding negotiations, inspiring many of its rules. Joining together would permit them to address some of their most contentious trade, technology, and investment issues in a multilateral context that might facilitate resolution, in contrast to their bilateral confrontations to date. Since Canada, Mexico, and most of the members of the Regional Comprehensive Economic Partnership already participate in the CPTPP, this would also represent a consolidation of economic relationships across the Pacific and sharply reduce the risk of economic conflict.

A China-U.S. G2?

The most important international institutional issue is the composition of a de facto steering committee for the world economy, and sometimes for more. The G7 is a useful caucus for high-income powers but lacks global legitimacy, given that it excludes China and any other emerging markets, while the G20 is much too large to be operational.

The most logical grouping from an economic perspective would be a G3 of China, the EU, and the United States, or a G4 adding Japan. But China would regard this as stacking the deck with U.S. allies (and as having to share leadership in Asia if Japan were included) and would be unlikely to agree. In addition, the EU continues to experience its perennial inability to speak with a single voice on many key issues, including macroeconomics and finance. Including another emerging market, which would have to be India, would dilute the group and bring in a rival to China, thus making negotiations very difficult. China would likely insist on a truly co-leadership position with the United States, which could only happen in a G2.

However, with the two countries soon to account for almost half of global economic output, there is no realistic alternative to the evolution toward a G2 of China and the United States, at least over the medium term, as deliberate steps in that direction would be needed much sooner.

Beijing and Washington have already done this on an ad hoc basis on occasion: rescuing the world from the global financial crisis in 2008–09 and avoiding the protectionist reactions that were widely feared; achieving major advances at the UN conferences on climate change in Paris in 2015 and Glasgow in 2021; saving the World Trade Organization (WTO) ministerial from failure in 2022. The George W. Bush and Barack Obama administrations actively sought a G2 (without calling it that) between 2006 and 2009. China eventually rebuffed this effort—like Washington later rebuffed Beijing’s invitations to join the AIIB and the Belt and Road Initiative (BRI)—at a time when its hubris and disdain for the United States peaked after the global financial crisis. But that tendency may have moderated now, with the slowdown in its economy and the United States’ strengthening of its Asian (and other) alliances, so a similar approach might be more successful, especially if pursued with full recognition of the need for functional decoupling.

Any China-U.S. G2 would have to be de facto or tacit rather than formal, at least for some time. This would be necessary for domestic politics in both countries and to avoid adverse reactions from their important partners. The latter should be engaged through concentric circles radiating out from the G2 through to G7, G20, BRICS, the IMF, the World Bank, and the WTO. Successful China-U.S. cooperation would clearly be in the interest of the rest of the world and, as noted, has already worked well in several specific settings.

One piece of low-hanging fruit that would bring about and symbolize such China-U.S. cooperation is ending their trade war, which has seen U.S. tariffs on most imports from China rising from 3 to about 20 percent and roughly equal Chinese restrictions on imports from the United States.² The Trump administration tariffs, which have been maintained by the Biden administration, and the Chinese retaliatory tariffs are costly for both countries and achieve no discernible benefits for either. China applied its tariffs in a carefully reciprocal manner so those on both sides could be removed without stimulating domestic charges of “softness” or “capitulation” (and in the United States Congressional approval would not be needed). No other single step would as dramatically indicate a new G2 effort to proceed pragmatically where the national interests of both countries would be served.

Would China Play?

Is China ready, over the coming decade, to move initially toward functional decoupling and subsequently toward a de facto G2 with the United States? Its behavior to date paints a mixed picture in this regard: it has done both on occasion, exhibiting encouraging global economic leadership at several key moments, and it has rejected both on occasion. Three related considerations could be determinative.

First, China may now be realizing that its aggressive foreign economic policy and overall foreign policy, as in the South China Sea, is producing a global backlash that jeopardizes its economy and priority development goals (and thus the domestic control of the Chinese Communist Party). Its economy could require cooperation from the United States and its allies to maintain its annual growth rate at the acceptable level of 4–5 percent.³ China has so far been unsuccessful in replacing its export/investment-led model with a domestic-demand/consumption-led model, and in its bid for technology leadership, without external expertise and financing. The international backlash will continue to grow, especially from its main economic partners (the United States, EU, and Japan), unless China moderates its objectionable policies. In particular, China should hope to defuse the aggressive pushback from Washington that encompasses direct controls on bilateral transactions, along with a growing coalition of countries adopting similar strategies.⁴

Second, China is belatedly seeking to broaden its international alliances to compete more extensively with the United States and its relatively robust alliance network, with the Global South as its primary target. But its strategies to do so—mainly through the BRI and BRICS—have not gone very far. A more constructive leadership posture, especially on international economic issues, is more likely to win converts than continued belligerence and deviations from international rules and norms.

Third, China may be realizing that it can better achieve its desired global economic leadership role by working within the existing system rather than challenging or disrupting it. So far, it has pursued coequal status with, or superiority to, the United States by operating simultaneously inside the Bretton Woods framework (for example, lending via the IMF and adhering to WTO decisions) and outside it (for example, through the AIIB and BRI). Linked closely to the previous two points, China may now decide to emphasize the “inside game” to achieve positive results such as equal status at the IMF and market economy status at the WTO and to minimize negative reactions, such as trade and technology controls.

All this suggests that China may be willing to adopt more internationally compatible economic policies—for example, regarding subsidies and intellectual property theft—and take on more consistent global economic leadership responsibilities in return for continuing ascendance toward co-leadership status and stronger ties with emerging markets. It thus seems plausible that over the coming decade it will be responsive to U.S. initiatives toward functional decoupling and even a G2. Even if confrontation and conflict over security and values issues persist, the result would be a healthier global system and a less dangerous relationship between the two superpowers.

Greater trust between the two will have to be realized to decisively head off descent into a new Cold War or worse. China will have to convince the United States that it does not to seek to oust it from its global economic leadership position but to share it. The United States will have to convince China that it does not seek to block its ascent to co-leadership. This will require both to modify their traditional and current views. A functional G2 that demonstrates pragmatic and effective cooperation on a growing set of issues, mainly economic, would represent major progress.

An Alternative Scenario: A Trump Presidency

Donald Trump returning to the presidency would add a huge degree of uncertainty to these already highly uncertain propositions.

First, he might disrupt U.S. alliances once again, just when they are desperately needed to face China. This could turn some countries, especially in Asia, neutral toward Beijing (Finlandization⁵) and even tilt them into its camp—strengthening China in its competition with the United States, perhaps decisively depending on how far Trump might go against Europe and in disrupting NATO, including by abandoning Ukraine.⁶ It could also tempt Japan, South Korea, and perhaps others to acquire nuclear weapons to protect themselves. The reduction in, or end of, concerted outside pressure on China to pursue constructive reforms, and Trump’s probable adoption of more Chinese-style policies, are unlikely to push Beijing in positive directions.

Second, Trump would almost certainly employ more confrontational and even hostile rhetoric toward China. He has floated plans to introduce a 10 percent tariff on most imports and a tariff of 60 percent or more on Chinese goods, which would escalate the trade war and spread it to the rest of the world.⁷ This might encourage China-bashing (and hostility toward Asian Americans) in the United States and make it increasingly difficult to avoid escalating actions against Beijing, with the Democrats and Republicans perhaps competing to be viewed as more hawkish. The prospects for cooperation, even on a limited set of essential issues like climate change (which Trump additionally denies is a problem⁸) would be greatly jeopardized, if not totally eliminated, and a new Cold War would probably set in fairly quickly.

Third, although Trump’s personal preferences related to Taiwan are not entirely clear, if he follows the trends in Republican strategic thinking about the issue, it is very possible that he might adopt a belligerent stance on the issues and thereby escalate tensions, maybe greatly, with China.⁹ Given the centrality of the issue to Beijing, all chances of improving the China-U.S. relationship would probably disappear, and the risk of direct hostility would rise.

Most importantly, polarization and dysfunction in the United States would undoubtedly escalate even further. The country’s soft power would erode substantially. America First could again produce America Alone, only more so as the fears of other countries that the United States could never again be a trustworthy friend, let alone leader, would seem confirmed.

Looking ahead over a full decade, a great deal would also hinge on what followed a second Trump presidency. Continued Trumpism, even if conducted in a more civil manner, could not overcome its negative impacts, especially if the domestic politics over China were poisoned permanently and if U.S. alliances were totally disabled. More cooperation with Beijing under a successor might be possible, but it would be an uphill battle in light of China’s gains and the potential loss of U.S. allies under Trump.

Notes