See the whole board
The United States and China play global economic and political chess games. There are many moves and defensive and offensive strategies, not only for trade but also for energy and natural resources (rare earths among the most recent flavors of discord), geopolitics (Russia, Ukraine, Iran, the Middle East generally), technology (Taiwan and AI), and global economic supremacy. It’s a long list, but China and the US drive the outcomes.
Each can grab short—and long-term gains, but unlike chess, mutual victory is possible. However, this is possible only if the U.S. and China understand each piece, all the potential moves, what can be sacrificed, and what victory really looks like. But this does not appear to be happening.
Bright Battle Lines
Instead of working for mutual benefit, regardless of fundamental cultural and political differences, we are now drawing bright lines demarking battle zones (Ukraine and Russia; Taiwan; AI and advanced technologies). The result will be economic and technical inefficiency and degradation in the quality of life, safety, and prosperity.
Since the 1990s, the benefits of engagement and cooperation for the US and China have been surprising and enormous. China has achieved astounding economic success, improving the lives of hundreds of millions of people in less time and more dramatically than anyone could have predicted.
Now, confrontation versus cooperation, disentanglement versus engagement, and the development of a bipolar world where the U.S. and China are adversaries and are forcing the world to “pick a side” will cause everyone to be worse off.
History Doesn’t End
“You overestimate your abilities to transform the world,” my Chinese colleague said to me in 1997, shortly after China’s takeover of Hong Kong. Many believed that Hong Kong would influence China more than China would influence Hong Kong. After all, freedom and prosperity go hand in hand and are irresistible desires for any country. This was “the End of History,” after all.
Not so much.
Western governments and political systems, specifically those of the United States, cannot simply write the rules for other major nations, especially China (and India), regardless of how compelling our model is to us. The US pressures China on trade, technology, resources, and other critical areas. There is a general belief that they will fold. This is even more misguided than the initial assessment of Hong Kong and China’s relationship in 1997. China is too strong and interconnected globally to kowtow to Western structures and demands simply.
Engagement and collaboration work.
Our relationships can be mutually beneficial, engaged, and collaborative. Our countries have forged relationships in politics, business, security, entertainment, and technology, and a positive trajectory seemed clear only a short time ago. Now, relationships on these dimensions are ruptured, and the depth and speed with which this has happened are startling. The relationship seems to be in free fall, destined to deteriorate, and the economic impact will hurt confidence and growth beyond each country’s borders.
The consequences seem beyond either government’s grasp.
Enchantment and Despair – A History of China and the US
Some tension has existed historically since the United States initially engaged with China. Beginning in 1784, when the first American merchant ship landed in China to trade ginseng for tea, the two sides have cycled through what John Pomfret, the author of “The Beautiful Country and the Middle Kingdom,” calls “rapturous enchantment followed by despair.” But the relationship always generated mutual benefits.
Buyers in Canton generated fortunes for the Astor and Delano families, and Christian missionaries built China’s first universities and hospitals. Then, the Cold War pulled the countries apart—the Chinese Communist Party feared “Coca-Colanization”—but eventually, the People’s Republic needed cash and foreign know-how. On December 13, 1978, Deng Xiaoping announced China’s Open-Door policy, inviting foreign businesses and encouraging Party members to “emancipate their minds.” Two weeks later, the first bottles of Coke arrived. Coca-Colanization began with Deng’s encouragement.
Political and economic engagement with China was believed to make it more profitable and liberal eventually. Despite China’s flagrant abuses of intellectual property and human rights, the strategy enabled the most significant trading relationship between any two countries globally, with an estimated 70,000 American companies doing business in China today.
In 2005, the George W. Bush Administration loosened visa policies, encouraging a massive influx of Chinese students, who still make up the largest group of foreign undergrads in America (although current immigration policy will change this). Microsoft opened a 500-person research center in Beijing, its biggest lab outside the United States.
In speeches to Americans, Communist Party officials said, “There is some of me in you, and some of you in me.”
If only…
A New Cold War
However, it appears the United States government wants none of that now. Political and economic integration has morphed into uncoupling with China. The belief now is that China will bring down the United States, not that the two can help each other build and reach greater heights through cooperation.
A fringe position of confrontation – pushing factories to leave China, reducing the flow of students and technology – has gained surprising support among politicians and businesses and is now mainstream thinking. Instead of a message of growth and opportunity, the narrative has become China as a warmonger hellbent on annexing Taiwan – and disrupting global technology and economic development and innovation, Chinese hackers stealing trade secrets, Chinese officials forcing American companies to hand over technology, and the state subsidizing Chinese rivals. It is now impossible to compete. Roundups of human-rights lawyers, activists, and ethnic minorities do not help, and it is hard to ignore the combination of all of this.
“Trade Wars are Good and Easy to Win”
This kind of nonsense serves no one well. On top of that, China is now talked about as if they are comparable to such sworn enemies of America as Iran and the Soviet Union and argues that only hardline pressure can “crush” its expansion.
The relationship has deteriorated in recent months, creating a belief that each side is a permanent adversary to the other. Engagement may be abandoned, but there is no strategy to replace it. This kind of shallow reactionary thinking will make both countries worse off.
Contained No More
China is not an existential menace despite the analogies of the United States’ struggle with the Soviet Union and a “new Iron Curtain” gaining in popularity. There are lessons to be learned, but preparing for confrontation is not one of them. The diplomat George Kennan, when discussing choices regarding responses to the Soviet Union, recognized that there is a middle ground between appeasement and world war – “firm and vigilant containment of expansive tendencies.” Kennan’s containment theory became America’s defining strategy in the Cold War. Today, there are calls for a similar containment strategy for China.
It won’t work.
China is too rich and intertwined with the American economy to be contained, and neither country wants to see its counterpart impaired. Each seems most alarmed by alarmism itself. The leaders of both countries are hasty, intransigent, and not very well-informed about the other side’s goals.
The U.S. wants to preserve its influence and balance trade, while China seeks, above all, to expand its power. These changes are happening quickly, and if there is an overreaction, the results can be disastrous. Timing matters. It’s being ignored, creating mistrust and conflict.
In chess, assume your opponent will make its best – or least worst – move. Neither China nor the U.S. is doing either.
Absolute Control…Maybe
China is not a monolithic power, and we shouldn’t react as if it were. Risks are everywhere: a precarious economy, an aging population, an Arab Spring-style revolt recently in Hong Kong (not easily forgotten), and an ethnic insurgency in the far West despite draconian countermeasures. The party is trying to understand how to manage these increasing issues and reacting with absolute power as its only strategy.
If the United States reacts too strongly, we reinforce this tactic to everyone’s detriment because it will create separate, competing economic and political blocs – a two-centered world. An “either you’re with us or against us” forced dichotomy is simple-minded stupidity and disastrous.
China has invoked its status as a “developing country” to erect barriers against foreign competitors and to coerce American companies into sharing technology. Eventually, those practices turned some American businesses from ardent advocates for good relations into fierce critics. When China joined the World Trade Organization in 2001, it agreed to a schedule for dropping tariffs and opening markets. But that schedule ended in 2006, as did any momentum toward opening. Fragmentation and self-interest overwhelm any approach to open markets and drop tariffs. Policy to do the opposite is now dominant.
My Technology Wins
These days, the most acute standoff between the two countries is over who will dominate the next generation of technologies, especially AI and access to the most advanced chip hardware. Until recently, executives in Silicon Valley tended to belittle China’s potential in tech, arguing that rigid controls in politics and education would constrain radical innovation. But that view no longer prevails. Under Made in China 2025, Beijing has directed billions in subsidies and research funds to help Chinese companies surpass foreign competitors on such frontiers as AI and machine learning, electric vehicles, and robotics.
DeepSeek, BYD, CATL, SMIC, and Alibaba are examples of success. Although its success at surpassing the U.S. is still questionable, unprecedented resources, combined with vast intellectual capital, are being applied to this strategy.
China’s technological gains should alarm Silicon Valley and its competitive priorities. The U.S. does not have a 5G alternative to compete with China, a failure that cannot be blamed on spying or any other political scapegoat. If America does not compete with China’s technological advances, it risks technology Balkanization and losing influence in many key areas of new technological development.
We’re Still a Couple
A complete decoupling between the US and China is implausible. The total revenue of US companies and affiliates in China is over $600 billion, so decoupling is not a plausible option.
So, what is?
It’s Not Simple
China is just evil. It has totalitarian dictatorship, oppression, no human rights, and suffering.
That’s not right; there is much more going on. It’s not perfect; it is a complex and alternative system. In China, social progress is genuinely getting better for most people despite the problems. It’s more of a battle of narratives about values.
Xi Jinping has called it “a new option for other countries and nations who want to speed up their development while preserving their independence.” He has found some fertile markets for that view in an era when President Trump has reduced aid spending, separated children from parents at the border, and called migrants “animals.”
Yet, China’s sprint for soft power has not been that successful. The scale and posture of its new power have aroused a backlash, even in places where it offers the Belt and Road Initiative, a global infrastructure push that China has committed, depending on which estimates you believe, between $1 trillion and $9 trillion (more extensive than the Marshall Plan).
Once-welcome Chinese investment is now “a new version of colonialism.” Projects worth almost $100 billion are being canceled. Countries like Pakistan and Malaysia want to avoid the fate of Sri Lanka, which defaulted on heavy Chinese loans and eventually agreed to give Beijing control of a major seaport for 99 years. Four other seaports in Asia are equally at risk.
Is the U.S. Right?
Americans think that free speech and freedom of the press are fundamental for people. However, Chinese culture believes that the community and the country are higher priorities. Most ordinary Chinese people don’t understand why democracy is important for America. “Yes, America brings democracy to Iraq, to Afghanistan, to other countries. But these countries are getting killed now.” China is not democratic, but it is a peaceful country with good living standards – so says China’s state media.
Is It Over?
China and America are moving steadily toward a separation that is less economic than political and psychological. But, as Henry Kissinger puts it, “We’re dealing with a multipolar world. The components of an international system are so much more varied, and the lineups are much more difficult to control.” Like a good chess game, it has many subtle components and variations that make meaningful differences – although it continues to be poorly played by both parties.
Make a Good Move
The trade war is an ominous signal; economic polarization creates two big blocs confronting each other. History has shown us repeatedly that global conflict, whether economic or military, does not end well. No leader wants to suffer those consequences in retrospect. It’s time for the leaders of each country to see this now.
The most significant risk on each side is blindness born of ignorance, hubris, or ideology. If the Trump Administration were to gamble on national security the way that it botched predictions on trade, the consequences would be grave; if Xi embraces a caricature of America determined to exclude China from prosperity, he could misperceive this as his “maximum moment.”
The most viable path ahead is an uneasy coexistence founded on a mutual desire to “struggle with but not smash” the relationship. Coexistence is neither decoupling nor appeasement; it requires deterrence and candor—a constant reckoning with what kind of change America will and will not accept.
Success hinges not on abstract historical momentum but on hard, specific day-to-day decisions – what the political scientist Richard Rosecrance, in his study of the First World War, called the “tyranny of small things.”
Just Admit It
China must acknowledge the outrage caused by its overreaching bids for control, and America must adjust to China’s presence without selling honor for profit. Competition is not us-or-them; reality is us-and-them. The U.S. semiconductor industry gets 30% of its revenue from China. China’s resulting products service the world, and China’s producers need the U.S. as well. If allowed, such examples of mutual benefit will proliferate.
It is naïve to imagine wrestling China back to the past. The project, now, is to contest its moral vision of the future. Connected, collaborative engagement is the only practical way. China has come a long way, and its trajectory cannot be ignored or dismissed. The U.S. and China will be much better off from this more enlightened, realistic perspective.
See the whole board.