The U.S.-China rivalry signals a looming showdown, upending global power dynamics across economic and military spheres.
U.S.-China strategic rivalry is the primary feature of a new geopolitical era, one that closes the door on the so-called unipolar moment when the United States was the only world power, an era that existed from the end of the Cold War in the early 1990s to the closing years of the 2010s. The strategic rivalry between the United States and China has increasingly defined the global geopolitical landscape in recent years, with the world starting to reorganize into antagonistic geopolitical camps. This competition is unfolding across various dimensions, including economic, technological, and military spheres, with its roots entrenched in economic competition, trade wars, and an intensifying battle for technological supremacy. This rivalry has also led to a severe downturn in mutual sentiment between the peoples of each country.
To begin, a brief overview of the history of the bilateral relationship is instructive. U.S.-China contact has always been primarily motivated by trade and began in 1784 when the American ship Empress of China docked in Guangzhou, marking the start of exchanges between the two nations. The newly independent United States sought Chinese tea, porcelain, and silk, exchanging them for fur, ginseng, and cotton. While this mission broke Great Britain’s tea monopoly, trade was skewed in China’s favor due to high demand for Chinese goods in the United States and limited demand for American goods in China, aside from silver. The Qing Dynasty’s Canton System restricted foreign trade to the city of Guangzhou and imposed high tariffs, with the imperial authorities only accepting payments in silver. This drained U.S. reserves of the metal and highlighted China’s dominant global economic position, which informed its ambivalent approach to foreign trade, as its self-sufficiency in natural resources meant it was not dependent on the outside world, which it largely regarded as backward and inferior. Early American views on China, on the other hand, largely centered around consumer demand for its luxury products, the cumbersome and expensive trade of which brewed resentment among American merchants and policymakers towards China.
Trade dynamics shifted after China’s defeat by the British in the First Opium War in 1842, which forced it to open more ports to foreign merchants. This subsequently led to the first treaty between China and the United States, the 1844 Wangxia Treaty, granting American merchants trade rights equal to their British counterparts. This shift marked the beginning of China’s so-called “century of humiliation,” which brought about the end of its more than two millennia-spanning imperial system and hegemony in Asia, destroying its status as Asia’s preeminent power. As Chinese power waned, other Western powers and Japan began to carve up its territory, including in a Second Opium War that saw minor but direct hostilities between the United States and China. In subsequent decades, the United States sought to preserve China’s territorial integrity to prevent its own exclusion from the China market and total domination by the other outside powers. Meanwhile, American missionaries began flocking to China, making lasting impacts on Chinese education and healthcare, creating a legacy of both goodwill and resentment that is emblematic of the relationship to this day. The collapse of the Qing Dynasty in 1912 brought about severe upheaval that limited interactions for a time, but the United States supported the nationalist government that soon found itself in a civil war against Mao Zedong’s communists. During World War II, the United States and China were allies against Japan – which also saw a pause in the civil war – but post-war, the Chinese civil war resumed, culminating in communist victory in 1949, setting the stage for future U.S.-China relations that had already oscillated radically between cooperation and hostility.
The United States refused to recognize the newly victorious People’s Republic of China, instead recognizing the Republic of China, which had fled to Taiwan for exile, perpetuating the civil war on paper if not in practice (which has technically never been resolved). The erstwhile World War II allies thus soon found themselves on opposite sides of the emerging Cold War, leading to decades of hostility and estrangement and the quick emergence of a hot war on the Korean Peninsula from 1950 to 1953. The United States and China engaged in direct hostilities with one another in defense of their respective Korean allies — South Korea for the former and North Korea for the latter — which resulted in splitting the two Koreas into a new status quo that endures to this day, marking the only major armed conflict between the two to date. The risk of repeating a similar situation arose in the Vietnam War the following decade, with the United States ambivalent to invade North Vietnam for fear of Chinese intervention, which likely had a determinative impact on the outcome of that conflict.
Still, the military victory of China’s ally in Vietnam was not emblematic of a broader shift in favor of global communism. To the contrary, an opportunity for rapprochement between the United States and China presented itself in the form of the Sino-Soviet split, a geopolitical rift that began emerging in the late 1960s within the communist world between China and the Soviet Union, driven by ideological differences and divergent national interests. Perhaps ironically for China, this meant it was now antagonistic to the newly established Socialist Republic of Vietnam that it was instrumental in creating because Vietnam aligned itself closely with the Soviet camp. The United States and China’s mutual interest in opposing the Soviet Union led to U.S. President Richard Nixon’s pioneering trip to Beijing in 1972, where he met with Chinese leader Mao Zedong. This mutual interest and China’s broader diplomatic isolation drove a slowly unfolding normalization process that culminated in 1979 with U.S. recognition of the PRC while ending recognition of the ROC. These developments rendered the United States and China largely strategically aligned for the duration of the Cold War, exemplified by both countries’ enduring hostility to Vietnam, which China also invaded in 1979, and neither country recognized until the post-Cold War era (in China’s case, it restored recognition in 1991). For the United States, geopolitical interest drove rapprochement, but the massive economic opportunities afforded by normalization sustained it.
Doing business in the China market became exceptionally lucrative for U.S. companies. The 1980s and 1990s saw rapid economic growth in China, driven in large part by reforms initiated by Chinese leader Deng Xiaoping, who opened the country to foreign investment and trade in earnest following Mao’s death, a critical ideological shift enabling the bulk of the economic relationship. The United States became a key partner in China’s economic development, with U.S. companies investing heavily in Chinese manufacturing and the U.S. market becoming a top destination for Chinese exports. This period saw China integrate into the global economy, culminating in its accession to the World Trade Organization in 2001. The relationship was not without its bumps, as the 1989 Tiananmen Square crackdown led to widespread condemnation from the United States and resulted in a temporary freeze in high-level diplomatic engagements. Nonetheless, emblematic of the relationship’s key drivers was that economic cooperation continued and deepened despite this issue and others. Ultimately, ideological divergences during the Cold War came to mean little in subsequent decades, eclipsed first by mutual antagonism to the Soviet Union, then by the promise of fortune in the China market. Nonetheless, China’s meteoric rise has put it on a collision course with U.S. power, with Western assumptions that a wealthier China would become a more liberal one proving naive, at best. This dynamic has led to a new era of strategic rivalry as a newly emboldened and powerful China seeks to at least equalize, if not overtake, the United States.
Developments in recent years have significantly impacted the dynamics of the U.S.-China strategic rivalry. The COVID-19 pandemic, for instance, highlighted vulnerabilities in global supply chains and accelerated efforts by both countries to reduce dependence on each other while causing friction in international relations, exemplified by a bottoming out of relations between China and Australia after the latter called for an official investigation into the origins of COVID-19 (which emerged in Wuhan, China), an investigation that never materialized. The pandemic also intensified technological competition, particularly in areas like biotechnology and digital infrastructure. Reconfiguring global supply chains has led to phenomena such as so-called “decoupling” (a reference to separating the economies of the two countries), “near shoring” (placing manufacturing closer to the end user, implicitly not in China from the U.S. perspective), and “friendshoring” (placing manufacturing in friendly countries, again implicitly not in China).
The U.S. Biden administration’s approach to China has involved building stronger regional alliances to counter China’s growing clout and influence. This has included initiatives like the Quad (a strategic partnership between the United States, Japan, India, and Australia) and AUKUS (a security pact between the United States, United Kingdom, and Australia that seeks to deliver nuclear-powered submarines to Australia and serve as a forum for collaboration on emerging technologies such as hypersonics, quantum computing, and artificial intelligence), which aim to strengthen regional security and technological collaboration. Additionally, ongoing tensions in the South China Sea and Taiwan Strait have underscored the strategic dimensions of the U.S.-China rivalry. China has responded to these dynamics by deepening partnerships with Russia and Iran (while Russia has likewise deepened security collaboration with North Korea and Iran) and competing for influence among neutral countries in strategically vital regions like South Asia, Southeast Asia, and the Pacific Islands.
Despite the Cold War proving rather anticlimactic in terms of U.S.-China ideological rivalry, that dimension remains a part of the ongoing competition. China is driven to prove the superiority of its system over conventional Western liberalism, with the United States motivated to do the same vis-a-vis China’s system. This is highlighted by disagreements and conflicts over China’s treatment of Hong Kong in recent years — where Beijing has acted to limit the territory’s sovereignty through various legislation — and over Xinjiang, where the United States alleges China is committing crimes against humanity against the local Uyghur ethnic minority and other Central Asian ethnic groups that predominantly practice Islam.
The economic competition between the United States and China has been a central element of the evolving rivalry, with trade wars and tariffs becoming prominent tools of this contest. The U.S.-China trade war, which began in earnest in 2018 under the Trump administration, marked a significant escalation in economic hostilities. The United States imposed tariffs on billions of dollars’ worth of Chinese goods, citing issues like intellectual property theft, forced technology transfers, and the trade deficit between the two nations. China responded with tariffs of its own, leading to a tit-for-tat escalation that disrupted global supply chains and increased costs for consumers and businesses worldwide.
Despite the Phase One trade deal signed in January 2020, which saw China agree to increase purchases of U.S. goods and services, the fundamental issues driving the trade conflict remain unresolved. The Biden administration has largely maintained these tariffs, with some modifications, signaling that the economic rivalry is far from over and will continue under either another Donald Trump presidential administration or a Kamala Harris-led United States when the new U.S. president is inaugurated in January 2025. The trade war has also spurred both countries to seek greater economic self-reliance, largely through reconfiguring global supply chains, with China focusing on its “dual circulation” strategy that aims to reduce dependence on foreign markets while boosting domestic consumption.
The competition between the United States and China has increasingly shifted towards technology and innovation, with both nations vying for leadership in critical areas such as 5G, artificial intelligence, renewable technologies, electric vehicles, and semiconductors, among others. This technological rivalry is not just about economic dominance and control of supply chains — though that plays a large motivating role — but also about gaining strategic advantages in national security (as these technologies have key defense applications) and global influence (since demonstrating technological prowess to foreign nations is a means of soft power and coalition building).
One of the most visible fronts in the U.S.-China technological rivalry has been the race for 5G dominance. China’s Huawei has emerged as a global leader in 5G technology. However, the United States has raised concerns about Huawei’s ties to the Chinese government and the ruling communist party, arguing that the company’s equipment is outfitted for espionage and surveillance. This led to the United States banning Huawei from its 5G networks in a series of moves from 2019 to 2020 and pressuring its allies to do the same. The United Kingdom, Australia, Canada, New Zealand, Japan, Sweden, India, and France have all similarly taken at least some measures to restrict the proliferation of Huawei technologies in their countries.
The United States has also implemented export controls that severely restrict Chinese access to key technologies, including semiconductors, which are crucial for 5G infrastructure and military technology, targeting companies such as Huawei as well as SMIC, China’s largest semiconductor manufacturer. As a result, Huawei’s global market share has declined, but China has continued to push forward with its 5G rollout, aiming to cover much of the country with 5G networks. Meanwhile, the United States has worked to strengthen its own 5G capabilities, investing in domestic firms and collaborating with allies to develop alternative 5G solutions.
Artificial intelligence is another critical area where the United States and China are competing for supremacy. Both countries recognize AI’s potential to revolutionize industries, military capabilities, and economic productivity. China has outlined ambitious goals to become the global leader in AI by 2030, supported by significant government investments and a large pool of data vital for AI development. In these areas, China has a seeming advantage. The United States, however, remains a leader in AI research and innovation, thanks to its strong academic institutions, private sector investments, and global talent pool. The rivalry in AI is not just about technological innovation but also about setting global standards and norms for AI use, which will shape the future of the technology that has the potential to reshape the world. As such, whichever power can most influence AI use cases, regulations, and industry norms will reap substantial geopolitical advantages.
At the same time, semiconductors are the backbone of modern technology — powering everything from home appliances to vehicles to smartphones to supercomputers — and the U.S.-China rivalry in this sector has become increasingly pronounced. The United States has historically dominated the semiconductor industry, an advantageous position made stronger by close collaboration with other traditional semiconductor powerhouses like Taiwan, South Korea, and the Netherlands, but China has been rapidly building its capabilities, recognizing the strategic importance of semiconductors for economic and military prowess. The United States has sought to strengthen its semiconductor industry through initiatives like the CHIPS Act, which provides funding to support domestic semiconductor manufacturing and research. U.S. export restrictions likewise focus on semiconductors to prevent China from achieving breakthroughs that could allow it to reach technological parity in this field, such as 5nm and below and advanced logic chips. In response, China has accelerated its efforts to develop a self-sufficient semiconductor industry, investing heavily in research and development and seeking to reduce its reliance on foreign technology, and has still managed to achieve advancements in the industry despite U.S. efforts to curb its capabilities.
The military balance between the United States and China is a critical factor in their strategic rivalry. The United States has long been the dominant military power globally, with a network of alliances and military bases that ensure its influence across the world. However, China’s rapid military modernization over the past two decades has significantly altered the strategic landscape, particularly in the Asia-Pacific region, though not yet beyond, especially as U.S. coalition building has proven instrumental in keeping China contained within the so-called first island chain, a geopolitical concept consisting of a series of islands that stretch from the Japanese archipelago, through Taiwan, and down to the Philippines and Borneo.
China will find it difficult to assert credibility as a global military power if it is unable to project maritime power beyond the first island chain. As such, it is no surprise that China’s military expansion has been most evident in its growing naval capabilities. The People’s Liberation Army Navy (PLAN) has rapidly expanded, both in terms of the number of ships and technological sophistication. China now boasts the largest navy in the world by the number of ships, including advanced destroyers, aircraft carriers, and submarines, though it still trails the United States in terms of high-end hardware; for example, the United States has 11 active-duty aircraft carriers, while China has three.
This naval expansion is a central element of China’s strategy to project power and assert its claims in the Asia-Pacific region, particularly in the South China Sea. In response, the United States has sought to maintain its military dominance in the region through various means. This includes the deployment of advanced military assets, such as aircraft carrier strike groups and stealth bombers, to the Indo-Pacific region. The U.S. has also invested in new technologies and capabilities, such as hypersonic weapons and missile defense systems, to counter China’s growing military power. Since Philippine President Ferdinand Marcos Jr.’s 2022 election victory, the Philippines has undergone a substantial pivot back into the U.S. camp, allowing a de facto basing arrangement that gives U.S. forces exclusive access to nine military facilities in the country, including several in near proximity to and facing the hotspots of the Taiwan Strait and South China Sea.
The United States has increased its military presence in the Indo-Pacific region, building mutually reinforcing partnerships with the likes of Japan, South Korea, Australia, the Philippines, and Taiwan, and to a lesser extent India, Indonesia, and Vietnam, while China has continued to assert its claims in disputed territories, raising the risk of conflict. U.S. diplomatic efforts have yielded significant fruit, highlighted by a trilateral arrangement between the United States, Japan, and South Korea. Though driven primarily by South Korean President Yoon Suk-yeol, Japan-South Korea reconciliation marks a historic pivot in the region with the United States acting as matchmaker, reflecting the growing threat perceptions not only in Washington but also closer to China’s shores among most of its neighbors, who are significantly increasing military spending and rapidly arming.
Despite these efforts, the military balance in the Asia-Pacific is becoming increasingly contested. While the United States still maintains significant advantages in areas such as air power and global reach, China’s ability to challenge U.S. military dominance in its near seas is growing. Moreover, competition continues to evolve in the Indian Ocean, as China now maintains six to eight warships there after having no military presence just two decades ago. This shifting balance of power has significant implications for the strategic rivalry between the two nations, as it raises the risk of military confrontation, particularly in the context of Taiwan and contested areas like the South China Sea.
The PRC’s foundational policy of eventual unification with Taiwan also poses a risk, given that the use of force remains on the table. It is likely that Chinese leader Xi Jinping regards the Taiwan issue as central to his legacy, which, when combined with the potential strategic benefits of taking Taiwan — including breaking the U.S. hold over the first island chain and potentially seizing Taiwan’s world-class semiconductor sector — increases the likelihood of an invasion.
However, China is not yet ready for an invasion. The 2022 Russian invasion of Ukraine is instructive in this respect because the sanctions applied to Russia by the West and its partners subsequent to the invasion would be more devastating for China by orders of magnitude. While Russia is self-sufficient in energy and food, the sanctions it is experiencing are difficult but ultimately manageable. China, on the other hand, is a net importer of both energy and food, with trade disruptions posing a significant risk of food and energy shortages. One singular waterway also has massive strategic implications: the Malacca Strait, lying between the Malay Peninsula to the northeast and the Indonesian island of Sumatra to the southwest. A blockade of this critical waterway by an adversarial navy in an armed conflict scenario would cripple Chinese trade.
As such, China is constructing a network of ports and inland infrastructure to minimize the criticality of the Malacca Strait, largely accomplished through the Belt and Road Initiative. A non-exhaustive list of relevant projects is as follows: Ream Naval Base, a deep-sea port in Cambodia; the Funan Techo canal, a canal in Cambodia giving it direct access to the sea; Kyaukphyu, a deep-sea port in Myanmar; Hambantota, a deep-sea port in Sri Lanka; Gwadar, a deep-sea port in Pakistan; and Khalifa, a deep-sea port in the United Arab Emirates. Other projects are under consideration, such as the Kra landbridge, which would circumvent troublesome Southeast Asian waterways by splitting the Kra Peninsula in Thailand and allowing oceangoing vessels to cross it.
All of these projects could conceivably host Chinese warships, but China has thus far not shown strong indication that it is willing to deploy significant assets in permanent basing situations abroad. The Port of Doraleh in Djibouti is China’s only official overseas military base, which opened in 2017. In this sense, it does not come close to matching the United States in terms of global reach, but it may not want to, instead applying a tighter focus to particular strategic goals like circumventing the Malacca Strait.
Therefore, China will not likely launch an invasion of Taiwan in the near term, but the extent of both its military modernization and its ability to link logistical networks to itself over inland Eurasian routes will play critical roles in terms of its readiness, at which point an invasion will become far more likely, though, as should be noted, far from inevitable. Given this reality, the United States is prioritizing deterrence in the region to forestall a war in the first place.
The South China Sea is one of the most contentious flashpoints in the U.S.-China strategic rivalry. China claims almost the entirety of the South China Sea as its sovereign territory, based on the so-called “ten-dash line” (changed on maps from the “nine-dash line” in 2023), a demarcation line not recognized by international law, as demonstrated by a 2016 international arbitration decision determining that China’s claims are invalid. China’s claims overlap with those of several Southeast Asian nations, including Vietnam, the Philippines, Malaysia, and Brunei, leading to a series of territorial disputes. However, only the Philippines and Vietnam have actively contested Chinese claims in recent years, with the Philippines significantly intensifying its assertiveness over its own claims during the Marcos administration.
To assert its claims, China has engaged in an extensive campaign of island-building and militarization in the South China Sea. Since 2013, China has constructed artificial islands on previously submerged reefs and rocks, equipping them with military facilities, including airstrips, radar systems, and missile batteries. These actions have transformed the South China Sea into a heavily militarized zone, allowing China to project power beyond its shores and bringing its strategic influence closer to the critical Malacca Strait.
The United States has strongly opposed China’s actions in the South China Sea, viewing them as a challenge to international norms and freedom of navigation. In response, the U.S. conducts regular Freedom of Navigation Operations (FONOPs), sending naval vessels through disputed waters to challenge China’s maritime claims and support the counterclaimants, primarily the Philippines. These operations are designed to demonstrate that the United States will not accept Chinese control over the South China Sea, though it remains unlikely either party is interested in a potential world war over what are mostly uninhabited islands, reefs, and features.
Nonetheless, over the past year, the South China Sea has emerged as a more active hotspot than the Taiwan Strait, with regular clashes between Chinese and Philippine maritime forces over their countervailing territorial claims. These skirmishes, which typically involve boat rammings, pointing military-grade lasers, and deploying water cannons, have thus far stayed below the threshold of an “armed attack” that would trigger U.S. intervention per the terms of the 1951 Mutual Defense Agreement between Washington and Manila. As such, China is motivated in this context primarily by two things: to demonstrate to the Philippines that the United States is not a reliable partner that will protect it, and to discourage Philippine sovereignty claims and actions that reinforce it, such as by trying to get the Philippines to withdraw its small marine contingent from the disputed Second Thomas Shoal. These dynamics are likely to stay within the so-called “gray zone” of warfare, though unintended incidents or fatalities could alter this dynamic and spark escalation.
The U.S.-China strategic rivalry is likely to intensify across multiple fronts, with significant implications for the global order. In the economic sphere, both countries are likely to continue pursuing policies aimed at reducing their economic interdependence while seeking to build stronger ties with other countries that are frequently mutually antagonistic. This could lead to the fragmentation of the global economy into competing blocs, with the U.S. and China at the center of each. This is exemplified by international organizations such as BRICS (an acronym for its first five members: Brazil, Russia, India, China, and South Africa). The group aims to enhance cooperation and foster economic, political, and cultural exchanges among its member countries, with high ambitions such as developing an alternative to the U.S. dollar, with the U.S. currency’s continuing global dominance being a point in Washington’s favor. BRICS is likewise attracting new members, with countries like Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, Malaysia, and Thailand joining, committed to joining, or likely to commit to joining.
However, there are still vectors for cooperation, and the difficulties of complete decoupling reduce the likelihood of armed conflict. Areas of cooperation where the two countries could find common ground include actions addressing climate change, nuclear proliferation, combating drug trafficking, space exploration, and counterterrorism, though it is true these vectors are also tenuous and depend on broader goodwill in the bilateral relationship to be viable. At the same time, decoupling such comprehensively tied economies will not only be long and arduous, but doing so completely might also be impossible, or at least impossible within a reasonable timeframe. These factors all point to intensifying competition and geopolitical tensions, though a forecast leading to direct conflict between the world’s two strongest countries is not yet a clear or inevitable one.
The U.S.-China rivalry signals a looming showdown, upending global power dynamics across economic and military spheres.
U.S.-China strategic rivalry is the primary feature of a new geopolitical era, one that closes the door on the so-called unipolar moment when the United States was the only world power, an era that existed from the end of the Cold War in the early 1990s to the closing years of the 2010s. The strategic rivalry between the United States and China has increasingly defined the global geopolitical landscape in recent years, with the world starting to reorganize into antagonistic geopolitical camps. This competition is unfolding across various dimensions, including economic, technological, and military spheres, with its roots entrenched in economic competition, trade wars, and an intensifying battle for technological supremacy. This rivalry has also led to a severe downturn in mutual sentiment between the peoples of each country.
To begin, a brief overview of the history of the bilateral relationship is instructive. U.S.-China contact has always been primarily motivated by trade and began in 1784 when the American ship Empress of China docked in Guangzhou, marking the start of exchanges between the two nations. The newly independent United States sought Chinese tea, porcelain, and silk, exchanging them for fur, ginseng, and cotton. While this mission broke Great Britain’s tea monopoly, trade was skewed in China’s favor due to high demand for Chinese goods in the United States and limited demand for American goods in China, aside from silver. The Qing Dynasty’s Canton System restricted foreign trade to the city of Guangzhou and imposed high tariffs, with the imperial authorities only accepting payments in silver. This drained U.S. reserves of the metal and highlighted China’s dominant global economic position, which informed its ambivalent approach to foreign trade, as its self-sufficiency in natural resources meant it was not dependent on the outside world, which it largely regarded as backward and inferior. Early American views on China, on the other hand, largely centered around consumer demand for its luxury products, the cumbersome and expensive trade of which brewed resentment among American merchants and policymakers towards China.
Trade dynamics shifted after China’s defeat by the British in the First Opium War in 1842, which forced it to open more ports to foreign merchants. This subsequently led to the first treaty between China and the United States, the 1844 Wangxia Treaty, granting American merchants trade rights equal to their British counterparts. This shift marked the beginning of China’s so-called “century of humiliation,” which brought about the end of its more than two millennia-spanning imperial system and hegemony in Asia, destroying its status as Asia’s preeminent power. As Chinese power waned, other Western powers and Japan began to carve up its territory, including in a Second Opium War that saw minor but direct hostilities between the United States and China. In subsequent decades, the United States sought to preserve China’s territorial integrity to prevent its own exclusion from the China market and total domination by the other outside powers. Meanwhile, American missionaries began flocking to China, making lasting impacts on Chinese education and healthcare, creating a legacy of both goodwill and resentment that is emblematic of the relationship to this day. The collapse of the Qing Dynasty in 1912 brought about severe upheaval that limited interactions for a time, but the United States supported the nationalist government that soon found itself in a civil war against Mao Zedong’s communists. During World War II, the United States and China were allies against Japan – which also saw a pause in the civil war – but post-war, the Chinese civil war resumed, culminating in communist victory in 1949, setting the stage for future U.S.-China relations that had already oscillated radically between cooperation and hostility.
The United States refused to recognize the newly victorious People’s Republic of China, instead recognizing the Republic of China, which had fled to Taiwan for exile, perpetuating the civil war on paper if not in practice (which has technically never been resolved). The erstwhile World War II allies thus soon found themselves on opposite sides of the emerging Cold War, leading to decades of hostility and estrangement and the quick emergence of a hot war on the Korean Peninsula from 1950 to 1953. The United States and China engaged in direct hostilities with one another in defense of their respective Korean allies — South Korea for the former and North Korea for the latter — which resulted in splitting the two Koreas into a new status quo that endures to this day, marking the only major armed conflict between the two to date. The risk of repeating a similar situation arose in the Vietnam War the following decade, with the United States ambivalent to invade North Vietnam for fear of Chinese intervention, which likely had a determinative impact on the outcome of that conflict.
Still, the military victory of China’s ally in Vietnam was not emblematic of a broader shift in favor of global communism. To the contrary, an opportunity for rapprochement between the United States and China presented itself in the form of the Sino-Soviet split, a geopolitical rift that began emerging in the late 1960s within the communist world between China and the Soviet Union, driven by ideological differences and divergent national interests. Perhaps ironically for China, this meant it was now antagonistic to the newly established Socialist Republic of Vietnam that it was instrumental in creating because Vietnam aligned itself closely with the Soviet camp. The United States and China’s mutual interest in opposing the Soviet Union led to U.S. President Richard Nixon’s pioneering trip to Beijing in 1972, where he met with Chinese leader Mao Zedong. This mutual interest and China’s broader diplomatic isolation drove a slowly unfolding normalization process that culminated in 1979 with U.S. recognition of the PRC while ending recognition of the ROC. These developments rendered the United States and China largely strategically aligned for the duration of the Cold War, exemplified by both countries’ enduring hostility to Vietnam, which China also invaded in 1979, and neither country recognized until the post-Cold War era (in China’s case, it restored recognition in 1991). For the United States, geopolitical interest drove rapprochement, but the massive economic opportunities afforded by normalization sustained it.
Doing business in the China market became exceptionally lucrative for U.S. companies. The 1980s and 1990s saw rapid economic growth in China, driven in large part by reforms initiated by Chinese leader Deng Xiaoping, who opened the country to foreign investment and trade in earnest following Mao’s death, a critical ideological shift enabling the bulk of the economic relationship. The United States became a key partner in China’s economic development, with U.S. companies investing heavily in Chinese manufacturing and the U.S. market becoming a top destination for Chinese exports. This period saw China integrate into the global economy, culminating in its accession to the World Trade Organization in 2001. The relationship was not without its bumps, as the 1989 Tiananmen Square crackdown led to widespread condemnation from the United States and resulted in a temporary freeze in high-level diplomatic engagements. Nonetheless, emblematic of the relationship’s key drivers was that economic cooperation continued and deepened despite this issue and others. Ultimately, ideological divergences during the Cold War came to mean little in subsequent decades, eclipsed first by mutual antagonism to the Soviet Union, then by the promise of fortune in the China market. Nonetheless, China’s meteoric rise has put it on a collision course with U.S. power, with Western assumptions that a wealthier China would become a more liberal one proving naive, at best. This dynamic has led to a new era of strategic rivalry as a newly emboldened and powerful China seeks to at least equalize, if not overtake, the United States.
Shaping the Rivalry
Developments in recent years have significantly impacted the dynamics of the U.S.-China strategic rivalry. The COVID-19 pandemic, for instance, highlighted vulnerabilities in global supply chains and accelerated efforts by both countries to reduce dependence on each other while causing friction in international relations, exemplified by a bottoming out of relations between China and Australia after the latter called for an official investigation into the origins of COVID-19 (which emerged in Wuhan, China), an investigation that never materialized. The pandemic also intensified technological competition, particularly in areas like biotechnology and digital infrastructure. Reconfiguring global supply chains has led to phenomena such as so-called “decoupling” (a reference to separating the economies of the two countries), “near shoring” (placing manufacturing closer to the end user, implicitly not in China from the U.S. perspective), and “friendshoring” (placing manufacturing in friendly countries, again implicitly not in China).
The U.S. Biden administration’s approach to China has involved building stronger regional alliances to counter China’s growing clout and influence. This has included initiatives like the Quad (a strategic partnership between the United States, Japan, India, and Australia) and AUKUS (a security pact between the United States, United Kingdom, and Australia that seeks to deliver nuclear-powered submarines to Australia and serve as a forum for collaboration on emerging technologies such as hypersonics, quantum computing, and artificial intelligence), which aim to strengthen regional security and technological collaboration. Additionally, ongoing tensions in the South China Sea and Taiwan Strait have underscored the strategic dimensions of the U.S.-China rivalry. China has responded to these dynamics by deepening partnerships with Russia and Iran (while Russia has likewise deepened security collaboration with North Korea and Iran) and competing for influence among neutral countries in strategically vital regions like South Asia, Southeast Asia, and the Pacific Islands.
Despite the Cold War proving rather anticlimactic in terms of U.S.-China ideological rivalry, that dimension remains a part of the ongoing competition. China is driven to prove the superiority of its system over conventional Western liberalism, with the United States motivated to do the same vis-a-vis China’s system. This is highlighted by disagreements and conflicts over China’s treatment of Hong Kong in recent years — where Beijing has acted to limit the territory’s sovereignty through various legislation — and over Xinjiang, where the United States alleges China is committing crimes against humanity against the local Uyghur ethnic minority and other Central Asian ethnic groups that predominantly practice Islam.
The economic competition between the United States and China has been a central element of the evolving rivalry, with trade wars and tariffs becoming prominent tools of this contest. The U.S.-China trade war, which began in earnest in 2018 under the Trump administration, marked a significant escalation in economic hostilities. The United States imposed tariffs on billions of dollars’ worth of Chinese goods, citing issues like intellectual property theft, forced technology transfers, and the trade deficit between the two nations. China responded with tariffs of its own, leading to a tit-for-tat escalation that disrupted global supply chains and increased costs for consumers and businesses worldwide.
Despite the Phase One trade deal signed in January 2020, which saw China agree to increase purchases of U.S. goods and services, the fundamental issues driving the trade conflict remain unresolved. The Biden administration has largely maintained these tariffs, with some modifications, signaling that the economic rivalry is far from over and will continue under either another Donald Trump presidential administration or a Kamala Harris-led United States when the new U.S. president is inaugurated in January 2025. The trade war has also spurred both countries to seek greater economic self-reliance, largely through reconfiguring global supply chains, with China focusing on its “dual circulation” strategy that aims to reduce dependence on foreign markets while boosting domestic consumption.
The competition between the United States and China has increasingly shifted towards technology and innovation, with both nations vying for leadership in critical areas such as 5G, artificial intelligence, renewable technologies, electric vehicles, and semiconductors, among others. This technological rivalry is not just about economic dominance and control of supply chains — though that plays a large motivating role — but also about gaining strategic advantages in national security (as these technologies have key defense applications) and global influence (since demonstrating technological prowess to foreign nations is a means of soft power and coalition building).
One of the most visible fronts in the U.S.-China technological rivalry has been the race for 5G dominance. China’s Huawei has emerged as a global leader in 5G technology. However, the United States has raised concerns about Huawei’s ties to the Chinese government and the ruling communist party, arguing that the company’s equipment is outfitted for espionage and surveillance. This led to the United States banning Huawei from its 5G networks in a series of moves from 2019 to 2020 and pressuring its allies to do the same. The United Kingdom, Australia, Canada, New Zealand, Japan, Sweden, India, and France have all similarly taken at least some measures to restrict the proliferation of Huawei technologies in their countries.
The United States has also implemented export controls that severely restrict Chinese access to key technologies, including semiconductors, which are crucial for 5G infrastructure and military technology, targeting companies such as Huawei as well as SMIC, China’s largest semiconductor manufacturer. As a result, Huawei’s global market share has declined, but China has continued to push forward with its 5G rollout, aiming to cover much of the country with 5G networks. Meanwhile, the United States has worked to strengthen its own 5G capabilities, investing in domestic firms and collaborating with allies to develop alternative 5G solutions.
Artificial intelligence is another critical area where the United States and China are competing for supremacy. Both countries recognize AI’s potential to revolutionize industries, military capabilities, and economic productivity. China has outlined ambitious goals to become the global leader in AI by 2030, supported by significant government investments and a large pool of data vital for AI development. In these areas, China has a seeming advantage. The United States, however, remains a leader in AI research and innovation, thanks to its strong academic institutions, private sector investments, and global talent pool. The rivalry in AI is not just about technological innovation but also about setting global standards and norms for AI use, which will shape the future of the technology that has the potential to reshape the world. As such, whichever power can most influence AI use cases, regulations, and industry norms will reap substantial geopolitical advantages.
At the same time, semiconductors are the backbone of modern technology — powering everything from home appliances to vehicles to smartphones to supercomputers — and the U.S.-China rivalry in this sector has become increasingly pronounced. The United States has historically dominated the semiconductor industry, an advantageous position made stronger by close collaboration with other traditional semiconductor powerhouses like Taiwan, South Korea, and the Netherlands, but China has been rapidly building its capabilities, recognizing the strategic importance of semiconductors for economic and military prowess. The United States has sought to strengthen its semiconductor industry through initiatives like the CHIPS Act, which provides funding to support domestic semiconductor manufacturing and research. U.S. export restrictions likewise focus on semiconductors to prevent China from achieving breakthroughs that could allow it to reach technological parity in this field, such as 5nm and below and advanced logic chips. In response, China has accelerated its efforts to develop a self-sufficient semiconductor industry, investing heavily in research and development and seeking to reduce its reliance on foreign technology, and has still managed to achieve advancements in the industry despite U.S. efforts to curb its capabilities.
The military balance between the United States and China is a critical factor in their strategic rivalry. The United States has long been the dominant military power globally, with a network of alliances and military bases that ensure its influence across the world. However, China’s rapid military modernization over the past two decades has significantly altered the strategic landscape, particularly in the Asia-Pacific region, though not yet beyond, especially as U.S. coalition building has proven instrumental in keeping China contained within the so-called first island chain, a geopolitical concept consisting of a series of islands that stretch from the Japanese archipelago, through Taiwan, and down to the Philippines and Borneo.
China will find it difficult to assert credibility as a global military power if it is unable to project maritime power beyond the first island chain. As such, it is no surprise that China’s military expansion has been most evident in its growing naval capabilities. The People’s Liberation Army Navy (PLAN) has rapidly expanded, both in terms of the number of ships and technological sophistication. China now boasts the largest navy in the world by the number of ships, including advanced destroyers, aircraft carriers, and submarines, though it still trails the United States in terms of high-end hardware; for example, the United States has 11 active-duty aircraft carriers, while China has three.
This naval expansion is a central element of China’s strategy to project power and assert its claims in the Asia-Pacific region, particularly in the South China Sea. In response, the United States has sought to maintain its military dominance in the region through various means. This includes the deployment of advanced military assets, such as aircraft carrier strike groups and stealth bombers, to the Indo-Pacific region. The U.S. has also invested in new technologies and capabilities, such as hypersonic weapons and missile defense systems, to counter China’s growing military power. Since Philippine President Ferdinand Marcos Jr.’s 2022 election victory, the Philippines has undergone a substantial pivot back into the U.S. camp, allowing a de facto basing arrangement that gives U.S. forces exclusive access to nine military facilities in the country, including several in near proximity to and facing the hotspots of the Taiwan Strait and South China Sea.
The United States has increased its military presence in the Indo-Pacific region, building mutually reinforcing partnerships with the likes of Japan, South Korea, Australia, the Philippines, and Taiwan, and to a lesser extent India, Indonesia, and Vietnam, while China has continued to assert its claims in disputed territories, raising the risk of conflict. U.S. diplomatic efforts have yielded significant fruit, highlighted by a trilateral arrangement between the United States, Japan, and South Korea. Though driven primarily by South Korean President Yoon Suk-yeol, Japan-South Korea reconciliation marks a historic pivot in the region with the United States acting as matchmaker, reflecting the growing threat perceptions not only in Washington but also closer to China’s shores among most of its neighbors, who are significantly increasing military spending and rapidly arming.
Despite these efforts, the military balance in the Asia-Pacific is becoming increasingly contested. While the United States still maintains significant advantages in areas such as air power and global reach, China’s ability to challenge U.S. military dominance in its near seas is growing. Moreover, competition continues to evolve in the Indian Ocean, as China now maintains six to eight warships there after having no military presence just two decades ago. This shifting balance of power has significant implications for the strategic rivalry between the two nations, as it raises the risk of military confrontation, particularly in the context of Taiwan and contested areas like the South China Sea.
The PRC’s foundational policy of eventual unification with Taiwan also poses a risk, given that the use of force remains on the table. It is likely that Chinese leader Xi Jinping regards the Taiwan issue as central to his legacy, which, when combined with the potential strategic benefits of taking Taiwan — including breaking the U.S. hold over the first island chain and potentially seizing Taiwan’s world-class semiconductor sector — increases the likelihood of an invasion.
However, China is not yet ready for an invasion. The 2022 Russian invasion of Ukraine is instructive in this respect because the sanctions applied to Russia by the West and its partners subsequent to the invasion would be more devastating for China by orders of magnitude. While Russia is self-sufficient in energy and food, the sanctions it is experiencing are difficult but ultimately manageable. China, on the other hand, is a net importer of both energy and food, with trade disruptions posing a significant risk of food and energy shortages. One singular waterway also has massive strategic implications: the Malacca Strait, lying between the Malay Peninsula to the northeast and the Indonesian island of Sumatra to the southwest. A blockade of this critical waterway by an adversarial navy in an armed conflict scenario would cripple Chinese trade.
As such, China is constructing a network of ports and inland infrastructure to minimize the criticality of the Malacca Strait, largely accomplished through the Belt and Road Initiative. A non-exhaustive list of relevant projects is as follows: Ream Naval Base, a deep-sea port in Cambodia; the Funan Techo canal, a canal in Cambodia giving it direct access to the sea; Kyaukphyu, a deep-sea port in Myanmar; Hambantota, a deep-sea port in Sri Lanka; Gwadar, a deep-sea port in Pakistan; and Khalifa, a deep-sea port in the United Arab Emirates. Other projects are under consideration, such as the Kra landbridge, which would circumvent troublesome Southeast Asian waterways by splitting the Kra Peninsula in Thailand and allowing oceangoing vessels to cross it.
All of these projects could conceivably host Chinese warships, but China has thus far not shown strong indication that it is willing to deploy significant assets in permanent basing situations abroad. The Port of Doraleh in Djibouti is China’s only official overseas military base, which opened in 2017. In this sense, it does not come close to matching the United States in terms of global reach, but it may not want to, instead applying a tighter focus to particular strategic goals like circumventing the Malacca Strait.
Therefore, China will not likely launch an invasion of Taiwan in the near term, but the extent of both its military modernization and its ability to link logistical networks to itself over inland Eurasian routes will play critical roles in terms of its readiness, at which point an invasion will become far more likely, though, as should be noted, far from inevitable. Given this reality, the United States is prioritizing deterrence in the region to forestall a war in the first place.
The South China Sea is one of the most contentious flashpoints in the U.S.-China strategic rivalry. China claims almost the entirety of the South China Sea as its sovereign territory, based on the so-called “ten-dash line” (changed on maps from the “nine-dash line” in 2023), a demarcation line not recognized by international law, as demonstrated by a 2016 international arbitration decision determining that China’s claims are invalid. China’s claims overlap with those of several Southeast Asian nations, including Vietnam, the Philippines, Malaysia, and Brunei, leading to a series of territorial disputes. However, only the Philippines and Vietnam have actively contested Chinese claims in recent years, with the Philippines significantly intensifying its assertiveness over its own claims during the Marcos administration.
To assert its claims, China has engaged in an extensive campaign of island-building and militarization in the South China Sea. Since 2013, China has constructed artificial islands on previously submerged reefs and rocks, equipping them with military facilities, including airstrips, radar systems, and missile batteries. These actions have transformed the South China Sea into a heavily militarized zone, allowing China to project power beyond its shores and bringing its strategic influence closer to the critical Malacca Strait.
The United States has strongly opposed China’s actions in the South China Sea, viewing them as a challenge to international norms and freedom of navigation. In response, the U.S. conducts regular Freedom of Navigation Operations (FONOPs), sending naval vessels through disputed waters to challenge China’s maritime claims and support the counterclaimants, primarily the Philippines. These operations are designed to demonstrate that the United States will not accept Chinese control over the South China Sea, though it remains unlikely either party is interested in a potential world war over what are mostly uninhabited islands, reefs, and features.
Nonetheless, over the past year, the South China Sea has emerged as a more active hotspot than the Taiwan Strait, with regular clashes between Chinese and Philippine maritime forces over their countervailing territorial claims. These skirmishes, which typically involve boat rammings, pointing military-grade lasers, and deploying water cannons, have thus far stayed below the threshold of an “armed attack” that would trigger U.S. intervention per the terms of the 1951 Mutual Defense Agreement between Washington and Manila. As such, China is motivated in this context primarily by two things: to demonstrate to the Philippines that the United States is not a reliable partner that will protect it, and to discourage Philippine sovereignty claims and actions that reinforce it, such as by trying to get the Philippines to withdraw its small marine contingent from the disputed Second Thomas Shoal. These dynamics are likely to stay within the so-called “gray zone” of warfare, though unintended incidents or fatalities could alter this dynamic and spark escalation.
The U.S.-China strategic rivalry is likely to intensify across multiple fronts, with significant implications for the global order. In the economic sphere, both countries are likely to continue pursuing policies aimed at reducing their economic interdependence while seeking to build stronger ties with other countries that are frequently mutually antagonistic. This could lead to the fragmentation of the global economy into competing blocs, with the U.S. and China at the center of each. This is exemplified by international organizations such as BRICS (an acronym for its first five members: Brazil, Russia, India, China, and South Africa). The group aims to enhance cooperation and foster economic, political, and cultural exchanges among its member countries, with high ambitions such as developing an alternative to the U.S. dollar, with the U.S. currency’s continuing global dominance being a point in Washington’s favor. BRICS is likewise attracting new members, with countries like Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates, Malaysia, and Thailand joining, committed to joining, or likely to commit to joining.
However, there are still vectors for cooperation, and the difficulties of complete decoupling reduce the likelihood of armed conflict. Areas of cooperation where the two countries could find common ground include actions addressing climate change, nuclear proliferation, combating drug trafficking, space exploration, and counterterrorism, though it is true these vectors are also tenuous and depend on broader goodwill in the bilateral relationship to be viable. At the same time, decoupling such comprehensively tied economies will not only be long and arduous, but doing so completely might also be impossible, or at least impossible within a reasonable timeframe. These factors all point to intensifying competition and geopolitical tensions, though a forecast leading to direct conflict between the world’s two strongest countries is not yet a clear or inevitable one.
Nate Fischler is an Asia-Pacific analyst at geopolitical intelligence firm RANE where he focuses on regional security dynamics and supply chains.
