The Imperative of US-China Cooperation - Preventing Conflict Between Superpowers

War between the United States and China in the coming decades is not inevitable. However, there are structural drivers pushing the two countries toward confrontation.

It is obvious that mutual distrust is reaching dangerous levels unseen since the Cold War. Elites in both countries view the other as posing an existential threat. These threat perceptions become self-fulfilling prophecies. Actions taken for deterrence are seen as proof of aggression. While distrust has deep roots, populist nationalist rhetoric makes tensions worse.

Clearly, a war between the US and China would be catastrophic, damaging the global economy and not to mention the immense human suffering. The relationship between Washington and Beijing will be the defining geopolitical challenge of the 21st century. Both countries are nuclear powers, economic giants, and have advanced AI and cyber capabilities. The ramifications of war would surpass the conflicts of the 20th century.

While war is avoidable, potential flashpoints that could spark conflict. These include tensions over Taiwan, clashes in the South or East China Sea, conflict in the Korean Peninsula, political crisis in North Korea, and disputes over the Arctic or Africa. That crisis could emerge rapidly with little time for leaders to think through decisions. Once hostilities commenced, they could quickly escalate to military confrontation.

Five structural factors are propelling the US and China toward confrontation: history, divergence in political systems, power imbalance, nationalism, and military modernization.

1. China has a long history of foreign domination that shapes its worldview. US domination could be seen as similar to former imperialist powers.

2. Their divergent domestic political systems and values create distrust.

3. China’s power is rising as the US feels its dominance slipping.

4. Nationalism is growing more extreme in both countries.

5. Advancements in military technologies and expanding arsenals increase the chances of conflict during a crisis.

So what can each do about it? Well for a start, leaders must recognize their interdependence across trade, finance, environment, public health, and other areas. The economic costs of decoupling would be massive for both sides. Leaders should understand the others’ strategic red lines to avoid miscalculations. For example, US recognition of Taiwan could provoke war. Furthermore, understanding each side’s mindset, interests and constraints is critical as is stabilizing the military balance through arms control measures to manage tensions. Involving other sovereign entities, to help build guardrails to manage crises when they inevitably emerge. Expanding direct communication channels between leaders to control narratives and reduce distrust will be hard. Tamping down populist nationalism and recognize both sides benefit from cooperation. Establishing working groups to explore shared challenges like climate change. Leaders should invest time and political capital to make the relationship work.

The US and China must recognize their interdependence and also their constraints. For the US, its military dominance has limits, allies are reluctant to contain China, and its domestic social cohesion is declining. China cannot displace the US role in Asia quickly, and faces demographic decline, and domestic vulnerabilities in Xinjiang, Tibet, Taiwan and Hong Kong. Neither can achieve absolute security or dominance over the other.

Further, both countries suffer from misperceptions shaped by propagandistic narratives. Americans wrongly see China as an economic parasite, military aggressor and political subversiver. Chinese wrongly see the US as determined to subjugate China again. These misperceptions make compromise difficult domestically.

There is a compelling case that war between the US and China in the coming decades is not inevitable, despite rising tensions. We need better policy solutions centered on diplomacy and political leadership and that recognizes interdependence and these misperceptions. Investors should monitor geopolitical risks but remain cautiously optimistic about stability. Arms control, crisis guardrails and cooperation on shared challenges would be more reassuring. The challenges are enormous, but global peace and economic prosperity depend on stable US-China relations. The potential for catastrophic conflict underscores the importance of skilled statecraft. As China rises and the US seeks to hold sway, investors must watch relations between Washington and Beijing as a key factor shaping Asia's economic and political future.

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