Managing Great Power Competition with China

Satoru Nagao of the Hudson Institute and Professor Christopher Layne of Texas A&M debate U.S.-China relations in the 21st century.

Differing views on cooperation and conflict between the US and China

By Satoru Nagao and Christopher Layne. If you enjoy this piece, you can read more Political Pen Pals debates here.


The United States Will Win Its Competition with China

By Satoru Nagao – Non-Resident Fellow, Hudson Institute

Recently, there has been plenty of evidence indicating that China is catching up to the U.S. According to the Stockholm International Peace Research Institute (SIPRI), between 2011-2020, the U.S. decreased its military expenditure by 10 percent. During the same period, China increased its military expenditure by 76 percent. The U.K. think tank The Centre for Economics and Business Research (CEBR) predicts that China will overtake the U.S. to become the largest economy by 2028. “Western values” are also under threat. According to Freedom House, the number of “free countries” declined from 89 in 2005 to 82 in 2020, and the number of “not free” countries increased from 45 to 54. And the recent situation in Afghanistan, where the Taliban took over the country after NATO troops withdrew, was a symbolic incident that damaged America’s image and credibility. Despite this, I still believe that America is on the road to winning the competition with China. There are three reasons. 

American Military and Economic Strength

First, the U.S. is still stronger than China. American military spending dwarfs China’s despite the latter’s yearly increases, with the U.S. topping Chinese military expenditure nearly three-fold. While China boasts a substantially larger army than the U.S., with its ground force standing at about twice the United States’, it still lacks many of the financial and technological capabilities of the U.S. American airpower exceeds China’s in both raw number and technology, with the U.S. accounting for a quarter of the world’s active military fleet and operating some of the most advanced aircraft in the world. The United States’ nuclear arsenal significantly overshadows that of China in terms of total warheads as well as second-strike capability through the U.S. nuclear triad structure. Finally, and perhaps most importantly, despite China’s decades-long modernization of its military, the People’s Liberation Army has not engaged in a large-scale conflict since 1979, while the U.S. has repeatedly been involved in combat operations globally since then. This translates to decades of institutional combat experience in the U.S. that is merely theoretical to China. Military dominance is underwritten by economic growth, and while China’s economy is growing fast, U.S. and allied economies remain the largest in the world and account for the highest investment in research and development. And while China’s economic growth rate has ranged from 5-10 percent for the past decade compared to 0-5 percent for the U.S., any crisis, such as the COVID-19 pandemic, can change trends at a moment’s notice.  

The Power of Alliances 

Second, the U.S. has many formal allies, including NATO, Israel, Australia, New Zealand, Thailand, the Philippines, Taiwan, South Korea, and Japan (52 in total), but China’s only formal ally is North Korea. And the 82 “free” countries still outnumber the 54 “not free” countries. Indeed, the number of allies is a significant factor in determining which side eventually prevails in a conflict. For example, in World War I, the winning side comprised 32 countries, but the losing side was composed of just four countries. In World War II, the winning side had 54 countries, but the losing side consisted of only eight countries. During the U.S.-Soviet Cold War, the winning side had 54 countries, but the defeated side comprised 26 countries. As such, U.S. allies are key in the competition with China and must be prioritized in the years to come. 

Bipartisan Consensus on China

Third, recent actions by the United States indicate that there is no difference in China policy between the Republicans and the Democrats. Barack Obama’s administration started to “rebalance” the U.S. military force away from Europe and toward Asia. Since then, both the Trump administration and the Biden administration have continued this policy. The so-called “high-tech war” was a policy of the Trump administration, many people believed. But the high-tech war, which banned products from Huawei and ZTE, started when the Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE during the Obama administration. The Biden Administration has continued these policies by signing a new Atlantic Charter with the U.K. in June 2021. The former Atlantic Charter of 1941 announced a set of common principles indicating the purpose of WWII and the kind of postwar world the two powers wanted to create. Similarly, building off a the QUAD alliance (U.S., Japan, India, Australia) initiated by the Bush Administration, the Biden Administration created a new alliance system with the U.K. and Australia called AUKUS to expand collaboration in the Pacific. 

Indeed, the history of the U.S. indicates that the U.S. will win the competition with China. During its 245-year history, the U.S. has taken only 169 years to transform from a single colony of the British Empire into the world’s only superpower, and it has maintained this status for 76 years. During this time, all rivals of the U.S., including Germany, Japan, and the Soviet Union, disappeared. And indeed, the U.S. had a long-term plan to win those competitions. For example, before World War II, the U.S. had an “Orange Plan” to defeat Japan and implement it. But when the plan was declassified in 1974, the world was surprised to learn that there were other plans, including a “Red Plan” to defeat Britain and Canada. The U.S. was prepared for any type of contingency. If President Biden says that China is its “most serious competitor,” it is natural to conclude that the U.S. has a plan to defeat China.

The U.S. is still stronger than China. The U.S. has many more allies. And the U.S. has a consensus and a plan to win the competition. Even if the U.S. faces a serious situation in the short term, the long-term outcome will be a positive one. 


Absolutist Foreign Policy Toward China Can Only Make Things Worse

By Christopher Layne – University Distinguished Professor of International Affairs, Texas A&M University

Sleepwalking Into A War With China

One metric of just how bad the Sino-American relationship has become is this: just a few years ago, foreign policy analysts were worried about a new Cold War between the U.S. and China. Now, there is serious concern about the possibility of a real shooting war between them.

U.S.-China relations began spiraling downward when the Trump administration adopted a host of hardline economic and strategic policies toward China. The Biden administration’s China policy is equally hawkish. To avoid a train wreck in Sino-American relations, Washington must rethink its China policy.  

The Frantic Rush into Needless Conflict

Three things stand out about the unraveling of the Sino-American relationship. First, is the suddenness of its transformation from peaceful engagement to a new Cold War. Second, in a Washington otherwise riven by deep political polarization, a hardline stance toward China now is just about the only issue on which there is bipartisan agreement. Third, based on the lessons the U.S. foreign policy establishment drew from the Cold War’s end, the Sino-American antagonism should not be happening.  

The Soviet Union’s implosion and the Cold War’s end supposedly meant the final triumph of America’s liberal ideology, one based on democracy and market economics. Francis Fukuyama went so far as to dub the event “the end of history”. The U.S. foreign policy establishment believed that enfolding China in a web of international institutions and economic interdependence would ensure its political and economic liberalization. Moreover, the end of the Cold War’s bipolar international political system was said to herald the beginning of America’s post-Cold War “unipolar moment” — which was supposed to be infinite, not transitory. America’s post-Cold War “primacy” or hegemony was thought to be unchallengeable. The notion that U.S. power ever could decline was dismissed by the establishment as prelapsarian.   

The intellectual flimsiness of these assumptions should have been apparent even in the early 1990s. American primacy was destined to be short lived because hegemonic power invariably begets resistance. Of course, no one in the American foreign policy establishment will acknowledge that America’s “unipolar moment” is over. But, Washington’s new strategic focus on “great power competition” with China and Russia is such an admission. Great power competition can only occur in a world of two or more great powers; by definition, it cannot occur in a unipolar system.

When it comes to China, the foreign policy establishment’s mood is febrile, and the perception of a “China threat” now is firmly implanted in its collective mind. To be sure, a few cooler heads reject the idea that the U.S. and China have plunged into a second Cold War because, unlike the U.S. and the Soviet Union, America and China are so interconnected in the realms of economics, trade, and technology that their decoupling is inconceivable. Nevertheless, there are important and concerning parallels between the First Cold War and the current Sino-American antagonism.  

The Delicate Balance of the First Cold War

The First Cold War against the Soviet Union had two defining characteristics. First, the Soviet-American rivalry was, for the U.S., a Manichean ideological struggle between “good” states (democracies) and “bad” states (authoritarian, totalitarian, or autocratic governments). As stated by the NSC-68, one of the key documents guiding early American Cold War strategy, the world could not exist “half slave, and half free.” The Second was America’s “containment” strategy, which surrounded the Soviet Union with hostile alliances, and American military bases.

The Trump/Biden policy toward China is a replay of U.S. strategy during the First Cold War. The Biden administration has intensified the Sino-American antagonism by depicting U.S. competition with China as a global ideological struggle between democracy and autocracy — just as the First Cold War purportedly was. And, dusting off the strategic playbook it used against the Soviet Union, the U.S. is building a wall of alliances around China like the Quad (the U.S., India, Japan, Australia) and AUKUS (Australia, Britain, and the U.S.).

Of course, the reason the First Cold War did not turn hot was because both Moscow and Washington accepted the division of Europe — the central theater of their military competition. Each knew where the other’s “red lines” were drawn and neither side crossed them. Today, however, there are several flashpoints where the demarcation of “spheres of influence” is contested: the South China Sea, the Senkaku/Diaoyu Islands in the East China Sea, and Taiwan. 

Misremembering the Lessons of History

Taiwan is the issue most likely to spark a hot war between the U.S. and China. Beijing regards the island as a renegade province and it seeks its reunification with China. When President Richard Nixon and Secretary of State Henry Kissinger laid the groundwork for resuming diplomatic relations with China, the U.S. agreed that there is only one China and withdrew its diplomatic recognition of Taiwan. The United States now is walking back from the foundational understandings that underpinned the restoration of U.S. relations with China. American troops are training Taiwanese troops on the island, and Washington is chipping away at the proscription against having official contacts with the Taipei government. In a clear break with longstanding U.S. policy, twice this year President Biden has stated that Taiwan is a U.S. ally (it is not) and that the U.S. will, if necessary, come to the island’s defense if it is attacked by China. White House attempts to explain away these statements have been less than convincing.

China’s growing power has triggered a collective meltdown among the foreign policy establishment, which trots out familiar First Cold War tropes to support increasingly hardline U.S. policies toward China.  These include: fear of “falling dominoes”, worry that a China ascendant in East Asia could threaten American security, concern that failure to “stand up” to China, especially over Taiwan, would be 1930s-like “appeasement” that would compromise American credibility. These things are not true, but the American foreign policy establishment believes they are true and acts accordingly. This is dangerous.  

The Case for Temperance

Writing about the coming of the Pacific War, the historian Jonathan G. Utley asserted that states do not choose to go to war; rather adopt policies that lead to war. “To go to war,” he said, “it is only necessary to take step after step and make decision after decision until the leaders finally resort to war because they have exhausted their other options.” The U.S. seems to discount Chinese sensitivities about its century of humiliation by the Western powers. This is a mistake. By interfering with China’s internal politics — Tibet, Xinjiang, Hong Kong, and Taiwan — Washington is sleepwalking into a war it neither intends nor wants. 

Instead of turning to the 1930s for historical lessons, the U.S. foreign policy establishment would be better served by remembering 1914. As the historian David Calleo wrote, the key take-away from the Great War’s outbreak was “not so much the need for vigilance against aggressors, but the ruinous consequences of refusing reasonable accommodation to upstarts.” Going forward, America has a choice: accommodate China and its claim to regional hegemony in East Asia, or go to war to prevent that. 



This article is part of Divided We Fall’s “Civility Without Borders” series, covering a range of topics fundamental to U.S. foreign policy. Through this series, we ask scholars, journalists, government officials, and activists to discuss the most pressing issues in international affairs. If you want to read more pieces like this, click here.

Satoru Nagao
Non- Resident Fellow, Hudson Institute | Website | + posts

Dr. Satoru Nagao is a fellow (non-resident) at Hudson Institute, based in Tokyo, Japan. From December 2017 through November 2020, he was a visiting fellow at Hudson Institute, based in Washington, D.C. Dr. Nagao’s primary research area is the U.S.-.Japan-India security cooperation. Other areas of specialization include South Asia, East Asia & the Pacific, Defense Strategy, Security Alliances, International Relations, Military Procurement, and Technology. He holds a Ph.D. from Gakushuin University.

Christopher Layne
Distinguished Professor of International Affairs, Bush School of Government & Public Service | Website | + posts

Christopher Layne is University Distinguished Professor of International Affairs and the Robert M. Gates Chair in National Security at the Bush School of Government and Public Service at Texas A&M University. His fields of interest are international relations theory, great power politics, U.S. foreign policy, and grand strategy. He has contributed extensively to the debates about international relations theory and American grand strategy in policy journals such as Foreign Affairs, Foreign Policy, The Atlantic, Financial Times, New York Times, or Washington Post. He is a member of the Council on Foreign Relations and a member of the Editorial Board of both International Security and Security Studies. In 2014, he was a Visiting Fellow at the Norwegian Nobel Institute in Oslo. He previously served as an Intelligence Community Associate. 

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