Competition is inevitable but competitive co-existence solves

The relationship between the two superpowers is fraught but manageable if the US plays its cards right

Despite the meeting between presidents Joe Biden and Xi Jinping in California this week, at which the two leaders agreed to resume military communications, relations between the US and China remain fraught. Some Americans refer to a new cold war, but China is not like the USSR. The US had no economic interdependence with the Soviets, whereas it has half a trillion dollars in trade with China.

While partial decoupling (or "de-risking") on security issues is useful, total economic decoupling would be extremely costly and few allies would follow suit. More countries count China than the US as their leading trade partner. Meeting the China challenge will thus require a more complex strategy.

Other aspects of interdependence, such as climate change and pandemics, obey the laws of physics and biology, which also make decoupling impossible. No country can solve these transnational problems alone. For better or worse, the US is locked in a "co-operative rivalry" with China. This is not like cold war containment. Allies and partners such as India are assets that China lacks, and the combined wealth of the democratic allies will far exceed that of China (plus Russia) well into this century.

If the US expects to transform China in a way similar to the collapse of the Soviet regime at the end of the cold war, it is likely to be disappointed. China is too big for America to invade or for it to coerce domestic change — and the reverse is true, too. Neither China nor the US poses an existential threat to each other unless we blunder into a major war.