The relationship between China and the United States is one of the most important bilateral relationships in the world today. As the two largest economies and military powers, how China and the US interact has significant implications for global economics, security, and politics.
In recent years, China’s power and influence have grown substantially. China now has the world’s second largest economy and defense budget. It is a major trading partner for countries around the world and is increasingly assertive in defending its interests. At the same time, the US remains the dominant global superpower economically, militarily, and technologically.
However, China’s rise has led to growing tensions with the US. There are concerns in Washington that China wants to challenge US leadership and reshape the international order to better suit its interests. Issues like trade, technology, human rights, regional security, and global governance have become areas of competition and confrontation. Managing this shifting balance of power between a rising China and the established superpower United States will be one of the defining challenges of the 21st century.
This paper examines the key areas of cooperation and competition in contemporary Sino-US relations. It analyzes the sources of conflict, the evolution of US strategy towards China, China’s view of the US, and the implications for regional and global order. It argues that getting the relationship right will require understanding China’s perspective, finding areas of mutual interest, and pragmatic diplomacy. Avoiding outright conflict demands careful management offlashpoints and restoring guardrails to ensure competition does not spiral into confrontation.
The Economic Dimension
Economics is a major component of the Sino-US relationship. Since China initiated market reforms and opening up in 1978, economic ties between the two sides have grown enormously. Total bilateral trade in goods and services exceeded $750 billion in 2018 . China is currently the US’ largest trading partner in goods, third largest export market, and the largest source of imports . Major US exports to China include agricultural products, vehicles, semiconductors, and aircraft, while key imports include consumer electronics, machinery, furniture and bedding, and communications equipment.
However, the economic relationship has become increasingly unbalanced and tense in recent years. The US trade deficit with China was $419 billion in 2018, by far the largest deficit with any country . Market access issues, lack of intellectual property rights protection, state subsidies to enterprises, and other unfair trade practices are major US grievances. The Trump administration imposed tariffs on $250 billion of Chinese imports in 2018, to which China retaliated with tariffs on $110 billion of US products. After months of escalating trade tensions, the two sides reached a temporary truce in December 2018 and began negotiations for a comprehensive trade agreement . However, deep differences remain over the key structural issues.
The trade war highlights growing US concerns that China’s state-led economic model is undermining America’s technological dominance. China’s plans to develop domestic champions in fields like robotics, biotechnology, and artificial intelligence through subsidizing homegrown companies, forced technology transfers, and intellectual property theft has alarmed US officials . Measures such as the Made in China 2025 plan and China’s Cybersecurity Law are seen as threatening US competitiveness. America’s ability to regulate foreign investment for national security reasons, as evidenced by blocking the purchase of Qualcomm by a Singapore company due to Chinese ties in 2018, has also angered Beijing. Finding a balance between economic interdependence and strategic competition will be difficult.
Security and Strategic Relations
The security relationship between the United States and China is marked by both cooperation and competition. They have mutual interests on issues like counterterrorism, non-proliferation, and regional stability. However, there are also growing concerns about each other’s strategic intentions and military capabilities.
US alliances and forward deployed forces in Asia serve as the underpinning for regional stability, but are seen by China as constraints on its security interests. Similarly, while China’s military modernization helps defend its sovereignty and territorial integrity, it is shifting the regional balance of power and challenging US dominance. Although both sides recognize the dangers of conflict and profess a desire for peaceful coexistence, the lack of substantive military or strategic dialogue raises the risks of misperception and miscalculation.
Major points of contention include US arms sales to Taiwan, freedom of navigation operations in the South China Sea, and China’s militarization of disputed islands . The US decision to approve a $2.2 billion arms sale to Taiwan in July 2019 met with harsh criticism from Beijing, which considers the self-ruled island a province of China. Chinese assertiveness in the South China Sea, including constructing military facilities on reclaimed islands, is seen as challenging international law and norms by Washington. US naval patrols through Chinese-claimed waters have led to close encounters between American and Chinese forces. However, both countries have so far avoided direct military confrontation.
From a US perspective, growing Chinese capabilities and ambitions could eventually threaten America’s longstanding regional predominance and its commitments to allies. The 2017 US National Security Strategy describes China as a strategic competitor that is using economic inducements and penalties, influence operations, and military threats to change the international order in its favor . The US is countering through strengthening regional alliances and partnerships, maintaining an acute military edge, increasing freedom of navigation patrols, and expanding domestic capabilities in critical domains like artificial intelligence, quantum computing, and robotics.
China, on the other hand, sees US alliances and military presence as Cold War relics that must give way to a multipolar order. It believes the US uses fears about China’s rise to preserve regional dominance and limit China’s rightful aspirations. Chinese strategists see US efforts to maintain primacy in sensitive domains like AI, 5G telecommunications, and semiconductors as threatening its core interests . To defend its sovereignty, security, and development interests, China is improving its military capabilities and economic power. However, its overall strategy remains focused on safeguarding China’s periphery rather than expansion.
As China and the US grow more competitive, ideological differences on issues like human rights and democracy have resurfaced as source of bilateral tension. The US State Department and Congress have been increasingly vocal in criticizing China’s domestic repression, including in Tibet, Xinjiang, and Hong Kong. US condemnations of the mass detention of Uyghurs and erosion of Hong Kong’s autonomy provoked strong condemnation from Beijing as interference in its internal affairs.
Chinese officials see American rhetoric on ideals like free speech, religious freedom, and electoral democracy as reflecting double standards and efforts to undermine Communist Party rule. They criticize US violations of human rights, such as police brutality and racial discrimination. China has stepped up censorship and propaganda attacking Western democracy. For instance, the Communist Party frequently highlights dysfunction in Washington as proof of the superiority of China’s system.
The ideological competition between the US and China extends to the developing world, where the two powers vie for influence. The US promotes liberal norms such as good governance, transparency, and anti-corruption through foreign aid and nongovernmental organizations. China offers an alternative model of state-led development that prioritizes economic growth without political freedoms. Beijing’s focus on non-interference in regimes like Zimbabwe and Cambodia challenges US and European efforts to compel rights improvements. China also provides an alternative source of financing and technology without conditions for developing nations. However, debt traps and corruption scandals have damaged China’s image and boosted anti-Chinese sentiment in some countries.
For many observers, how China responds to internal and external pressure on human rights will be an indicator of its future trajectory as a major power. If China becomes more repressive and intolerant of dissent, it will inflame US and global public opinion. On the other hand, if China relaxes domestic controls and adopts international norms like upholding basic civil liberties, it could ameliorate ideological tensions. But recent trends suggest neither side is willing to compromise on clashing visions of governance and rights.
Taiwan remains one of the most dangerous flashpoints in Sino-US relations. Beijing considers Taiwan a part of China and has not renounced the use of force to unify it with the mainland. The US acknowledges China’s position that Taiwan is part of one China, but maintains unofficial ties with Taiwan and provides arms under the Taiwan Relations Act. The victory of the traditionally pro-independence Democratic Progressive Party in Taiwan’s 2016 and 2020 elections raised tensions in the Taiwan Strait.
Under President Tsai Ing-wen, Taiwan has moved to distance itself from China, while seeking expanded US and international support. The Trump administration authorized new arms sales to Taiwan and expanded official exchanges, alarming Beijing. China has stepped up diplomatic and military pressure on Taiwan, poaching several of its few remaining diplomatic allies and sending bombers and fighters near the island . The risk of miscalculation leading to conflict due to shifting red lines and signaling problems poses a persistent threat to stability in the Taiwan Strait.
A major crisis in the Taiwan Strait would likely bring US and Chinese forces into direct confrontation, with devastating consequences. It would force the US to choose between defending Taiwan and avoiding war with a nuclear-armed China. For China’s part, failure to stop Taiwan’s permanent separation could threaten the Communist Party’s domestic legitimacy. Strong misperceptions, nationalism, and fuzzy deterrence make the Taiwan issue ripe for accidental conflict. Keeping the relationship stable will require very careful signaling and crisis management on both sides in the future.
The rise of Chinese power has steadily shifted the structure of Sino-US relations over recent decades. Economic interdependence and common security interests facilitated engagement and cooperation for much of the post-Cold War period. However, the bilateral relationship has become increasingly competitive and antagonistic since the 2010s. The two countries now see each other more as strategic rivals than partners in many domains.
Managing this charged geopolitical dynamic without violent conflict will be a major challenge for leaders in Washington and Beijing. It will require persistent diplomatic efforts to find common ground, clarify red lines, build confidence, and avoid misperceptions. It will mean acknowledging each side’s core interests and principles, rather than trying to remake the other wholesale or contain China’s rise. Elements like stronger crisis management protocols, sustained military-to-military talks, guardrails around technology competition, and rules-based trade and investment relationships will be essential.
Most importantly, it will involve comprehensive and realistic strategies that avoid prematurely trying to achieve primacy. Seeking absolute security or decisive advantage will prove fruitless and provocative. The US will need to accept reciprocity and some redistribution of power. China must recognize that its ambitions still face constraints, and that an outright hegemonic challenge would isolate and doom it. Both countries have strong interests in preserving mutual economic benefits and avoiding dangerous escalatory spirals. With deft statecraft, foresight, and pragmatism, this uneasy great power triangle can be skillfully balanced. The alternative risks confrontation and chaos that would serve neither country’s welfare.
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