Introduction
The struggle between the United States and China has become the defining feature of twenty-first-century international relations. As the International Institute for Strategic Studies noted in its 2025 Asia-Pacific security assessment, the bilateral relationship “is more strained than it has ever been at any other point in the 21st century,” with trade, technology, and Taiwan setting the tone for “deep mutual distrust” . This rivalry, encompassing political, security, and economic domains, represents not merely a disagreement between two nations but a fundamental contest over the future architecture of the global order.
What makes this moment particularly significant is its structural nature. The deterioration has persisted across fundamentally different American administrations—from Trump’s confrontational unilateralism to Biden’s alliance-based multilateralism and back to Trump’s second-term “America First” approach. This consistency suggests we are witnessing something deeper than personality-driven diplomacy: a systemic fight between an established hegemon and a rising power with genuine global reach .
As an International Relations Analyst observing these dynamics for two decades, I argue that the US-China rivalry has entered a new phase best characterized as “geostrategic globalization”—an era where geopolitical competition fundamentally reshapes the transnational economic networks that once seemed immune to great-power politics . This article examines the landscape of this rivalry, analyzes key case studies, explores theoretical frameworks, and assesses the implications for international order.
Understanding the Landscape
The Structural Architecture of Rivalry
To comprehend the current US-China dynamic, we must first understand the structural context within which it unfolds. The post-World War II international order, constructed under American hegemony, rested on four pillars: a capitalist world economy centered on Bretton Woods institutions, collective security through US-led alliances, a global trade regime, and liberal ideological alignment . This architecture was designed to preserve American dominance and the global disparities from which it benefited.
China’s rise has fundamentally disrupted this arrangement. Today, Beijing is perceived in Washington as a “systemic rival”—a term deliberately chosen to convey that China’s challenge extends beyond economics into the realm of political and ideational contestation . The 2022 Biden administration National Security Strategy explicitly framed China as the only competitor capable of combining economic, diplomatic, military, and technological power to challenge the stable and open international system.
Yet the relationship defies simple categorization. The same document acknowledged that China “is also central to the global economy and has a significant impact on shared challenges, particularly climate change and global public health” . This duality—rival and indispensable partner—captures the complexity facing policymakers on both sides.
The Economic Foundations of Competition
The numbers tell a compelling story. While US GDP remains higher in nominal terms, China’s Purchasing Power Parity stands at approximately 1.33 times that of the United States. More strikingly, Chinese manufacturing output in 2024 accounted for 27.7 percent of global share, compared to America’s 17.3 percent . China has become the world’s largest trading nation, the primary trading partner for over one hundred countries, and holds the globe’s largest trade surplus.
This economic transformation has been accompanied by military modernization. According to US Defense Department assessments, the People’s Liberation Army Navy is now the world’s largest, with over 370 platforms, while Chinese air force and unmanned aerial systems increasingly rival their American counterparts . In technology—the decisive domain of twenty-first-century competition—China has reportedly pulled ahead of the United States in 37 out of 44 critical areas.
Case Studies
The Semiconductor Showdown
Nowhere is the rivalry more visible than in semiconductors—the essential component of modern economic and military power. The Biden administration’s export controls, designed to deny China access to advanced chips and manufacturing equipment, represent the most aggressive attempt to reshape global production networks since the Cold War .
Yet the results have been mixed. The success of Huawei in producing a new phone equipped with advanced Chinese-made chips exposed the limits of US sanctions . Rather than crippling China’s technological ambitions, the embargo has accelerated Beijing’s pursuit of self-sufficiency, creating incentives for indigenous innovation that may ultimately reshape China’s structural position in the global tech landscape.
Corporate responses to this environment reveal the complex dynamics at play. Multinational corporations face unprecedented geopolitical risk, with most adopting one of two strategies: hedging or aligning. Hedgers, like many Japanese semiconductor component manufacturers, relocate production to third countries like Thailand and Vietnam while maintaining some Chinese capacity, thereby attenuating economic fragmentation. Aligners, by contrast, secure state patronage and subsidies by explicitly supporting geostrategic objectives, accelerating the decoupling process .
ASEAN: The Reluctant Middle Ground
Southeast Asia has emerged as the critical battleground for influence and a laboratory for understanding how secondary states navigate great-power competition. China’s influence in the Association of Southeast Asian Nations has expanded through the Belt and Road Initiative, reinforced by high-level diplomatic visits and deepening economic integration under the Regional Comprehensive Economic Partnership framework .
The second Trump administration’s approach has introduced significant uncertainty. Aggressive tariff policies—imposing duties of 49 percent on Cambodian goods, 46 percent on Vietnamese products, and 44 percent on Burmese exports—have severely impacted the region’s export-oriented economies . This “transactional diplomacy” treats alliances as negotiable arrangements rather than enduring commitments.
Yet ASEAN has not tilted decisively toward Beijing. Malaysian Prime Minister Anwar Ibrahim articulated the region’s preferred approach as “active non-alignment”—maintaining a strong United States presence for security while preserving vibrant economic ties with China . This strategy, echoed by French President Emmanuel Macron’s call for European “strategic autonomy,” reflects a broader rejection of bipolarity. As Anwar stated, “Stability does not come from carving up the map, but from creating space for all to participate meaningfully in shaping the order we live in” .
The Global South and Institutional Competition
The rivalry increasingly plays out in multilateral forums where the battle for legitimacy and influence is waged. While the United States under Trump announced withdrawal from dozens of UN agencies and multilateral organizations, China has positioned itself as the defender of the existing system—ironically, the very system created under American leadership .
China’s Global Governance Initiative, proposed at the Shanghai Cooperation Organization Tianjin Summit, explicitly emphasizes the UN Charter and international law as foundations of world order . This framing resonates deeply across the Global South, where memories of colonial domination make sovereign equality a powerful value. China’s development model—combining infrastructure investment, non-interference, and horizontal cooperation without political conditionality—offers an alternative to Western approaches that many developing countries find attractive .
Theoretical Analysis
Structure versus Agency in Great-Power Rivalry
Understanding the US-China competition requires moving beyond conventional International Relations frameworks that treat states as unitary actors responding to systemic pressures. The relationship between structure and agency has become more complex in an era of deep globalization .
Structural realist interpretations, following Kenneth Waltz, emphasize how the international system’s anarchic nature and distribution of power constrain state behavior. From this perspective, China’s rise inevitably generates conflict as it disrupts the existing balance and challenges American hegemony. John Mearsheimer’s offensive realism predicts that the United States will seek to contain China just as it contained the Soviet Union, while China will strive to become a regional hegemon . The Thucydides Trap—the dangerous dynamic when a rising power challenges an established one—captures this structural logic .
Yet structural explanations alone prove insufficient. Neoclassical realists and agency-focused approaches highlight how domestic politics, leadership choices, and policy strategies shape outcomes within structural constraints. The distinct approaches of Trump and Biden—despite both pursuing strategic competition—demonstrate that agency matters. Trump’s unilateral tariffs and transactional diplomacy differ fundamentally from Biden’s alliance-building and multilateral containment, even if both serve the same underlying goal of preserving American primacy .
The Dilution of Structural Power
What makes the current moment theoretically interesting is how globalization has altered the structure-agency dynamic itself. Susan Strange’s concept of structural power—control over security, production, finance, and knowledge—once clearly resided in Washington. Today, that power has been diluted by the very interdependence the United States created .
When the United States attempted to contain Japan in the 1980s, it could leverage its monetary supremacy to game the economic structure successfully. The Japanese challenge was contained. But the contemporary world economy differs fundamentally. China’s position as the world’s manufacturing hub, its integration into global supply chains, and its centrality to transnational production networks mean that economic decoupling imposes costs on all parties .
This interdependence creates what might be termed “entangled competition”—a rivalry where the protagonists remain deeply enmeshed in mutually beneficial relationships. Unlike the US-Soviet Cold War, where economic interaction was minimal, the US-China relationship involves trillions of dollars in trade, millions of jobs on both sides, and supply chains that cannot be unraveled quickly or cheaply.
The Role of International Organizations
Multilateral institutions have become both arenas for and casualties of the US-China rivalry. The Trump administration’s withdrawal from 66 multilateral organizations in early 2026 created a leadership vacuum that China has been reluctant to fill completely . Beijing’s selective engagement—maintaining membership in most institutions while avoiding assumption of leadership roles except where core interests are engaged—reflects a sophisticated understanding of the costs and benefits of systemic responsibility.
This pattern challenges simplistic narratives of China seeking to replace the United States as global hegemon. As analysts note, China’s primary motivation appears to be regime survival rather than global domination . Beijing seeks to reduce American influence in regions it views as strategically vital—notably the Asia-Pacific—while avoiding the burdens of systemic leadership.
The World Health Organization exemplifies this dynamic. China has increased its influence within the WHO while the United States has withdrawn, citing the exclusion of Taiwan. Yet Beijing has not rushed to fill every vacuum created by American retrenchment, suggesting a preference for multipolarity rather than Chinese unipolarity .
Implications and Consequences
Economic Fragmentation and the Risk of Decoupling
The most immediate consequence of intensified rivalry is the gradual fragmentation of the global economy. What began as targeted decoupling in sensitive sectors has expanded to encompass broader supply chain restructuring. The IMF has documented how trade restrictions and investment screening are creating parallel systems—one centered on the United States and its allies, another on China and its partners .
This fragmentation carries significant costs. Global supply chains were built for efficiency, not resilience or national security. Rewiring them for geopolitical safety reduces productivity, raises prices, and slows innovation. For multinational corporations, the challenge is navigating between the world’s two largest markets while avoiding entanglement in great-power conflict.
Yet complete decoupling remains unlikely. The deep integration of US and Chinese economies—what scholars call “inter-embeddedness”—means that separation would impose unacceptable costs on both sides . The more probable outcome is selective decoupling in strategically sensitive sectors combined with continued integration in areas where interdependence remains mutually beneficial.
The Alliance Dilemma and Third-Party Choices
For America’s traditional allies, the intensifying rivalry presents excruciating choices. The erosion of alliance credibility—the sense that American security guarantees might not be ironclad—has ushered in a new instability . European allies pursue strategic autonomy while remaining dependent on American protection. Asian allies deepen security cooperation with Washington while maintaining economic ties with Beijing that are essential to their prosperity.
This dilemma extends beyond traditional allies. The Global South confronts pressure to choose sides while seeking to preserve autonomy. China’s Belt and Road Initiative offers infrastructure and investment without the political conditionality attached to Western aid. Yet concerns about debt sustainability and dependency create caution . The result is a hedging strategy—deepening engagement with China economically while maintaining ties with the United States for security and diversification.
The Domestic Dimension
Perhaps the most underappreciated aspect of the rivalry is its domestic dimension. As The New York Times commentary acknowledged, “The only real solution is to get our house in order and beat China at its own game” . This insight captures a fundamental truth: national competitiveness derives less from containing rivals than from effectively managing domestic priorities.
China’s development experience demonstrates that competitiveness is achieved through continuously deepening reform, expanding openness, and stimulating societal innovation. The United States faces structural challenges—aging infrastructure, industrial upgrading needs, persistent budget deficits—that cannot be solved by scapegoating an external rival . The race to outcompete China may ultimately be won or lost not in the South China Sea or on trade battlefields, but in the quality of domestic governance, education, and innovation systems.
Strategies for Managing Competition
Given that the structural drivers of rivalry will persist for the foreseeable future, the question becomes not how to eliminate competition but how to manage it constructively. Several strategic approaches merit consideration.
Managed Strategic Competition
The concept of managed strategic competition acknowledges that rivalry is inevitable while seeking to prevent it from degenerating into conflict. This approach requires maintaining communication channels, establishing guardrails, and developing crisis management mechanisms. The resumption of military-to-military dialogue and agreements on AI in nuclear decision-making represent tactical improvements that can reduce the risk of misperception .
Rules-Based Competition
Like sports, competition can be benign when all parties abide by common rules . The challenge lies in agreeing on those rules. The United States emphasizes intellectual property protection, state-owned enterprise discipline, and market access. China stresses sovereign equality, non-interference, and development rights. Bridging these perspectives requires negotiation and compromise—processes that have become more difficult as trust has eroded.
Competitive Coexistence
The most realistic vision may be competitive coexistence—a relationship where rivalry in some domains coexists with cooperation in others. Climate change, global health, and nuclear non-proliferation affect both countries and require joint action. Even as competition intensifies, both Washington and Beijing have acknowledged the need to address shared challenges . Preserving space for such cooperation while managing competition represents the central diplomatic challenge of our era.
Conclusion
The US-China strategic rivalry will shape international relations for decades to come. Rooted in structural shifts in the global balance of power, animated by domestic political imperatives on both sides, and playing out across economic, technological, and military domains, this competition differs fundamentally from great-power rivalries of the past.
What makes it unique is the context within which it unfolds: a deeply globalized world economy where the protagonists remain intertwined even as they compete. China’s structural position within global production networks gives it resilience against American containment efforts. American technological leadership and alliance networks provide enduring advantages that cannot be quickly replicated.
The outcome remains uncertain. Structural realists predict inevitable conflict. Liberal institutionalists hope that interdependence will moderate behavior. Constructivists emphasize how identities and narratives shape interests and strategies. Each perspective captures part of the truth.
What seems clear is that the era of unipolarity has ended and the transition to multipolarity will be turbulent. Whether the United States and China can navigate this transition without catastrophic conflict depends on leadership, strategy, and perhaps most importantly, on the choices of the many countries caught between them. As ASEAN leaders have demonstrated, preserving autonomy and refusing to choose sides may be the most effective strategy for managing great-power rivalry—and perhaps a model for how competition can be prevented from becoming confrontation.
The Chinese saying that “from an exchange of blows, friendship grows” may be overly optimistic . But the alternative—allowing competition to spiral into conflict—is too terrible to contemplate. Managing this rivalry successfully will require wisdom, restraint, and recognition that in a nuclear-armed, deeply interconnected world, there can be no victors in great-power war. The only winning move is to prevent the game from ending.
