After 40 years of intense interaction, the United States and China are pulling away from each other. The US believes China plans to eclipse it as the premier global power and builder of order. China’s leaders think America wants to end their rule. Determined to avoid war, but unwilling to compromise, each side is trying to reach its goals in spite of its rival. The Chinese expression—山不容二虎—suggests that one of them must fail. Tigers dominate their worlds by their very natures; two is one too many.

Beijing and Washington both face a contradiction between political and economic logic.

In order to maximize their scope for action, both powers want the global system to resemble their domestic governing philosophy as closely as possible. But the existing order—incomplete, evolving, and contested as it is—cannot be broadly liberal 

 illiberal in the American and Chinese modes simultaneously. So the competition is on.

The Chinese Communist Party claims that only the CCP can provide the stability essential to China’s development and that individual rights must be sacrificed to stability if the Party requires it. In effect, the CCP lops off the top of Maslow’s Hierarchy of Needs. It tells the Chinese people that they are 

; they can be happy, wealthy, healthy, technologically enabled, educated (to a point), entertained, and globally integrated (to a point), but they cannot be free, lest chaos ensues, and development ceases. Most Chinese seem to accept this, or to least to comply.

The United States values individual liberty over social and cultural cohesion, except when it feels its security is threatened. Most operations of the American government, admirable and otherwise, are conducted in the light of day, where they are constrained by law and criticized by free media and opposition parties. Under broadly democratic institutions, Americans believe, Maslow’s pyramid is intact, and humanity achieves its full expression.

Because Chinese and Americans enjoy making money, admire each other’s cultures, and tend to get along—their senses of humor, friendship, and family translate well—the contrast in their political systems was tolerated by both while China was clearly in the subordinate position (from 1979 to roughly 2013). When China began to use its wealth to build global influence, however, tensions between China’s secretive, authoritarian system and the more open Western model came to the fore.

China and the US are compatible in purely economic terms and are so deeply integrated that neither can harm the other without inflicting damage on themselves.

That’s the logic of politics. It suggests the emergence of side-by-side orders in a bifurcated world.  

Economic logic speaks against such separation.

Despite the recent success of America’s economy and the weakening of China’s, both powers have great economic strength and neither is fatally vulnerable to the other. China has the world’s largest consumer class and is the world’s greatest trading and lending nation. It is also the largest producer or processor of agricultural goods, legacy computer chips, medical precursors, rare earths, lithium batteries, solar and wind power, and electric vehicles. The United States leads in services, oil and natural gas, GDP per annum, national net wealth, and higher education. Its economic advantages are enhanced by the world’s largest military, most powerful alliance network, and a widely appealing popular culture.

China and the US are compatible in purely economic terms and are so deeply integrated that neither can harm the other without inflicting damage on themselves. They are integrated not only with each other but with nearly every other economy on earth via networks too complex to be fully understood.

Short of war, no sword can cut this Gordian knot. While Washington and Beijing both pursue partial decoupling to reduce vulnerabilities, both know that partners and allies will not join them in isolating the rival power altogether.

That’s the logic of economics. It speaks for cautious but continued engagement.

It is a sad commentary on our political discourse that mention of obvious, important truths—we share a planet and we shouldn’t destroy humankind—sounds naïve. These facts should guide our thinking all the same.

In times of peace, economic prerogatives dominate over political concerns. In times of war, the claims of the market can be scrapped for security. The difficulty confronting policymakers in both capitals is that they do not enjoy a dependable peace, but do not wish to fight.

This perilous state could persist for decades. The US has never faced a peer competitor. China has never been a superpower in the modern sense. Both nations are learning under fraught international and domestic conditions, just when they most need a steady hand. Equally ambitious and distrustful, equally convinced of their exceptionalism, and equally dedicated to different models of human flourishing, they will find no ready compromise.

Under these circumstances, should politics or economics dominate policymaking?

Leaders can buy time to manage these contradictions by invoking two other types of logic: that of geography—we share the same desperate planet—and that of nuclear weapons—we must not go to war, no matter how galling or inconvenient we are to each other.

It is a sad commentary on our political discourse that mention of obvious, important truths—we share a planet and we shouldn’t destroy humankind—sounds naïve. These facts should guide our thinking all the same. If the predicate of our strategy is that 

, we will have a better chance of reconciling economic and political logic—of finding the right balance between prosperity and security, between a changing China and a changing United States—over the long term.

This does not mean we should neglect deterrence. It does mean that we should work with China to create conditions that are conducive to peace over the long term. This requires launching strategic stability talks around nuclear, cyber, and space weapons. It also requires developing crisis prevention and crisis management mechanisms even as we strengthen deterrence, build Taiwan’s capacity for self-defense, and counter China’s efforts to legitimize illiberal global practices.

We cannot see the end of this competition, but we can see this first step.

 is the director of the Wilson Center’s Kissinger Institute on China and the United States.

Cover photo: In this June 29, 2019, file photo, US President Donald Trump, left, shakes hands with Chinese President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, western Japan. AP Photo/Susan Walsh.

The Director of the Wilson Center’s Kissinger Institute on China and the United States Robert Daly, examines the growing competition between the United States and China. He explores the political and economic logic driving their rivalry and argues for a strategy rooted in stability and mutual restraint to avoid conflict and foster coexistence.  

One Mountain, Two Tigers

Washington and Beijing need a relationship with each other more than they want one. Neither can succeed unless it finds a balance between its interests and values. Our interactive feature uses the structure of Chinese door couplets to examine this tricky relationship. 

 Our interactive feature uses the structure of Chinese door couplets to examine this tricky relationship. 