It was a momentous choice. Three decades ago, the Cold War ended, and the United States had won. It was now the sole great power on the planet. Scanning the horizon for threats, U.S. policymakers seemed to have little cause for concern—and especially not about China, a weak and impoverished country that had been aligned with the United States against the Soviet Union for over a decade. But there were some ominous signs: China had nearly five times as many people as the United States, and its leaders had embraced economic reform. Population size and wealth are the main building blocks of military power, so there was a serious possibility that China might become dramatically stronger in the decades to come. Since a mightier China would surely challenge the U.S. position in Asia and possibly beyond, the logical choice for the United States was clear: slow China’s rise.

Instead, it encouraged it. Beguiled by misguided theories about liberalism’s inevitable triumph and the obsolescence of great-power conflict, both Democratic and Republican administrations pursued a policy of engagement, which sought to help China grow richer. Washington promoted investment in China and welcomed the country into the global trading system, thinking it would become a peace-loving democracy and a responsible stakeholder in a U.S.-led international order.

Of course, this fantasy never materialized. Far from embracing liberal values at home and the status quo abroad, China grew more repressive and ambitious as it rose. Instead of fostering harmony between Beijing and Washington, engagement failed to forestall a rivalry and hastened the end of the so-called unipolar moment. Today, China and the United States are locked in what can only be called a new cold war—an intense security competition that touches on every dimension of their relationship. This rivalry will test U.S. policymakers more than the original Cold War did, as China is likely to be a more powerful competitor than the Soviet Union was in its prime. And this cold war is more likely to turn hot.

None of this should be surprising. China is acting exactly as realism would predict. Who can blame Chinese leaders for seeking to dominate Asia and become the most powerful state on the planet? Certainly not the United States, which pursued a similar agenda, rising to become a hegemon in its own region and eventually the most secure and influential country in the world. And today, the United States is also acting just as realist logic would predict. Long opposed to the emergence of other regional hegemons, it sees China’s ambitions as a direct threat and is determined to check the country’s continued rise. The inescapable outcome is competition and conflict. Such is the tragedy of great-power politics.

What was avoidable, however, was the speed and extent of China’s extraordinary rise. Had U.S. policymakers during the unipolar moment thought in terms of balance-of-power politics, they would have tried to slow Chinese growth and maximize the power gap between Beijing and Washington. But once China grew wealthy, a U.S.-Chinese cold war was inevitable. Engagement may have been the worst strategic blunder any country has made in recent history: there is no comparable example of a great power actively fostering the rise of a peer competitor. And it is now too late to do much about it. 

REALISM 101

Soon after the Sino-Soviet split of the 1960s, American leaders—wisely—worked to integrate China into the Western order and help it grow economically, reasoning that a more powerful China would be better able to help contain the Soviet Union. But then the Cold War ended, raising a question: How should U.S. policymakers deal with China now that it was no longer needed to check Moscow? The country had a per capita GDP that was one-75th the size of the United States’. But given China’s population advantage, if its economy grew rapidly in the decades ahead, it could eclipse the United States in sheer economic might. Simply put, the consequences of an increasingly wealthy China for the global balance of power were enormous.

From a realist perspective, the prospect of China as an economic colossus was a nightmare. Not only would it mean the end of unipolarity; a wealthy China would surely also build a formidable military, as populous and rich countries invariably convert their economic power into military power. And China would almost certainly use that military to pursue hegemony in Asia and project power into other regions of the world. Once it did, the United States would have no choice but to contain, if not try to roll back, Chinese power, spurring a dangerous security competition.

Why are great powers doomed to compete? For starters, there is no higher authority to adjudicate disputes among states or protect them when threatened. Furthermore, no state can ever be certain that a rival—especially one with abundant military power—will not attack it. Competitors’ intentions are hard to divine. Countries figure out that the best way to survive in an anarchic world is to be the most powerful actor of all, which in practice means being a hegemon in one’s own region and making sure no other great powers dominate their regions.

Turning China into a great power was a recipe for trouble.

This realist logic has informed U.S. foreign policy since the very beginning. Early presidents and their successors worked assiduously to make the United States the most powerful country in the Western Hemisphere. After achieving regional hegemony around the start of the twentieth century, the country played a key role in preventing four great powers from dominating either Asia or Europe: it helped defeat imperial Germany in World War I and both imperial Japan and Nazi Germany in World War II and contained the Soviet Union during the Cold War. The United States feared these potential hegemons not only because they might grow powerful enough to roam into the Western Hemisphere but also because that would make it harder for Washington to project power globally.

China is acting according to this same realist logic, in effect imitating the United States. It wants to be the most powerful state in its backyard and, eventually, in the world. It wants to build a blue-water navy to protect its access to Persian Gulf oil. It wants to become the leading producer of advanced technologies. It wants to create an international order that is more favorable to its interests. A powerful China would be foolish to pass up the opportunity to pursue these goals.

Most Americans do not recognize that Beijing and Washington are following the same playbook, because they believe the United States is a noble democracy that acts differently from authoritarian and ruthless countries such as China. But that is not how international politics works. All great powers, be they democracies or not, have little choice but to compete for power in what is at root a zero-sum game. This imperative motivated both superpowers during the Cold War. It motivates China today and would motivate its leaders even if it were a democracy. And it motivates American leaders, too, making them determined to contain China. 

Even if one rejects this realist account, which emphasizes the structural forces driving great-power competition, U.S. leaders still should have recognized that turning China, of all countries, into a great power was a recipe for trouble. After all, it had long sought to settle its border dispute with India on terms favorable to itself and harbored extensive revisionist goals in East Asia. Chinese policymakers have consistently stated their desire to reintegrate Taiwan, take back the Diaoyu Islands (known in Japan as the Senkaku Islands) from Japan, and control most of the South China Sea—all aims destined to be fiercely resisted by China’s neighbors, not to mention the United States. China has always had revisionist goals; the mistake was allowing it to become powerful enough to act on them.

THE ROAD NOT TAKEN

Had U.S. policymakers accepted the logic of realism, there was a straightforward set of policies they could have pursued to slow economic growth in China and maintain the wealth gap between it and the United States. In the early 1990s, the Chinese economy was woefully underdeveloped, and its future growth depended heavily on access to American markets, technology, and capital. An economic and political Goliath at the time, the United States was in an ideal position to hinder China’s rise. 

Beginning in 1980, U.S. presidents had granted China “most favored nation” status, a designation that gave the country the best possible trade terms with the United States. That favoritism should have ended with the Cold War, and in its place, U.S. leaders should have negotiated a new bilateral trade agreement that imposed harsher terms on China. They should have done so even if the agreement was also less favorable to the United States; given the small size of the Chinese economy, it would have taken a far bigger hit than the U.S. economy. Instead, U.S. presidents unwisely kept granting China most-favored-nation status annually. In 2000, the error was compounded by making that status permanent, markedly reducing Washington’s leverage over Beijing. The next year, the United States blundered again by allowing China to join the World Trade Organization (WTO). With global markets now open, Chinese businesses expanded, their products became more competitive, and China grew more powerful.

Beyond limiting China’s access to the international trading system, the United States should have strictly controlled the export of sophisticated U.S. technologies. Export controls would have been especially effective in the 1990s and the early years of the next decade, when Chinese companies were mainly copying Western technology, not innovating on their own; denying China access to advanced technologies in areas such as aerospace and electronics would almost certainly have slowed its economic development. But Washington let technology flow with few limits, allowing China to challenge U.S. dominance in the critical realm of innovation. U.S. policymakers also made the mistake of lowering barriers to direct U.S. investment in China, which was tiny in 1990 but mushroomed over the next three decades.

At a military celebration commemorating the Xinhua Revolution in Beijing, China, October 2021
At a military celebration in Beijing, October 2021
Carlos Garcia Rawlins / Reuters

If the United States had played hardball on trade and investment, China would surely have turned to other countries for help. But there were limits to what it was able to do in the 1990s. Not only did the United States produce the bulk of the world’s most sophisticated technologies, but it also had several levers—including sanctions and security guarantees—that it could have used to persuade other countries to take a harder line on China. As part of an effort to constrain China’s role in global trade, Washington could have enlisted such allies as Japan and Taiwan, reminding them that a powerful China would pose an existential threat to them. 

Given its market reforms and latent power potential, China would still have risen despite these policies. But it would have become a great power at a much later date. And when it did, it would still have been significantly weaker than the United States and therefore not in a position to seek regional hegemony.

Because relative, rather than absolute, power is what ultimately matters in international politics, realist logic suggests that U.S. policymakers should have coupled efforts to slow China’s economic growth with a campaign to maintain—if not increase—their country’s lead over China. The U.S. government could have invested heavily in research and development, funding the type of relentless innovation required to preserve American mastery over cutting-edge technologies. It could have actively discouraged manufacturers from moving overseas, in order to bolster the United States’ manufacturing base and protect its economy from vulnerable global supply chains. But none of these prudent measures were adopted. 

DELUSIONAL THINKING

Given the liberal triumphalism that pervaded the Washington establishment in the 1990s, there was little chance that realist thinking would inform U.S. foreign policy. Instead, U.S. policymakers assumed that global peace and prosperity would be maximized by spreading democracy, promoting an open international economy, and strengthening international institutions. Applied to China, this logic prescribed a policy of engagement, whereby the United States would integrate the country into the global economy in the hopes that it would become more prosperous. Eventually, it was thought, China would even mature into a rights-respecting democracy and a responsible global actor. Unlike realism, which feared Chinese growth, engagement welcomed it.

For such a risky policy, the breadth and depth of support for engagement was remarkable, spanning four administrations. U.S. President George H. W. Bush was committed to engaging with China even before the Cold War ended. At a press conference after the 1989 Tiananmen Square massacre, Bush justified remaining economically engaged with China by arguing that U.S.-Chinese “commercial contacts [had] led, in essence, to this quest for more freedom” and that economic incentives made democratization “inexorable.” Two years later, when he was criticized for renewing China’s most-favored-nation status, he defended engagement by claiming that it would “help create a climate for democratic change.” 

Bill Clinton criticized Bush for “coddling” China during the 1992 presidential campaign and tried playing tough with Beijing after moving into the White House. But he soon reversed course, declaring in 1994 that the United States should “intensify and broaden its engagement” with China, which would help it “evolve as a responsible power, ever growing not only economically, but growing in political maturity so that human rights can be observed.” Clinton led the way in convincing Congress to grant China permanent most-favored-nation status, which laid the groundwork for its entry into the WTO. “If you believe in a future of greater openness and freedom for the people of China,” he maintained in 2000, “you ought to be for this agreement.”

George W. Bush also embraced efforts to bring China into the global economic fold, promising as a presidential candidate that “trade with China will promote freedom.” In his first year in office, he signed the proclamation granting China permanent most-favored-nation status and took the final steps to guide the country into the WTO.

Convincing adversaries that they cannot achieve quick and decisive wins deters wars.

The Obama administration was more of the same. “Since I’ve been president, my goal has been to consistently engage with China in a way that is constructive, to manage our differences and to maximize opportunities for cooperation,” Barack Obama said in 2015. “And I’ve repeatedly said that I believe it is in the interests of the United States to see China grow.” One might think that the “pivot to Asia,” unveiled by Secretary of State Hillary Clinton in 2011, represented a shift away from engagement and toward containment, but that would be wrong. Clinton was a committed engager, and her Foreign Policy article making the case for the pivot was filled with liberal rhetoric about the virtues of open markets. “A thriving China is good for America,” she wrote. Moreover, save for placing 2,500 U.S. marines in Australia, no meaningful steps were taken to implement a serious containment strategy. 

Support for engagement was also deep and wide within the U.S. business community, which viewed China as a manufacturing base as well as a giant market, with more than one billion potential customers. Trade groups such as the U.S. Chamber of Commerce, the Business Roundtable, and the National Association of Manufacturers undertook what Thomas Donohue, the Chamber of Commerce’s president at the time, called a “nonstop lobbying blitz” to help China get into the WTO. Leading lights in the media also embraced engagement, including the editorial boards of The Wall Street Journal, The New York Times, and The Washington Post. The columnist Thomas Friedman spoke for many when he wrote, “Over time, China’s leaders simply can’t control and monitor their bursting free markets, or prevent little people from getting cheated and then rioting against the government, without the other institutions that must go with free markets—from an effective [securities and exchange commission] to a free and responsible press backed by the rule of law.” Engagement was equally popular in academia. Few China experts or international relations scholars questioned the wisdom of helping Beijing grow more powerful. And perhaps the best indicator of the foreign policy establishment’s overwhelming commitment to engagement is that both Zbigniew Brzezinski and Henry Kissinger—respectively, the most prominent Democratic and Republican Cold War hawks—supported the strategy.

Defenders of engagement argue that their policy allowed for the possibility of failure. Clinton admitted in 2000, “We don’t know where it’s going,” and George W. Bush said the same year, “There are no guarantees.” Doubts like these were rare, however. More important, none of the engagers foresaw the implications of failure. If China refused to democratize, they believed, it would simply be a less capable country. The prospect that it would become more powerful and no less authoritarian did not appear to enter their calculations. Besides, they believed that realpolitik was old thinking.

Some engagers now maintain that the United States hedged its bets, pursuing containment side by side with engagement in case a friendship with China did not flourish. “Just to be safe, . . . we created an insurance policy in case this bet failed,” Joseph Nye, who served in the Pentagon during the Clinton administration, wrote in these pages in 2018. This claim is at odds with the frequent refrain from U.S. policymakers that they were not containing China. In 1997, for example, Clinton described his policy as “not containment and conflict” but “cooperation.” But even if U.S. policymakers were quietly containing China, engagement undermined their efforts, because that policy ultimately shifted the global balance of power in China’s favor. Creating a peer competitor is hardly consistent with containment. 

A FAILED EXPERIMENT

Nobody can say that engagement wasn’t given ample opportunity to work, nor can anyone argue that China emerged as a threat because the United States was not accommodating enough. As the years went on, it became clear that engagement was a failure. China’s economy experienced unprecedented economic growth, but the country did not turn into a liberal democracy or a responsible stakeholder. To the contrary, Chinese leaders view liberal values as a threat to their country’s stability, and as rulers of rising powers normally do, they are pursuing an increasingly aggressive foreign policy. There is no way around it: engagement was a colossal strategic mistake. As Kurt Campbell and Ely Ratner—two former Obama administration officials who recognized that engagement had failed and now serve in the Biden administration—wrote in these pages in 2018, “Washington now faces its most dynamic and formidable competitor in modern history.” 

Obama vowed a tougher line against Beijing during his presidency, contesting its maritime claims and filing suits against it within the WTO, but these halfhearted efforts amounted to little. Only in 2017 did the policy truly change. After Donald Trump became U.S. president, he quickly abandoned the engagement strategy that the previous four administrations had embraced, pursuing containment instead. As a White House strategy document released that year explained, great-power competition had returned, and China now sought to “challenge American power, influence, and interests, attempting to erode American security and prosperity.” Determined to stop China from succeeding, Trump initiated a trade war in 2018 and tried to undermine the technology giant Huawei and other Chinese corporations that threatened the United States’ technological dominance. His administration also developed closer relations with Taiwan and challenged Beijing’s claims in the South China Sea. Cold War II was underway.

One might have expected President Joe Biden to abandon containment and return to engagement, given that he staunchly supported that policy as chair of the Senate Foreign Relations Committee and in the Obama administration. In fact, as president, he has embraced containment and has been as hard-nosed toward China as his predecessor was, pledging “extreme competition” with China shortly after taking office. Congress, too, has come around. In June, the U.S. Innovation and Competition Act sailed through the Senate with bipartisan support. The bill labels China “the greatest geopolitical and geo-economic challenge for United States foreign policy” and controversially calls for treating Taiwan as a sovereign state of “vital” strategic importance. The American public appears to share this view: a 2020 Pew Research Center poll found that nine in ten Americans considered China’s power a threat. The new U.S.-Chinese rivalry is not ending anytime soon. In fact, it is likely to intensify, no matter who is in the White House.

THE DANGER OF A HOT WAR

Engagement’s remaining defenders now portray the downward spiral in U.S.-Chinese relations as the work of individuals who are bent on creating a U.S.-Soviet-style confrontation—“New Cold Warriors,” in the words of the former George W. Bush administration official Robert Zoellick. In the engagers’ view, the incentives for further economic cooperation outweigh the need to compete for power. Mutual interests trump conflicting interests. Regrettably, the proponents of engagement are whistling in the wind. Cold War II is already here, and when one compares the two cold wars, it becomes apparent that the U.S.-Chinese rivalry is more likely to lead to a shooting war than the U.S.-Soviet rivalry was.

The first point of contrast between the two conflicts concerns capabilities. China is already closer to the United States in terms of latent power than the Soviet Union ever was. At the height of its power, in the mid-1970s, the Soviet Union had a small advantage in population (less than 1.2 to 1) and, using GNP as a rough indicator of wealth, was almost 60 percent as wealthy as the United States. In contrast, China now has four times as many people as the United States and is about 70 percent as wealthy. If China’s economy continues growing at an impressive rate of around five percent annually, it will eventually have more latent power than the United States. It has been projected that by 2050, China will have a population advantage of approximately 3.7 to 1. If China has half of the United States’ per capita GDP in 2050—roughly where South Korea is today—it will be 1.8 times as wealthy as the United States. And if it does better and reaches three-fifths of U.S. per capita GDP by then—roughly where Japan is today—it will be 2.3 times as wealthy as the United States. With all that latent power, Beijing could build a military that is much more powerful than the United States’, which would be contesting China’s from 6,000 miles away.

Not only was the Soviet Union poorer than the United States; during the height of the Cold War, it was also still recovering from the horrific devastation wreaked by Nazi Germany. In World War II, the country lost 24 million citizens, not to mention more than 70,000 towns and villages, 32,000 industrial enterprises, and 40,000 miles of railroad track. It was in no position to fight the United States. China, in contrast, last fought a war in 1979 (against Vietnam) and in the ensuing decades became an economic juggernaut. 

The U.S. flag and the Chinese flag fluttering in Shanghai, China, April 2021
In Shanghai, April 2021
Aly Song / Reuters

There was another drag on Soviet capabilities that is largely absent in China’s case: troublesome allies. Throughout the Cold War, the Soviet Union maintained a huge military presence in Eastern Europe and was deeply involved in the politics of almost every country in that region. It had to contend with insurrections in East Germany, Poland, Hungary, and Czechoslovakia. Albania, Romania, and Yugoslavia routinely challenged Moscow’s economic and security policies. The Soviets also had their hands full with China, which switched sides midway through the Cold War. These allies were an albatross around Moscow’s neck that distracted Soviet leaders from their principal adversary: the United States. Contemporary China has few allies and, except when it comes to North Korea, is far less tied to its friends than the Soviets were to theirs. In short, Beijing has greater flexibility to cause trouble abroad.

What about ideological motivations? Like the Soviet Union was, China is led by a nominally communist government. But just as Americans during the Cold War were wrong to view Moscow as primarily a communist threat, determined to spread its malign ideology around the globe, it would be a mistake to portray China as an ideological menace today. Soviet foreign policy was influenced only on the margins by communist thinking; Joseph Stalin was a hardcore realist, as were his successors. Communism matters even less in contemporary China, which is best understood as an authoritarian state that embraces capitalism. Americans should wish that China were communist; then it would have a lethargic economy.

But there is an “ism” that China has in spades, one that is likely to exacerbate its rivalry with the United States: nationalism. Normally the world’s most powerful political ideology, nationalism had limited influence in the Soviet Union because it was at odds with communism. Chinese nationalism, however, has been gathering steam since the early 1990s. What makes it especially dangerous is its emphasis on China’s “century of national humiliation,” a period beginning with the First Opium War, during which China was victimized by great powers, especially Japan but also, in the Chinese narrative, the United States. The effects of this potent nationalist story were on display in 2012–13, when China and Japan skirmished over the Diaoyu/Senkaku Islands, igniting anti-Japanese protests across China. In the coming years, the intensifying security competition in East Asia will surely ramp up Chinese hostility toward Japan and the United States, increasing the likelihood of a hot war. 

Also raising the odds of war are China’s regional ambitions. Soviet leaders, busy recovering from World War II and managing their empire in Eastern Europe, were largely content with the status quo on the continent. China, by contrast, is deeply committed to an expansionist agenda in East Asia. Although the main targets of China’s appetite certainly have strategic value for China, they are also considered sacred territory, which means their fate is bound up with Chinese nationalism. This is especially true of Taiwan: the Chinese feel an emotional attachment to the island that the Soviets never felt for Berlin, for example, making Washington’s commitment to defend it all the riskier.

The new cold war is more war-prone than the old one.

Finally, the geography of the new cold war is more war-prone than that of the old one. Although the U.S.-Soviet rivalry was global in scope, its center of gravity was the Iron Curtain in Europe, where both sides had massive armies and air forces equipped with thousands of nuclear weapons. There was little chance of a superpower war in Europe, because policymakers on both sides understood the fearsome risks of nuclear escalation. No leader was willing to start a conflict that would likely have destroyed his own country. 

In Asia, there is no clear dividing line like the Iron Curtain to anchor stability. Instead, there are a handful of potential conflicts that would be limited and would involve conventional arms, which makes war thinkable. They include fights for control over Taiwan, the South China Sea, the Diaoyu/Senkaku Islands, and the maritime routes that run between China and the Persian Gulf. These conflicts would be fought mainly in open waters between rival air and naval forces, and in those instances in which control of an island was at play, small-scale ground forces would likely take part. Even a fight over Taiwan, which might draw in Chinese amphibious forces, would not involve huge nuclear-equipped armies crashing into each other.

None of this is to say that these limited-war scenarios are likely, but they are more plausible than a major war between NATO and the Warsaw Pact was. Still, one cannot assume that there would be no nuclear escalation should Beijing and Washington fight over Taiwan or the South China Sea. Indeed, if one side were losing badly, it would at least consider employing nuclear weapons to rescue the situation. Some decision-makers might conclude that nuclear weapons could be used without an unacceptable risk of escalation, provided the attacks took place at sea and spared the territory of China and the United States and its allies. Not only is a great-power war more likely in the new cold war, but so is nuclear use. 

A Rival of America’s making

Although their numbers have dwindled, advocates of engagement remain, and they still think the United States can find common ground with China. As late as July 2019, 100 China watchers signed an open letter to Trump and members of Congress rejecting the idea that Beijing was a threat. “Many Chinese officials and other elites know that a moderate, pragmatic and genuinely cooperative approach with the West serves China’s interests,” they wrote, before calling on Washington to “work with our allies and partners to create a more open and prosperous world in which China is offered the opportunity to participate.”

But great powers are simply unwilling to let other great powers grow stronger at their expense. The driving force behind this great-power rivalry is structural, which means that the problem cannot be eliminated with clever policymaking. The only thing that could change the underlying dynamic would be a major crisis that halted China’s rise—an eventuality that seems unlikely considering the country’s long record of stability, competence, and economic growth. And so a dangerous security competition is all but unavoidable.

At best, this rivalry can be managed in the hope of avoiding a war. That would require Washington to maintain formidable conventional forces in East Asia to persuade Beijing that a clash of arms would at best yield a Pyrrhic victory. Convincing adversaries that they cannot achieve quick and decisive wins deters wars. Furthermore, U.S. policymakers must constantly remind themselves—and Chinese leaders—about the ever-present possibility of nuclear escalation in wartime. Nuclear weapons, after all, are the ultimate deterrent. Washington can also work to establish clear rules of the road for waging this security competition—for example, agreements to avoid incidents at sea or other accidental military clashes. If each side understands what crossing the other side’s redlines would mean, war becomes less likely.

These measures can only do so much to minimize the dangers inherent in the growing U.S.-Chinese rivalry. But that is the price the United States must pay for ignoring realist logic and turning China into a powerful state that is determined to challenge it on every front.

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