The Avoidable War: The Dangers of a Catastrophic Conflict between the US and Xi Jinping's China

by Kevin Rudd

In Thucydides’s History of the Peloponnesian War, the ancient historian concluded that “it was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.” Allison explains that Thucydides’s Trap is “the natural, inevitable discombobulation that occurs when a rising power threatens to displace a ruling power.” In Thucydidean logic, the threat of such displacement causes structural stress in the relationship, which makes a violent clash the rule, not the exception. According to Allison’s model, based on his examination of multiple historical case studies, war is more likely than not. Embedded in Allison’s logic is the implication that there are also real and perceived tipping points in the great power relationship in question, which means the question for policy makers is what to do to either preempt them or respond to them before it’s too late.

substantial portion of this book is therefore devoted to defining Xi’s core priorities, which will likely be the main lens for Chinese policy making in the decades ahead. To my mind, they can best be understood as ten concentric circles of interests, starting with the most vital (which are, not coincidentally, those closest to home) and expanding outward from China to encompass greater and more global ambitions.

In other words, both from the classical texts and more recent modern examples, war under these circumstances may be probable—but it is by no means inevitable. History should always be our guide but never our master.

The exception was the alternative universe of Trump—although as president of the Asia Society Policy Institute in New York, I was able to strike up a good, respectful, and professional relationship with Trump’s USTR, Bob Lighthizer, who was usually a voice of quiet reason in the midst of the chaos.

As then–Vice Premier Wang Qishan famously observed to then–US Treasury Secretary Hank Paulson, “You were my teacher, but… look at your system, Hank. We aren’t sure we should be learning from you anymore.”

As a result, the US often concludes that the best course of action is to distrust anything the CCP says. Instead, America’s predisposition is to connect the dots itself, as best it can, to try to divine China’s actual strategic intentions—in other words, to assume the worst and to prepare accordingly. This is understandable within the framework of the long-standing realist traditions of American foreign policy. It can, however, also be counterproductive if it discounts Chinese declaratory positions in their entirety. China’s official media, while rarely providing a clear picture of Chinese political decision-making, nonetheless can be helpful in understanding the conceptual framework within which the party is operating and where changing political and policy positions may be emerging. After all, CCP leadership has to communicate its message to its ninety-five million members and to the country at large and, in doing so, cannot rely on classified party documents alone. Reading the Chinese media is sometimes like watching a movie on mute without subtitles: you have a general idea of what’s going on, but other sources of information are necessary to provide a better, albeit never complete, understanding of the detailed story line.

Graham Allison’s

Where Xi has changed China’s worldview has been in the reinvigoration of the party’s Marxist-Leninist foundations, the turbocharging of Chinese nationalism, and the sharpening of the country’s national ambitions.

1. The centrality of Xi and the party and the hard business of staying in power:

2. Maintaining and securing national unity:

3. Growing the Chinese economy:

4. Environmental sustainability:

5. Modernizing the military:

6. Managing China’s neighboring states:

But Chinese historiography also teaches that purely defensive measures have not always succeeded.

7. Securing China’s maritime periphery in East Asia and the west Pacific:

that the United States would choose not to fight. Xi’s objective is to secure China’s territorial claims in the East China Sea, the South China Sea, and Taiwan without ever having to fire a shot—and eventually displace the United States as the dominant military power in the Asia-Pacific.

8. Securing China’s western continental periphery:

9. Increasing Chinese leverage across the developing world:

10. Rewriting the global rules-based order:

Xi Jinping reversed all this. He realized that if the party was taken out of the country’s most important policy decision-making processes, it would lose its relevance altogether and, in time, fade away. Not being prepared to stand idly by while that happened, Xi decided to intervene decisively and reverse this trend. Under his leadership, we have seen the return of the party to the epicenter of the Chinese political and economic policy-making process.

According to the official line, a long-standing continuity of benign hierarchical governance (as represented by Confucianism) is what differentiates China from the rest of the world. The shorthand form of Xi’s political narrative is simple: China’s historical greatness, across its dynastic histories, always lay in strong, authoritarian, hierarchical Confucian governments.

By extension, China’s future national greatness can lie only in the continued adaptation of its indigenous political legacy, derived from the hierarchical tradition of the Confucian/communist state.

They also understand that the only real source of employment growth in China’s economy over the last thirty years has come from the private sector—not state-owned enterprises (SOEs)—although this has become increasingly ideologically contentious in Xi Jinping’s China.

if economic growth, private-sector business formation, and employment falter, this of itself generates the very social and political unrest that Xi Jinping’s political strategy seeks to avoid.

Despite the aberrations of US human rights advocacy during the Trump presidency, Beijing knows that the US remains the country least likely to buckle to its pressure to remain silent on this existential political issue for the Chinese Communist Party.

In a civilization where the party claims human rights, electoral democracy, and an independent legal system have always been alien concepts within the Chinese tradition, they have sought to identify more accommodating Chinese alternatives, such as the Confucian system of mutual obligation tying citizens to rulers.

the Sinification of Marxism itself.

All previous Chinese rulers have struggled with the almost impossible challenge of maintaining political control over the country’s vast population, its formidable geography, and the power of local elites—a difficulty encapsulated by the oft-cited twelfth-century proverb, “The mountains are high, and the emperor is far away.”

Even normally pro-Beijing KMT leaders in Taiwan were forced to publicly disavow “one country, two systems.” The crackdown in Hong Kong offered yet more evidence that in an increasingly authoritarian China, domestic political and policy dissent would no longer be tolerated. This left Beijing with ever-declining credibility in its efforts to bring about a negotiated political compact with rambunctiously democratic Taiwan. Indeed, the Taiwanese people are now unlikely to ever yield to any form of “political deal” between its political elites and China. That being the case, Beijing is likely to conclude that political, economic, and military coercion are the only options remaining on the policy shelf.

Xi finds himself wrestling with five major interconnected, and in some cases conflicting, challenges in China’s unfolding political economy: (1) to maintain economic growth to provide employment and rising living standards; (2) to do so while maintaining an optimal internal balance between the state and the market without ceding the party’s political control to a new generation of entrepreneurs; (3) to ensure that growth is better distributed than in the past so that economic inequality is reduced; (4) to impose new carbon constraints on China’s previous economic development model to deal with the now accepted reality of climate change; and (5) to manage the external economic pressures now being applied by the United States on trade, investment, and technology.

New Development Concept (NDC).

the NDC came to embody the confluence of three key priorities: nationalist self-reliance, his protectionist concept of a dual-circulation economy, and his new redistributive doctrine of common prosperity.

Xi’s dual-circulation strategy is fundamentally a bid to make China’s economy more resilient to external shocks brought on by geostrategic turmoil, global supply chain disruption, punitive tariffs, and a contraction in global trade. It therefore goes hand in hand with self-reliance as a means of reducing China’s overall vulnerability to outside forces.

Calling on the rich to participate in charitable causes or otherwise assuming wider social responsibilities, “tertiary distribution” is, in essence, forced philanthropy.

neijuan, or involution, which describes a turning inward by individuals or society due to what one social media post described as a “prevalent sense of being stuck in a draining rat race where everyone loses.”

tangping, or lying flat, in which people resolve to do the absolute bare minimum of work in life, relying instead on the generosity of the state.

“In recent years, some public opinions at home and abroad have raised questions about whether China is currently still socialist. Some people say it is ‘capital socialist,’ while others simply say it is ‘state capitalist.’… These are all completely wrong!” Rather, he said, “socialism with Chinese characteristics is socialism,” and “only socialism can save China, and only socialism with Chinese characteristics can develop China. This is the conclusion of history and the people’s choice.”

And the yuan was still, at best, a marginal player in the international currency system, with 62 percent of global reserves held in US dollars, 20 percent in Euro, 5 percent in Japanese yen, and 4 percent in pounds sterling, whereas less than 2 percent were in yuan—about the same as global reserve holdings of the Australian dollar.

The remaining five circles of interest extend outward, covering Xi’s ambitions in the world beyond China’s shores. There is both a conventional and classical Chinese logic to this sequence: strength at home is fundamental to whatever ambitions Xi may pursue abroad.

Moreover, Russia’s relative economic decline during the 1990s, at a time when the Chinese economy was growing rapidly, further reduced Chinese perceptions of its vast common border with Russia being a threat. These changes fundamentally altered the dynamic between the two countries. It also caused a reluctant Moscow to accept, over time, its newfound junior status in the relationship. This was not an easy pill for the Russians to swallow, especially given their sense of vulnerability arising from the small Russian population in the Far East—in contrast to the vast Chinese population lying to their immediate south.

Regardless, the less China has to worry about Korea and its other neighbors, the more it can start to look beyond its most immediate neighborhood in Northeast Asia.

foreign direct investment (FDI)

Meanwhile, Trump’s decision to abandon the Trans-Pacific Partnership free trade agreement and refusal to engage in the Regional Comprehensive Economic Partnership with ASEAN and five other regional states were universally interpreted across the region as tantamount to wholesale American economic withdrawal. Diplomatically, the Trump administration could not even be bothered to turn up at presidential-level major regional summits, including APEC and the East Asian Summit, over several years. This has left a lasting negative legacy in the region that the Biden administration has yet to turn around—especially given its hesitancy toward multilateral free trade agreements.

Whereas China currently lacks strategic reach into the Pacific, America’s allies afford the United States an extraordinary advantage. This is a state of affairs that Xi Jinping wants to reverse.

China had considerable success on this score during the years of the Trump administration—both as a product of its strategic efforts and because of the negative impact of the Trump phenomenon itself on the resilience and cohesion of American alliance relationships.

China then quickly selected a target on which to use its stick. A classical Chinese axiom advises to “kill one to warn a hundred” (shayi jingbai), but in this case, the goal was to kill one (Australia) to warn two (Japan and India).

As the Quad continued to solidify and the scope of its activities expanded, entering into a series of new bilateral and multilateral security agreements and exercises, Beijing’s confidence that the Quad could be split apart waned. China seemed not to have fully comprehended the impact of their actions in accelerating overall Quad solidarity. Moreover, China’s ability to execute a coherent strategy of simultaneous targeted escalation with Australia and de-escalation with Japan and India was badly undermined by the lack of discipline of its ultranationalistic wolf warrior diplomats, who succeeded in regularly offending countries across the globe.

Finally, the election of President Biden and his focus on allied, regional, and multilateral engagement changed the dynamic. China lost the relative freedom of diplomatic international maneuver it had during the “America First” days of the Trump administration. The new administration was willing to quickly resolve Trump-era trade and military-basing disputes with US allies such as Japan and South Korea, stabilizing relations. Whereas during the Trump period, Beijing largely pushed on an open door in its efforts to bolster its influence with other countries in the region, it suddenly faced a much more united front from Washington and its allies and partners.

All this has reinforced Beijing’s worst fear: that not only could the Quad expand—for example, by taking in South Korea to become “the Quint”—but also that it could become the multilateral building block for a broader anti-China coalition of North American, European, and Asian liberal-democratic states.