Political Theory and the US-China Relationship: 

War or Cooperation?

Published November 2024. 

A rising superpower challenges the existing global leader. Both are nuclear-armed, their economies deeply intertwined. They compete intensely, from the waters of Taiwan to Silicon Valley, but can’t afford open conflict. So, where’s the line between competition and catastrophe?

As we approach the mid-2020s, the relationship between the United States and China challenges the existing global order, and poses fundamental questions about political systems, power, and the future of capitalism.  This post aims to move beyond geopolitical analysis to probe deeper theoretical questions about how political systems evolve and interact in our interconnected age.


The Chinese System of Government

The Chinese Communist Party (CCP), with its 99 million members representing roughly 7% of China’s population, presents a fascinating case study in modern authoritarianism. Unlike traditional dictatorships, China’s system combines rigid political control with remarkable economic dynamism – a hybrid that challenges Western assumptions about the relationship between economic and political freedom.


This hybrid system faces several theoretical contradictions. First is the corruption paradox: how can a one-party state effectively combat corruption when power flows only from top to bottom? Without independent institutions – no free press, no independent judiciary, no separation of powers – the system creates a recursive problem. Those tasked with fighting corruption are themselves potentially corrupt, and those who might expose corruption are controlled by the potentially corrupt. When Xi came to power in 2012, he created his reputation by fighting corruption, but he also used the process to subdue or eliminate his political opponents. There is a structural flaw in the system, and it reminds us of  Montesquieu’s 18th-century arguments for the separation of powers, which China’s Marxist-Leninist system explicitly rejects.


The legitimacy question is equally pressing. The CCP has traditionally relied on economic growth for legitimacy – delivering average GDP growth of around 9% annually between 1978 and 2019. But as growth inevitably slows (China’s GDP growth was 5.2% in 2023), the party faces a fundamental challenge: how does an unelected government maintain authority without the performance legitimacy of dramatic economic growth? The answer, increasingly, appears to be nationalism – but this creates its own dangers in an interconnected world.


The information control dilemma presents another challenge. The CCP does not allow criticism, and hates transparency – a key requirement for democracy. China’s “Great Firewall” blocks access to Facebook, Google, Twitter, and many Western news sources. The government employs thousands of censors and invests billions in control technology. Yet information still flows through VPNs, personal connections, and business networks. In 2023, an estimated 31% of Chinese internet users employed VPNs to access blocked content. This raises a crucial question: in an age where global information flows are essential for economic competitiveness, can any government maintain effective information control without sacrificing economic dynamism?


Perhaps most intriguing is what we might call the Communist Party’s capitalist contradiction. China’s Gini coefficient (a measure of income inequality) stands at 0.485, similar to the United States (0.484) and significantly higher than Taiwan (0.338). This means a nominally Communist state has presided over the creation of inequality levels matching the world’s leading capitalist power. The party’s recent “common prosperity” campaign implicitly acknowledges this contradiction, but addressing it would require fundamental changes to the economic model that has delivered China’s remarkable growth. The Chinese state sincerely struggles with its own identity: Is it socialism with Chinese characteristics? Does it have a state-controlled market economy, or is it still committed to the dream of a communist society? In order to catch up with the West, Deng Xiaoping famously opened the doors to capitalism in 1978, with slogans like: “To get rich is glorious.” China may never be able to close these doors again, no matter how it tries to define itself.


These contradictions point to deeper questions about political systems in the 21st century. Is China creating a new form of authoritarian party-state capitalism that could prove more durable than Western liberal democracies? The evidence is mixed. China’s system has shown remarkable adaptability, but its contradictions create increasing stress points. The need for information control conflicts with economic dynamism. The desire for market efficiency clashes with party control. The demand for clean government contradicts with the absence of independent oversight.


Looking forward, several scenarios emerge. One possibility is that China’s system will prove more adaptable than Western skeptics expect, creating a new model of state-controlled capitalism that other nations might emulate. Another is that internal contradictions will force significant reforms, leading to a hybrid system different from both current China and Western democracies. A third possibility is crisis and instability as the system’s contradictions become unmanageable.


The implications extend far beyond China. If China’s model proves sustainable, it challenges fundamental Western assumptions about the relationship between economic and political freedom. If it fails, the global repercussions would be enormous. The world’s two largest economies remain deeply intertwined, with bilateral trade reaching $758 billion in 2022 despite political tensions.


These questions arise within the context of changing global power dynamics. China’s economy is already larger than the U.S. in purchasing power parity terms ($27.7 trillion vs $20.9 trillion in 2021). By some estimates, China’s GDP could exceed America’s in nominal terms by 2030. This raises perhaps the most crucial theoretical question: can the global system accommodate a non-democratic superpower without fundamental destabilization?


These questions don’t have predetermined answers. Much depends on choices made in both Washington and Beijing. But understanding the theoretical contradictions and challenges in both systems becomes crucial for anticipating and shaping future developments. As we move deeper into what many call the “Chinese Century,” these questions of political theory become increasingly practical concerns for policymakers and citizens worldwide.


Potential Flashpoints and Conflict Scenarios

The systemic contradictions in US-China relations manifest in several potential flashpoints. The most immediate and dangerous is Taiwan. China views Taiwan as a breakaway province that must be reunited with the mainland, while the US maintains strategic ambiguity about its defense commitments while supplying Taiwan with defensive weapons. The risk of miscalculation is high – Chinese military exercises near Taiwan, coupled with US freedom of navigation operations, create regular opportunities for escalation.


The South China Sea represents another critical flashpoint. China has constructed artificial islands and military installations across disputed waters, challenging international norms and threatening key shipping routes through which approximately $3.4 trillion in annual trade passes. The US regularly conducts freedom of navigation operations to contest China’s claims, creating potential for direct military confrontation.


Less visible but equally dangerous is the ongoing cyber and technology warfare. The US has implemented unprecedented restrictions on semiconductor exports to China, particularly affecting advanced chips crucial for AI development and military applications. China’s response includes intensified efforts to develop indigenous technology capabilities and potential cyber retaliation. This technological decoupling could escalate into broader economic warfare.


The Korean Peninsula remains another potential trigger for conflict. North Korea’s nuclear program and China’s role as its primary ally create a complex dynamic. Any US military action against North Korea’s nuclear facilities could prompt Chinese intervention, as it did during the Korean War (1950-1953) when Chinese casualties reached 500,000-600,000 against 36,000 US deaths. The cost to the Koreans was even higher: More than 2 million of them died, and we still live with the monstrosity of a North Korean dictatorship. 


The American Response

The United States has crafted a multi-layered response to China’s rise, termed “strategic competition.” This approach includes several key elements:



The Possibility of “Managed Strategic Competition”

In his 2022 book:  “The Avoidable War: The Dangers of a Catastrophic Conflict between the US and Xi Jinping’s China,” Kevin Rudd argues for a framework of “managed strategic competition” to prevent these tensions from escalating into open conflict. This would involve:


However, implementing such a framework faces significant challenges. Domestic politics in both countries increasingly rewards hawkish positions. China’s nationalist turn under Xi Jinping, combined with American concerns about economic and technological competition, makes compromise politically more and more difficult.


The Stakes of Failure

The consequences of failing to manage this competition would be catastrophic. A military conflict could kill millions and devastate the global economy. Even a “limited” Taiwan conflict could disrupt semiconductor supply chains (Taiwan produces 92% of advanced semiconductors) and global trade routes. A full economic decoupling would likely trigger a global recession.


Yet the current trajectory raises concerns. China’s military budget has grown at an average annual rate of 7.1% over the past decade, while US military spending increasingly focuses on China-related capabilities. Both sides are preparing for potential conflict while claiming to seek peace.


The fundamental question remains: can two powers with incompatible political systems and overlapping spheres of influence find a way to compete without catastrophic conflict? History offers few encouraging precedents, but the cost of failure – in an era of nuclear weapons and economic interdependence – demands we find a way. Understanding these dynamics, from theoretical contradictions to practical flashpoints, becomes crucial for policymakers and citizens alike as we navigate this defining challenge of the 21st century.