by Nathan Smith

If it’s true that what’s happening in Iran is about the US creating a final way to step back from the Middle East and turn its full attention to the real strategic challenge of China, what does that mean, exactly?

Running an empire ain’t easy. Every empire eventually learns that its own imperial troops are insufficient to maintain security and peace across the entire realm. Supply lines quickly get overstretched.

What’s needed is local assistance, solid propaganda and clever balances of power. The trick is to find two regional heavyweights and play one off the other politically. These two balanced powers will then do the heavy lifting of maintaining peace in the region because it is in their interest to do so. Iraq was once the strategic balance for Iran, but now that Iraq has been cast into the pits of anarchy, Washington is hoping to balance Iran with Israel. At least, that’s my read of the situation.

Once Washington is happy with the new status quo in the Middle East, that will free up a lot of brain space to concentrate on managing the much more difficult imperial problem posed by a rising power like China. If you thought the Middle East issue was tough, consider that China and the US are deeply tied together in every conceivable way – economic, technological, military and ideological all at once. That was never the case in the desert.

It’s important to point out at the start that there are no good reasons for the US and China to become rivals, but plenty of bad reasons. The real conundrum is that everything changes eventually, and the key question both Washington and Beijing are asking is: What happens if they start walking down the wrong path?

At its core, the US/China rivalry comes down to three things: size, ambition and the simple fact that both countries matter a lot to each other.

Unfortunately, the US has never faced a challenge quite like this. China is not the Soviet Union, and the rivalry cannot be described as a new Cold War. Unlike the USSR, China is not cut off from the world and is tightly woven deep into the US economy. Nevertheless, by some measures, China is already the world’s largest economy due to its domination of global manufacturing. It is also pushing hard to develop the technologies that will define the next few decades, such as artificial intelligence, quantum computing and biotech. As such, only the US and China can be said to have modern militaries today (defined as access to frontier AI systems). Everyone else is still trapped in the 20^th century.

Because of this, Washington is worried that China’s behaviour increasingly looks assertive. China’s military has rapidly grown in both absolute and strategic terms and now has the potential capability to challenge US forces, especially near China’s shores. In places like the South China Sea, it has shown it can slowly change the political situation on the ground (and on the waves) without triggering a serious response from the US. China regularly pushes other Western Pacific countries around and gets away with it. At the same time, China is using economic tools to exert pressure in new ways that often fall outside the traditional US-led global system.

But calling China a “threat” is misleading. That’s not Washington’s model of thinking. Competitor, yes. Adversary, sure. But a threat? That’s a bit too strong. But does China feel the same way? How does China think about the US?

To understand China’s actions, you have to start with how it describes its own story.

Chinese leaders do not think of their country as “rising.” They see it as returning and reclaiming a place it once held before a long period of decline and humiliation. That idea of “rejuvenation” is the overt narrative in almost everything China does. The Chinese people and most of its leaders are increasingly believing the erroneous view that the US has weakened itself through long wars, financial shocks and internal political division. China, by contrast, sees itself as having spent decades building economic strength and stability.

China is determined not to fall behind again. Chinese leaders believe they missed earlier industrial revolutions, and they are not going to miss the next one, centred on AI. They want to lead the era of artificial intelligence, not follow it. By this logic, China’s president Xi Jinping has encouraged Chinese officials to adopt greater directness, both at home and abroad. The tone of its diplomacy has also hardened. Its actions in places like Hong Kong and Xinjiang reflect a leadership that is less concerned about international opinion and more focused on internal control.

But the Politburo is fully aware of the serious pressures facing China. Its society is ageing rapidly. Its environment is under strain. It has huge amounts of debt. And it is trying to become a fully developed economy without making political changes. Managing all this is proving to be far more difficult than Beijing expected, but it’s doing a decent job.

The thing is, China has also started to act like it believes its own story about communism and the inevitable “clash” with capitalism. This attitude shows up again and again in its diplomacy, its military posture and in its economic behaviour. China thinks it smells blood in the water seeping from a weakened US empire, and has decided that the original communist prophecy must be true. Although the entire Politburo may not believe this, enough of its members appear to. And if they convince themselves to believe too strongly in the communist dialectic, they may begin to misjudge how far China can push the US. After all, overconfidence can be just as dangerous as weakness.

The US is not blind to the changing worldview of Chinese elites. US presidents come and go, but there is broad agreement across American politics that the relationship with China requires a measure of consistency. That’s why the so-called “trade war” didn’t start with Donald Trump and didn’t stop when Joe Biden (briefly) took control. The problem is that the US strategy has, for many years, felt reactive rather than proactive. Instead of setting out clear long-term plans, it has tended to respond to China step by step on trade, technology and security.

So, what parts of China’s rise can the US live with, and what parts can it not? The first step to solving this problem successfully (for everyone) would require the US to be clear about international red lines and then actually enforcing them. It would also mean accepting that the US is no longer in control of the pace of its relationship with China.

Alliances will be more important for success. One of America’s biggest advantages is the “international community, which is a euphemism for its empire. But maintaining those relationships takes work, especially when economic security is seen as national security in East Asia. Those partners also need to see more political unity in the US. Political division and economic pressures at home are increasingly shaping Washington’s foreign policy in ways that are not always helpful. If the US wants to compete effectively with China, it needs to get its own house in order. This means that once Trump’s term is over, the US empire will work very hard to block another disruptive figure from entering politics. Goodbye MAGA, we hardly knew thee.

The biggest risk is miscalculation. If we go to the darkest corner of the room and imagine the US/China relationship breaking down completely, even the most sober analysts fear it could result in a war on a scale the world has not seen since the 1940s. The US and China are the two most powerful militaries on the planet, likely with weapons no one knows about. A direct war between them would be catastrophic.

Taiwan is the most obvious flashpoint for most observers. But I doubt an invasion is on the cards. China seems to get more bang for its buck by using a slow squeeze to wear Taiwan down over time. It will likely use economic blockades, aggressive pushing and shoving in the waters and heavy political pressure. That kind of approach will be much harder for the US to respond to. In many ways, a D-Day-style assault on Taiwan by China is probably the preferred option for Washington, simply because that would be the easiest to deal with (in strategic terms). Countering a messy, grey-zone pressure campaign will be much more difficult, and one that the US system isn’t really designed to deal with.

Both sides are aware of the risks. Both sides see this problem as pass/fail for the future of their societies. Yet both are inexorably moving into uncharted historical territory. China sees itself as coming back, while the US sees itself going nowhere. Can these misaligned visions be managed without leading to conflict?

Easier said than done. But it can be done because it is in everyone’s interest to ensure that it is done.

Originally published on The Good Oil.