ARE THE US AND CHINA DESTINED FOR WAR?

Nov 15

Historians call it “The Thucydides Trap.” Are we currently in it?

Imagine this scenario sometime in the near future:

A newly elected Taiwanese pro-independence party shuns the so-called 1992 Consensus in which both parties honored the One China concept. In response, Beijing closes the Taiwan Strait and implements a naval blockade. The U.S. Indo-Pacific Command orders its fleet to escort civilian ships through the hostile area, but a PLA Navy warship detains a Japanese trawler. Citing the mutual defense treaty with Japan, a U.S. destroyer comes to the trawler’s aid. The naval combatants collide, and the PLA Navy destroyer sinks. Fearing a retaliatory response, the U.S. Navy launches a squadron of F-35s to patrol China’s militarized Mischief Reef to preempt a possible PLA air attack. President Xi Jinping condemns the action and orders the PLA to fire a hypersonic missile at the F-35 squadron’s aircraft carrier steaming 400 miles south of Taiwan. More than 5,000 U.S. sailors die. Americans won’t stand for it. The world is at war.

This paraphrases one of several ominously plausible scenarios in Graham Allison’s 2018 book Destined for War: Can America and China Escape the Thucydides Trap? In this scholarly work, Graham defines the Trap as a condition of international relations in which rising and ruling powers are destined for conflict. The U.S. and China, he asserts, are the seventeenth Trap competitors, destined for war. Is he right?

In forecasting that chilling outcome, Allison analyzes sixteen strategic power competitions over two thousand years in which ruling and rising nations have clashed. Of the sixteen, twelve resulted in war. (Allison, 2018)

Parallels to the U.S.-China relationship abound. To begin with, the U.S. is unquestionably the world’s ruling power. Since the end of World War II, it has amassed dominant economic, military, and diplomatic might. As measured by nominal GDP, its economy is the world’s largest at $29 trillion, followed by China’s $18 trillion. American economic leadership and relative political stability have made the dollar the world’s reserve currency, giving it unparalleled borrowing capacity. The U.S. spends more than any other country on defense, patrols the world’s oceans with a vast fleet, and maintains a global military architecture across 750 bases in eighty countries (Vine, 2021).

Per Allison’s Trap, America’s status as a ruling power should make it fearful of a change to the status quo, and there is evidence that it does. In October 2024, the Chicago Council on Global Affairs found that 55% of Americans say the United States should actively work to limit the growth of China’s power. Although China and the U.S. have the world’s most significant bilateral trading relationship, a majority of Americans (56%) believe US-China trade weakens American national security (Kafura, 2024).

Moreover, these widespread fears factor into American politics. In 2022, the U.S. House of Representatives formed the bipartisan “Select Committee on the Chinese Communist Party (CCP).” Its hearings in the last six months are rife with worrisome alarm bells with titles such as “From High Tech to Heavy Steel: Combatting the PRC’s Strategy to Dominate Semiconductors, Shipbuilding, and Drones” and “Authoritarian Alignment: the CCP’s Support for America’s Adversaries (Bray, 2024).”

On the other side of the Trap equation, China has certainly been on the rise. From Deng Xiaoping’s economic reforms in 1978 to 2018, China’s economy grew an average of 9.5% per year, which the World Bank described as the fastest sustained economic growth in world history. Though the United States maintains a larger nominal GDP, if measured by purchasing power parity (PPP), China’s economy is already the world’s largest (International Monetary Fund, 2024).

China’s burgeoning economy funds a military that many estimate is already a peer to the U.S., particularly at sea. Xi Jinping has called on the PLA to modernize by 2035 and to become “world-class” by 2049. In 2015, Xi made sweeping changes to the traditional PLA reporting structure to emulate American military organization and installed himself at the top of the chain of command (Chase, 2020).

While American defense spending has been flat or negative relative to GDP, China’s defense budget has kept pace with its economic growth, nominally growing 11.7% annually (Robertson, 2024). It has embarked on naval modernization, foreign bases, and weapons systems that appear deliberately designed to fight the U.S. Navy’s stronghold in the Western Pacific.

Furthermore, China shows the tendencies of a regional hegemon. Upending American naval dominance in the South China Sea and the established rule of the seas as a “commons” with freedom of navigation for all nations, China has declared its Economic Exclusion Zone (EEZ) off-limits to other countries. In what it calls the “Nine-Dash Line,” China has extended its maritime defensive shield hundreds of miles off-shore and constructed air and missile bases on territorially disputed reefs (Hendrix, 2020). When pressed by the Philippines on the illegality of its actions in 2016 based on the UN’s law of the sea, China lost the case—and ignored the ruling (Campbell, 2016).

The Chinese people also exhibit traits of a rising power that would seek to challenge the status quo. A growing sense of nationalism in China targets the U.S. as a chief instigator of economic and territorial problems (Wang, 2024).

Perhaps most chillingly, just as the other sixteen Thucydides Trap episodes have been stoked from simmering embers to roaring conflagrations, the showdown between the U.S. and China contains a deadly spark: Taiwan. Xi Jinping regularly calls for the island state’s reunification. Often, he adds the word “peaceful” as a modifier; occasionally, he does not (Presse, 2024). Many Americans interpret the PLA’s naval buildup, reef fortifications, and area denial of the South China Sea as preparations for an invasion of Taiwan. When President Joe Biden was asked in a CBS “Sixty Minutes” interview in 2024 whether the United States would come to Taiwan’s aid if attacked, the President answered with one word: “Yes.”

Thus, the conditions for Allison’s intractable Thucydides Trap appear to be set. But are the two countries truly destined for war?

The remainder of this paper will argue that Allison’s Thucydides trap is less a lens through which to view the balance of power than a prism to shed light on multiple outcomes. Of these outcomes, war is the least likely. Yes, the U.S. is a ruling power. Yes, China has risen since the CCP established national rule with the People’s Republic of China (PRC) and, to that end, the Thucydides Trap is an appropriate model. However, the analysis misses four factors that counter Allison’s conclusion.

First, the Chinese economy is highly dependent on the very US-led international order it would seek to disrupt. Since becoming mainland China’s single political party in 1949, the CCP has always had one guiding philosophy: staying in power. In the post-Mao reform era, the Party’s claim to that power has been the rising living standards of the Chinese people brought about by economic growth. In going to war with the United States and its allies that feed its economy, the CCP would sow the seeds of its demise.

Second, Allison overestimates China’s growth prospects and underestimates American economic dynamism. In recent years, China’s growth rate has backslid from heady rates of approximately 10% per annum to 4.8% (IMF, 2024). Meanwhile, the U.S. has established leadership positions in AI, cloud computing, and low-earth-orbit space, the foundations for future innovation. China may be a rising power with an economy that will overtake the U.S. to be the largest in the world. However, Allison’s view that China is poised to become the world’s economic driving force is incomplete.

Third, China’s culture is isolationist. Some point to Xi’s Belt and Road Initiative (BRI) as a neocolonialist effort to export the Chinese model of a market-driven authoritarian state. However, further analysis demonstrates that BRI is mainly accretive to Chinese national power in the form of a protected supply chain, reinforcing its isolationist tendencies rather than imperialist expansion.

Fourth, Allison writes that China’s naval buildup portends war. In his Trap analysis, a naval buildup preceded the 1895 Russo-Japan War, the Spanish-American War, World War I, and World War II. And China is doing more than building ships. Its fortification of reefs and expanded naval fleet appear designed to take Taiwan by force. However, the dawn of the nuclear age and China’s reliance on the world order has made a Thucydidean hot war for Taiwan less likely. While Allison’s sixteen conflicts have a 75% chance of ending in war, the last conflict analyzed, the Cold War, did not. No other Thucydides Trap conflict existed under the specter of nuclear weapons.

Allison’s most convincing argument is that tit-for-tat escalations and unseen events can trigger a conflict. He points out that politicians are often forced into high-pressure escalations that lack foresight. That is plausible, but it relies on happenstance as no one can predict such anomalies.

The Thucydides Trap parallels are interesting but misleading, as explored below.

Defining “the thucydides trap”

“It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable,” according to the Greek historian Thucydides, a retired Athenian general who served as ambassador to Sparta. In chronicling the Peloponnesian War, Thucydides charted the rise of Athens and the reaction of the dominant hegemon of the age, Sparta. His story, he wrote, should be used by the generations of statesmen who would follow him so that they would avoid repeating the pattern.

As Thucydides tells us, Sparta’s reign had been indisputable for more than a century, having institutionalized a rigid, militaristic culture. When the Persian empire invaded Greece in 490 BCE, the disparate Greek states were unified in a joint defense of the peninsula. The Spartans took a brave stand at Thermopylae, sacrificing its best troops. A later Athenian naval fleet action became the decisive battle in the war.

With peace established, a power shift was underway: Athens was on the rise, challenging Spartan rule. The open Athenian society, flourishing maritime trade, and network of alliances constituted soft power. The Athenians’ naval prowess against the Persians showed their teeth. The ruling Spartans were concerned.

Viewed through the lens of Thucydides’ written history, Allison asserts the Peloponnesian War as the prime example of the Trap. Sparta first tried to negotiate a treaty with the Athenians that lasted thirty years. Perhaps inevitably, a spark came in the form of a direct conflict over maritime trade alliances. Efforts to negotiate failed; political points of view hardened; the two powers fell into a devastating war.

Like the ill-fated societies of the Peloponnese, Allison convincingly catalogs subsequent Trap conflicts. In characterizing them, he ascribes human-like attributes to nations. These stem from similar yet opposing points of view, which he terms Ruling Power Syndrome and Rising Power Syndrome.

When a ruling power is overcome with the Syndrome, the national mood is characterized by “exaggerated fears, insecurities, and the dread of changes in the status quo to provoke a reckless response.” A rising power in the opposite Syndrome’s grip rejects the norms of a status quo it did not establish, viewing such treatment as repressive and exclusionary. As Bismarck’s Foreign Minister Bernhard von Bülow put it, when Germany chafed against the established order of British rule in 1911, “Germany deserves its place in the sun.” (Allison, 2018)

Thucydides himself defines this war-fated, structural conflict between rising and ruling powers as driven by a combination of bilateral “interests, fear, and honor.” The Trap becomes intractable when political forces within the rising and ruling powers stoke these three elements, beating the drums of war, often as a matter of preemption. By Thucydidean logic, the ruling power fears a loss of national interests and a blow to prestige while the rising nation seeks to enforce its claim as a peer.

Extrapolating this concept across the millennia, Allison and his Harvard-based Thucydides Trap Project find that twelve of sixteen rising-ruling conflicts have resulted in war, for a dismal record of 75% (Table, Appendix 1). He argues that the Thucydides Trap is a suitable predictor of conflict between a rising China and a ruling U.S. where war is a likely outcome. Allison’s analysis, however, leaves out four critical aspects that make his conclusion less convincing.

The first is a simple paradox: the status quo China supposedly wants to replace is the very thing that keeps the CCP in power.

ONE: CHINA’S DEPENDENCE ON THE CURRENT INTERNATIONAL WORLD ORDER

The story of our modern world order begins near the end of World War II. With most of the global economy in ruins, 720 delegates from 44 nations convened at the sprawling Mount Washington Hotel in Bretton Woods, New Hampshire, to address economic reconstruction.

The Bretton Woods conference established many institutions of the post-war era to help fund a global economic recovery: the International Monetary Fund (IMF), the World Bank, and rules to establish a stable currency trade. It also ratified a series of baseline philosophical agreements that still reign today (Meltzer, 1991).

One might consider these philosophies as American in origin. In 1776, while the U.S. was declaring its independence—itself a revolt against an unjust economic system—Adam Smith published The Wealth of Nations. Smith linked political, economic, and individual motivations to show how countries grow rich. Along with other philosophers of the day, like Locke, Montesquieu, and Rousseau, the American founding fathers embraced Smith’s view. Thomas Jefferson once wrote to a friend, “In political economy, I believe Smith’s Wealth of Nations is the best book extant.”

If a given society was free and honest, Smith wrote, then the “invisible hand” of self-interest would drive national economic efficiencies. For example, some countries might be rich in labor or natural resources, while others might be rich in expertise. The invisible hand would create wealth by making intelligent decisions—buying low and selling high wherever possible. So long as money and goods could safely cross borders, went the thinking, all nations—and indeed free peoples—could prosper (Smith, 1999).

A few decades later, another U.K. economist, David Ricardo, took Smith’s philosophy a step further. In his 1817 book “On the Principles of Political Economy and Taxation,” Ricardo argued that nations should specialize based on their “comparative advantage.” Comparative advantage, he wrote, is an economy’s ability to produce something at a lower cost than its neighbors. In other words, national economies prosper when they specialize (Ricardo, 1977).

While there were competing voices at Bretton Woods, overall, the delegates believed in the Smith-Ricardo philosophy of specialized free trade and a free sea on which to transport goods. Since then, we’ve seen the philosophy successfully practiced. In the ensuing seventy years, nearly every global metric of societal and economic health has steadily improved. World life expectancy rose from 46 to 73. Global per capita GDP increased from $400 to $11,000 (GDP per capita, 2024).

The Chinese Communist Party (CCP) has been a chief beneficiary of this American-led international world order. In 1945, when the Bretton Woods delegates met, China was in chaos. The Japanese had been militarily defeated and ejected from the mainland. The ruling Kuomintang (KMT) under Chiang Kai-Shek resumed its attempt to suppress the revolutionary communists. Four years later, the CCP pushed the KMT off the mainland, forcing a retreat to the island of Taiwan, which the U.S. administered following the Japanese defeat. Thus, China’s civil war was stalemated with the KMT’s Republic of China (ROC) in Taiwan and the CCP’s People’s Republic of China (PRC) ruling the mainland from Beijing.

Competing ideologies took root in the two Chinas. Taiwan’s ROC followed the capitalist model, joining the new world order to become an economic powerhouse. Echoing China’s grand imperial past, the PRC, by contrast, retreated to seclusion, protecting itself against foreign invaders and global commerce for the next thirty years.

Economically, Mao Zedong’s CCP achieved initial popular success by upending the KMT’s aloof economic stewardship. Following a Marxist-Leninist model, he subverted landowner property rights, endearing himself to the peasantry. He raced the Soviets to become the first true socialist country. However, where the Soviet transition to socialism relied on an industrial proletariat, Mao saw China’s transformation as led by its vast, rural peasantry.

In racing to elevate the peasants from poverty, Mao eschewed foreign relationships, except with his prime benefactor, Joseph Stalin. As the rest of the world split between the Soviet-backed communist model and the American-led world order, China chose “socialism with Chinese characteristics.” Chief among these characteristics was a form of isolation harkening to China’s past.

Under Mao, the CCP closed its borders and evolved its economy organically on the backs of the peasants. During the Great Leap Forward, Mao famously challenged the Chinese peasantry to match British steel production in fifteen years. He did not do so by relying on the growth principles of The Wealth of Nations or Comparative Advantage. Instead, he forced his communist cadres to meet unrealistic crop and steel production goals. Fearing Mao, the cadres told him what he wanted to hear, lying about nonexistent progress, which only forced the dictator to set higher production targets. Meanwhile, the peasants were melting down the very tools that might help with farming to hit Mao’s steel production quotas. In Mao’s attempt to stimulate the Chinese economy by fiat, he brought about the largest famine in human history.

Mao’s denial of the economic disaster only made things worse. Doubling down on the ideology of Mao Zedong Thought, he initiated the Great Proletariat Cultural Revolution, which purged the country of managerial and technical expertise.

This starkly contrasts other countries in the post-war period that joined the new world order. Germany and Japan rose from the ashes to become the archetypes. Between 1945 and 1978, West Germany’s GDP sextupled, growing from $160B to $740B. By the late 1970s, Japan established a global leadership position in automobiles and consumer electronics. Postwar China was left out of the West’s flourishing trade--until Mao Zedong died.

Deng Xiaoping emerged from the succession battles that followed. As to his guiding economic philosophy, Deng neatly summed up his pragmatism with the phrase, “It doesn’t matter if the cat is black or white, so long as it catches mice.” The mouse Deng wanted to catch was to lift China out of poverty after the disastrous Mao era. The cat he chose to catch was decidedly gray, establishing a dual-track mode of state-planning and incipient free-enterprise capitalism. Deng saw China’s economic future in its slate of State Owned Enterprises (SOEs) and Town-Village Enterprises (TVEs) as he formulated his entry into a capitalist global market.

The SOEs, while large, remained slow-growth vehicles in large industries. The TVEs, however, unleashed stunning growth as they mastered Deng’s reforms: inexpensive and plentiful laborers, collaboration with lower-level Party cadres who participated in profits, and a willingness to allow foreign direct investment (FDI).

China’s TVEs succeeded with the core principles of Smith’s Wealth of Nations and Ricardo’s Comparative advantage. Estimates vary on the number of TVEs in China, but by the 1990s, there were tens of millions of TVEs, employing approximately 146 million people and accounting for 40% of China’s total exports (Perotti, 1998). Through them, the CCP achieved the fastest economic growth in history, lifting hundreds of millions out of poverty and becoming a global economic force.

Allison makes much of the fact that China’s economy is larger than the U.S. economy based on PPP. He suggests that this translates into a rising power that will soon assume world leadership. He further emphasizes China’s patience, as though it merely lies in wait to supplant the existing world order.

An alternate interpretation is that the CCP has abandoned its Marxist-Leninist roots to become the world’s workshop, which has evolved into the Party’s claim to power. Allison notes this, quoting the Shanghai-based venture capitalist Eric Li: “We all know the facts. In 1949, when the Party took power, China was mired in civil war, dismembered by foreign aggression, and the average life expectancy at the time was forty-one years old. Today, it is the largest economy in the world, an economic powerhouse, and its people live in increasing prosperity.” (Allison, 2018)

While Eric Li papers over the tens of millions of famine deaths, the comparison between 1949 and today is indisputable. Yet it also illustrates the paradox: the CCP’s turn toward global capitalism underpins its legitimacy. That economic performance was achieved in the existing world order set up by the United States.

In Allison’s Thucydides Trap, the rising power should feel shortchanged by the existing system. China is not. Moreover, in his evaluation of the prospects for the Chinese and American economies, Allison’s assessment overestimates the former and underestimates the latter, which is the subject of the next section.

TWO: China’s economy may be the largest — but it’s not the world’s leader

Allison cites Chinese investments in STEM education as a force for a technological surge surpassing U.S. technology leadership. He highlights the relative status of the U.S. and China’s technological competence through supercomputers: “Indeed, in the rankings of the world’s top 500 supercomputers—a list from which China was absent in 2001—today (China) has 167, two more than the United States.” He also notes that China’s supercomputers are built with domestic processing chips. That this is a technological achievement is inarguable.

But it is also irrelevant. The computing race has shifted rapidly from supercomputers to distributed cloud computing, in which the United States has built a commanding lead. No supercomputer can match the combined computational power of Amazon Web Services, Microsoft Azure, or Google Cloud. A Chinese competitor, Alibaba, entered the cloud computing market in 2015. Yet, after offending the Xi regime, Jack Ma, Alibaba’s founder, faded into obscurity (McMorrow and Yu, 2021). Most of the world’s companies rely on Amazon, Microsoft, or Google to run their businesses; Alibaba has only a 7% market share.

The cloud lead is extended into the next great technology frontier, Artificial Intelligence (AI). The efficiency afforded by cloud computing provides the raw horsepower to develop predictive models that form the basis for machine learning. The first of these AI engines imitates human speech with “large language models” such as ChatGPT and a host of emerging competitors. Future AI applications will work similarly but more extensively to solve complex logical problems as humans might think about them. In each case, trillions of data points are fed into a predictive algorithm that can imitate human speech (today) and decision-making (future).

AI is rapidly seeping into connected consumer products, producing the next great wave of technological innovation. Paul Scharre, author of the influential AI book The Four Battlegrounds breaks the technology into four components: data, hardware, talent, and institutions. He notes that the United States has a leadership position on data because its companies operate globally. For example, Facebook and YouTube have 2 billion global users (each) who feed data points into AI engines. Because China’s great firewall limits its internet reach, it has a structural disadvantage in compiling the raw AI data necessary to feed an algorithm. The U.S. furthers this lead by making its AI applications broadly available with its advantage in cloud computing, which is readily available to thousands of smaller companies to spur even greater innovation.

China also lags the United States in Scharre’s hardware component. Like distributed blockchain computing that produces cryptocurrencies, AI relies heavily on the graphics chips designed by an American semiconductor firm, Nvidia, which has become the world’s most valuable enterprise. China is doubtless racing to catch up and improve its AI prowess. But when Allison asserts that China will overtake a flatfooted U.S. in computing, he is mistaken.

Another example of American advance relative to China is the low-earth-orbit satellite market. Allison points out that China’s command-and-control government can move quickly on large-scale infrastructure projects. In contrast, messy American democratic processes leave these projects mired in dispute. An example of this dichotomy is the National Aeronautics and Space Agency, NASA. Fifty years ago, NASA was putting men on the moon. Today, it is a shell of its former self, while China races ahead with a national space exploration program. Is this an example of American decline and Chinese rise?

It is not. Just as China saw the value of private capitalism in TVEs, so has the U.S. government enjoyed success from private enterprise regarding space. While NASA as a state-controlled bureaucracy has receded as the space industry catalyst, an American company, SpaceX, has rushed into the void.

In September 2024, SpaceX will have 6,4oo satellites in orbit with plans to go as high as 42,000 to enhance its StarLink global broadband network. Moreover, StarLink has two private American competitors nipping at its heels: Amazon’s Kuiper and Viasat. In 2024, SpaceX alone will conduct 136 launches. China launched 67 in 2023, a record for the country. The new American space race between China and the U.S. is just beginning—and the U.S. is winning.

Still, as it relates to the sheer economic output of technology, it is possible to point to many areas where China at least matches the United States. The U.S. is the leader in high-tech manufacturing, accounting for 31%. But it has lost share to number two China, which accounts for 24%. Yet much of China’s 24% is based on products designed and paid for by the United States. (Report - S&E Indicators 2018 | NSF - National Science Foundation, 2018)

Take the iPhone, the most successful single technology product ever produced. It was designed by Apple, an American company whose engineers integrated radio chips from Qualcomm, app processor chips from Samsung (and later Apple themselves), and electronic components from South Korea, Taiwan, and China. iPhones are predominantly assembled by a Taiwanese company, Foxconn, with a facility in China.

Because of this physical manufacturing relationship, China can appear to be a high-tech manufacturer as it ships iPhones all over the planet on behalf of Apple. But does that equate to Chinese technology leadership? On the contrary, it shows that the law of Comparative Advantage is alive and well. Apple is demonstrating technology leadership by outsourcing the lower-value assembly activity to China.

There are, of course, areas of high-tech manufacturing specialization where China has shown authentic leadership. One critical technology area China leads is the electrical systems that power green energy alternatives such as windmills and solar panels. Another is electric vehicles (EVs). China’s BYD brand recently passed the American firm Tesla as the largest manufacturer of EVs in unit sales. But here again, America can demonstrate a structural advantage. Because the U.S. leads in cloud computing and AI algorithms, it uses advanced technologies to power autonomous vehicles ahead of the Chinese. There will be countless other connected products that will benefit from this lead in AI.

In short, to say that China has overtaken the United States as the world’s innovator—as Allison has suggested would happen—is simply incorrect. China has shown marked advances in R&D spending and overall technological prowess. Yet it still relies on the global trading system brought about by the existing world order to stay relevant. When it does not participate in that market—as with the great firewall—it hinders its innovation. And notably, the reverse proposition does not apply to the United States. American technology leadership is not dependent on China.

To illustrate that dissonance, consider the American tech company Amazon. Amazon was founded in 1994 by Jeff Bezos on the premise that the internet would enable it to sell goods directly to consumers, disrupting the classic brick-and-mortar retail model. Amazon was (and is) a leader in e-commerce, pioneering the distribution of physical and digital goods. Though based in Seattle, the company’s business seamlessly crosses international borders. It serves 21 countries for retail and 190 countries for its Prime streaming video business.

Amazon needs to serve customers globally because its retail business model is predicated on a phenomenon called “the flywheel.” In the flywheel concept, Amazon’s growing consumer customer base gives it scaled pricing benefits to procure lower-cost goods from suppliers. These savings are then passed on to even more consumers, who amass more volume, gaining more supplier discounts, and so on.

For a company with that kind of scale, one would assume that Amazon should require access to China since it is the world’s largest consumer market. In fact, Amazon intended to build a retail network in China just as it did in other countries and began assembling the pieces in 2004. However, after evaluating the overhead costs and reputational risks of CCP interference, Amazon reduced its China presence to digital goods (e-books). The company fully pulled the plug on China business operations in 2019. Rather than invest in the PRC, it doubled down on one of its keenest Asian rivals, India, where the company has committed to spending $26 billion by 2030.

Amazon’s deliberate avoidance of China has not impeded its success. From 2019 to 2024, Amazon’s revenue rose from $230B in 2018 to over $600B in 2024. If Amazon were its own country with its annual revenue expressed as GDP, it would rank twenty-second. As it expanded, it used its massive global retail business to fund cloud computing and AI businesses. Amazon has shown that it does not need China—but the reverse is not true. China needs Amazon.

That’s because it is estimated that 70% of Amazon’s products for sale originate in China (China Supply Chain for Amazon Sellers, 2023). It is impossible to say how many Chinese TVEs rely on Amazon’s global distribution network for sales, but one could assess it as a large number. All of those TVE employees are enjoying a rising standard of living, for which the CCP takes credit. One could argue the reverse—that Amazon would need China to fuel its retail business. However, if China were to exit Amazon, Amazon could source products from millions of alternate vendors in other countries, while China would lose access to an irreplaceable global marketplace.

Once again, this demonstrates that while China’s economy might be growing, it is as a beneficiary of the existing world economic system. On a rational basis, it should have little interest in disrupting that world order. And while China might still be rising, the United States is hardly a has-been power relegated to the sidelines. China will continue to grow technologically—but so will the United States.

Returning to the matter at hand: is China in the grips of the Thucydidean rising power syndrome, straining at the bit to reestablish a new world order? On the contrary, the CCP has cemented its grip on power by overseeing China’s blistering economic growth over the past forty years under the American-led system.

However, as Allison and Thucydides explain, honor can hinder rational policy. Perhaps Thucydidean hubris would cause the CCP to want to replace the U.S. as the global hegemon. Yet here again, evidence suggests otherwise, as explored below.

Three: China’s isolationist tradition defies Thucydidean Logic

As Allison highlights, China’s civilization is one of the world’s oldest. Where the United States is 250 years old, China has been around for 5,000 years, considering itself the Middle Kingdom between heaven and earth. Until the twentieth century, Chinese civilization was intertwined with Confucianism, which espouses a philosophy of a strong central government, respect for elders, and, above all, order—with China at the top. From this lofty perch, China’s long chain of emperors believed all foreigners must come before the throne and perform a kowtow, pressing nose to floor.

Allison cites China scholar Samuel Huntington’s Foreign Affairs essay “The Clash of Civilizations” to demonstrate that China’s self-perceptions are the core of its foreign policy. From this perspective, China still views itself as the preeminent world power. The current American-led world order is a temporary anomaly.

In Allison’s view, the CCP is merely biding time, waiting for lesser nations to accede. This informs the CCP’s general policies of strategic patience and playing the long game. Allison compares this to America’s “short-termism,” the cultural bias toward fixing problems with blithe indifference to foreign perspectives.

China certainly has reasons to distrust foreign intervention, especially global trade. In 1842, a trade imbalance between Great Britain and China sparked the First Opium War, which would have far-reaching consequences in China’s view of the West. To understand Chinese foreign policy psychology, it is worth reexamining the episode.

In the nineteenth century, China exported silk and tea to Great Britain, while the British sold little to China. To open the market, the British harvested opium from their Southeast Asian colonies (Malaya, Burma, India) and smuggled it into China. The Qing emperor worried about opium-fueled cultural rot and outlawed the drug, which triggered the war with the British Empire.

Superior British technology quickly defeated the Qings. The war ended with the lopsided Treaty of Nanking in 1842, which forced China to open five ports, cede Hong Kong, and pay $21M ($3B in today’s dollars) while receiving nothing in return.

The treaty’s repercussions were devastating. Western colonial powers rushed in to establish foreign trading bases and propagate Christian missionaries. The culture clash led to the Taiping Rebellion, the bloodiest uprising in history.

Chinese humiliation at the hands of foreign powers only got worse under Japan’s imperial ambitions. The First Sino-Japanese War, 1894-1895, pitted the ruling Chinese Qing against a strengthening Japanese empire for control of Korea, which had been a “tributary” state to China. China was forced to capitulate to Japan in the 1895 Treaty of Shimonoseki, which ceded control of Taiwan to Japan. Japan would return to invade Manchuria in 1931, a precursor to the Second World War. With this past as a prologue, it is easy to understand why the Chinese would be suspicious of foreign intervention.

Mao extended these isolationist attitudes to foreign relations, courting the Soviet Union as his only serious ally. Even that relationship frayed after Stalin’s death when Khrushchev privately denounced the former dictator and advocated a policy of entente with the United States. Mao disagreed. A few years later, he sent troops to fight the Americans as MacArthur advanced on the Yalu River in the Korean War in 1951. It took Mao’s death and Deng Xiaoping’s pragmatism to establish formal relations with the United States in 1979. From that point forward, China engaged in international commerce to birth its economic miracle.

Today, as Allison notes, the Chinese cite foreign interference as a driving force of nationalism. With China’s longstanding fears of invasion, “Never again!” is a familiar chant among rally participants. Yet throughout its troubled history of foreign humiliation, China has only deployed its army on foreign soil twice, in Korea and Vietnam. It has fought border skirmishes with India and the Soviet Union, repressed Tibet, and treated Mongolia as a vassal state. It disputes the ownership of islands in the South China Sea with Japan, the Philippines, and Vietnam. But these are all adjacent territories. China does not have a significant history of foreign military expeditions.

That stands in marked contrast to the rising powers in Allison’s Thucydides Trap. The Trap’s seven conflicts in the twentieth century involved a rising power with ambitions to expand the borders of an empire.

For example, in the early part of the century, the United States fomented revolution in Colombia to snatch the Isthmus of Panama as a shipping lane, challenging the ruling United Kingdom’s sea power and enforcing the Monroe Doctrine. Around that same time, Germany built a fleet to challenge the overseas British Empire, which it believed the Royal Navy could no longer defend. This laid the groundwork for World War I, when Germany sought to establish its reach through force.

A little more than a decade later, the Japanese empire was on the march, subjugating Manchuria. The Cold War was perceived, rightly or wrongly, as a battle of containment, in which the United States sought to stop the spread of communism around the globe. The Soviets attempted to export their ideology, trade agreements, and basing rights worldwide. All of these are examples of imperial expansion.

China’s historical orientation and actions in international affairs tend toward isolationism rather than foreign expansion or intervention. Thus, China defies the examples in the Thucydides Trap that are cited as proof of inevitable conflict.

One might consider Xi’s Belt and Road Initiative (BRI) a CCP bid to build an international framework to challenge the United States. From a pessimistic point of view, Xi could practice so-called “debt trap diplomacy,” undertaking massive infrastructure projects in developing countries to buy influence.

A decade after its commission, Chinese BRI spending has topped $1 trillion. Most investments are in developing countries in Southeast Asia, Africa, and Latin America, with industrial projects in transportation, energy, and mining (Nedopil, 2024). However, the nature of these investments looks more like a project to secure a Chinese supply chain of raw materials and gain allies in international forums such as the UN.

Pakistan, for example, suffered from 17% inflation and 0% GDP in 2023. China entered Pakistan with the promise to build up Pakistan’s Red Sea port facility at Gwadar and develop a high-speed rail network that would enter China at the distant Khunjerab Pass. In doing this, China would create an overland trade route free of interference from the U.S. Navy. Yet, while China gains, Pakistan owes the PRC $23B to pay for it (How Chinese loans trapped Pakistan’s economy – DW – 08/02/2024). Of note, in October 2024, Pakistan went on the record at the United Nations with a lengthy statement about China’s right to rule Taiwan. Was that because it felt obliged by the BRI debt?

Four: The prospects for war over Taiwan in the nuclear age

China now has the world’s largest navy, servicing a combat fleet of 234 warships to the U.S. Navy’s 219. The Chinese fleet is also younger, with 70% of ships launched since 2010 compared to 25% for the United States. A U.S. Navy briefing suggested that China maintains roughly 230 times the industrial shipbuilding capacity of the United States. In a hot naval war between the United States and China over Taiwan, war gamers estimate that China would win (Palmer, Carroll and Velazquez, 2024).

But what would a conflict between two nuclear powers look like? Allison’s Thucydides Trap provides only one example: the Cold War between the Soviet Union and the U.S., which did not result in a hot war.

Two other recent instances have emerged in 2024 that may provide insight. First, nuclear-armed Israel has conducted a limited missile war against near-nuclear Iran. Second, nuclear-armed Russia has fought Ukraine, a non-nuclear country supported by nuclear powers U.K., France, and the U.S.

In the case of Israel-Iran, the nuclear option has not been seriously raised by either side. Israel’s campaign against its Iranian-backed enemies to the north (Hezbollah) and south (Hamas) triggered a direct armed reaction from Iran, which launched a conventional missile attack on Israel in April 2024. Israel responded in kind. Iran followed with an attack on Israel with 181 conventional missiles. The last of these tit-for-tat exchanges was Israel’s sweeping air assault on Iranian defenses in October 2024, with more than 100 planes targeting military installations. So far, these escalations appear deliberately designed to avoid a full-scale war.

As for Russia-Ukraine, Putin has openly raised the prospect of using nuclear weapons. On November 21, 2024, he expanded his threats by announcing that Russia would “lower the threshold” for a nuclear response to include countries that supply Ukraine. In other words, Putin is actively threatening to use nuclear weapons against NATO, including the United States.

Yet, for all Putin’s saber rattling, he has not ordered conventional attacks on any NATO countries. Nor has Ukraine’s network of weapons suppliers joined in active fighting against Russia. Rather, they set strict rules about which weapons systems can be used in Ukraine with restraints on cross-border attacks into Russia. These rules are dynamic, but after 1,000 days of the Russia-Ukraine conventional war, all sides appear to step back from the edge of an escalation that could trigger World War III.

How might these scenarios compare to Xi Jinping’s goal to reunify Taiwan, reiterated at a recent Party conference celebrating the CCP’s seventy-fifth year in power?

Compared to Russia’s bellicosity and Iran’s viciousness, the CCP’s desire to bring Taiwan under its sway is more rational. Taiwan was a part of greater China (though not the PRC) until the Treaty of Shimonoseki. When the United States administered it after the Japanese defeat in World War II, General MacArthur’s Order Number One awarded the island to the KMT. In that respect, China’s claim to Taiwan is effectively a bid to end a stalemated civil war.

Though murky, most nations acknowledge some of the PRC’s claims for dominion over Taiwan. The United States shifted its diplomatic recognition from the ROC to the PRC in 1979 and today supports a “One China” policy. Only a few small island nations in the Caribbean and Pacific recognize Taiwan as an independent, sovereign country.

Moreover, China and Taiwan show signs of integration. China is Taiwan’s largest trading partner, accounting for 22.6% of total trade. The U.S. is China’s second-largest trading partner, with 13.3% of trade (US Commerce Dept, 2024).

When viewed through the Thucydides Trap lens of great power competition, China’s desire to reunify Taiwan does not appear to be a measure of imperial expansion as much as an initiative to prevent Taiwanese independence, a status that even the U.S. does not recognize. In that respect, China, the rising power, does chafe against ruling power America’s apparent desire to maintain the status quo of one China, two systems. But does that portend a hot war with the U.S.?

Again, the Russia-Ukraine war is instructive. The moment Russia initiated a hot war, global condemnation was swift. Economic sanctions were immediately enacted, and Russia was cut from the worldwide banking system. Russia’s economy and autocratic leadership have managed to hang on—but if such a reaction were taken against China, the results would be far different.

American industry would hasten its decoupling from China, which is already partially underway. FDI, a critical component of the Chinese economy, would collapse. American firms, including goliaths like Amazon, would be pressured to stop doing business with China. If that happened, the Chinese TVEs making products to sell to Amazon would lose their customer bases. Hence, the positive gains in Chinese rural poverty would be reversed. The economic miracle of which the CCP is so justifiably proud would recede, and the Party’s grip on power would weaken.

Furthermore, only the Ukrainians are fighting in the Russia-Ukraine War. In the Thucydidean scenarios envisaged for a Chinese invasion of Taiwan, the United States actively fights to defend the island. But is that a hasty conclusion?

“The U.S. is standing up for peace and stability in the Taiwan Strait,” President Joe Biden said in a speech in 2024. He added pointedly, “I’ve always been willing to use force when required to protect our nation, our allies, our core interests.” However, his successor, Donald Trump, campaigned on a promise to “stop endless wars” and challenge the military-industrial complex (wgi.world, 2024). Trump’s opponent in the 2024 election, Vice President Kamala Harris, said that she would back the One China policy and “support Taiwan’s ability to defend itself (Harris backs ‘Taiwan’s ability to defend itself’ | Taiwan News | Oct. 8, 2024 13:33, 2024).” These wavering statements hardly meet the Thucydidean standard for a rising country to go to war because it feels threatened, pushing politics in an aggressive direction. The problem with comparing Trap wars to China’s revanchism is that the CCP’s target is not (officially) a sovereign country, and U.S. defense planners are not contemplating an imperial PLA march on Tokyo or Seoul.

The U.S. would not be fighting an ideological spread, either, as it did in Vietnam (against Soviet communism) or Afghanistan (Islamic fundamentalism). China’s chilling totalitarianism and disrespect for human rights are certainly anathema to the American concept of freedom, but that does not necessarily mean the U.S. would rally to fight it in the case of a Chinese invasion of Taiwan. The Party has exerted stifling influence over free speech in Hong Kong, another “one China” territory. But no American politicians have suggested American troops should liberate the former British colony.

As Thucydides wrote and Allison expanded, nations can and do fight out of a sense of honor or to save face. For example, the U.S. might fight to maintain the free sea principle as established at Bretton Woods, pushing back against a closure of the Taiwan Strait. However, there are limits to how far American leadership will go. For example, the Navy has not sailed into the Black Sea since the Russia-Ukraine war broke out. Nominally, this is because Turkey closed the Bosporus to foreign warships—but even that is an example of American pragmatism.

Finally, Thucydides wrote that countries will fight for “interests.” The CCP has been clear about its interest in reunification. But what of America’s interests in Taiwan? If it is unlikely to defend the ROC to counter nuclear, ideological, territorial, or prestige threats, are there interests for which America would fight?

In Allison’s Thucydides Trap conflicts, nations fought to expand their empires to protect scarce resources vital to their economies. Or, related, they fought to defend those resources. For example, an oil embargo precipitated Japan’s sneak attack on the U.S. Navy. Teddy Roosevelt challenged the status quo by seizing the Panama Canal to enhance west coast shipping. More recently, America’s armed escort of oil tankers in the Earnest Will operation in the Persian Gulf in the 1980s ensured a steady oil flow.

In the case of Taiwan, the scarce resource for which America might fight is manmade rather than natural. As explored above, America leads the world to a significant degree because of its technological advantages—and that leadership relies on semiconductor chips.

Smith’s Invisible Hand and Ricardo’s Comparative Advantage are in full effect for global chip production. While America’s famed Silicon Valley is considered the world leader in semiconductor innovation, Taiwan manufactures 60% of all semiconductors and 90% of the most advanced ones (Jones, 2023). Nvidia, the world’s most valuable company, designs the chips that power American AI leadership. However, the Taiwan Semiconductor Manufacturing Company (TSMC) makes those chips in fabrication plants (fabs), considered the most advanced factories ever built (Miller, 2022).

Yet again, both China and the U.S. are aware of this contention. In 2022, the U.S. passed the “Chips Act,” authorizing subsidies to TSMC to build a fab in Arizona. Intel is also investing $20 billion in a fab in Arizona to make chips based on other companies’ designs to compete with TSMC. The TSMC plant is forecast to begin production in 2025 (TSMC Press Release, 2024). With this diversification, American dependence on Taiwan for its technological leadership will recede.

Summary: Are America and China Destined for War?

Graham’s Thucydides Trap reflects the realism foreign policy school and accurately demonstrates parallels between the U.S. and China.

However, Graham’s analysis assumes that the CCP wishes to overturn the status quo, when, in fact, its power depends on it. He overstates China’s economic capabilities and underplays American technological leadership. He subverts China’s view of its past by inferring the CCP wishes to be the world’s dominant power when the evidence, such as BRI, indicates investments in nations that can provide either natural resources or frictionless supply chain routes that will preserve China’s isolationist independence.

While there are ample reasons to fear war over Taiwan, there are more reasons to suggest that the constructionist view prevails. A hot war would threaten the CCP’s grip on power, and the likelihood of armed American defense is decreasing both politically and strategically as it consciously de-risks its chip supply.

That is not to say that China will not take Taiwan. All indications are that it will; but a direct armed conflict between the U.S. military and the PLA is unlikely. Neither side will want to trigger a nuclear conflict, and a reading of U.S. actions suggests that America will adjust to a CCP flag over Taiwan. If that happens, China might gain Taiwan but lose more than the U.S. in the long run.

In sum, it is fair to conclude that China is a rising power and that the U.S. is a ruling power. By that strict definition, the U.S. and China are the world’s seventeenth trap. However, as demonstrated above, a hot war is an unlikely outcome.

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MP Woodward