Twenty years ago, Americans asked about China the way one asks about a fast-rising newcomer: How big a market will it become, and how much can the United States profit from it? The 1989 Tiananmen Square crackdown had left a moral stain, but the bet on engagement, permanent trade status in 2000, and Word Trade Organization entry in 2001, assumed that commerce would accomplish what protest could not. “Made in China” filled American shelves, and few asked what it was doing to American factory towns.
From opportunity to fragility
Today’s questions are different. Will there be a war over Taiwan? What are tariffs doing to American jobs and prices? Who is winning in artificial intelligence and chips? Will the Chinese model outperform the American one? Are we witnessing an America in decline and a China on the rise? The reality is more nuanced. The U.S. still leads, but its margin is narrowing, while China, having risen dramatically, appears to have passed its peak.
That makes the rivalry less a contest of strengths than a stress test of limits, something both nations have been slow to admit. The side with the bigger liabilities and vulnerabilities will lose the race. Strengths are a poor guide because both countries have plenty. America has deep capital markets, leading AI labs, allies, and the dollar. China has unmatched manufacturing scale, a huge engineering workforce, and a state able to direct resources for decades. But limits reveal how far a system can go, and where a hard ceiling holds it back.
Two ledgers of liabilities
Start with China. Its population has been shrinking since 2022, so its workforce is aging faster than the country is getting rich. The property sector, where households parked much of their savings, remains in a long slump. Weak domestic demand leaves the economy leaning on exports, the very channel tariffs squeeze. Its energy imports travel sea-lanes it does not control, and its most advanced chips depend on tools it cannot fully replicate. And a system that concentrates power in one leader is efficient when decisions are right and unforgiving when they are wrong.
America’s liabilities are just as real and less comfortable to discuss. Federal deficits and interest costs narrow the fiscal room for a long confrontation. The trade that looked like a bargain in the Walmart era left the country dependent on Chinese manufacturing and critical minerals, with rare-earth processing the clearest choke point. Shipbuilding and defense-industrial capacity have atrophied. Politically, tariffs, subsidies, and even alliances can swing with each election, and a patient rival can wait out the whiplash. Add the fentanyl crisis and eroding trust in institutions, and national confidence has worn thin.
If this is a stress test, the winning move is not chest-thumping. It is shrinking your own exposure faster than your rival shrinks theirs. Washington should diversify mineral supplies, rebuild industrial capacity, steady the budget, keep alliances predictable, and sustain the deterrence that makes a Taiwan gamble unattractive. Beijing should shift toward consumption, resolve its property debt, and tolerate more candor about its weaknesses. Each side’s best reforms are ones it should pursue regardless of the other.
Why the long view matters
Interdependence complicates the contest. Each economy holds a piece of the other’s vulnerability, so a shock in one propagates to the other, and brinkmanship is more dangerous than either side’s rhetoric admits. Perhaps that is why American attitudes have softened slightly: Pew’s March 2026 survey found that 27% of Americans view China favorably, up 6 points in a year and nearly double the 2023 figure. That is still a small minority, but some Americans seem to see a relationship to be managed rather than an enemy to be defeated.
Skeptics deserve a hearing. Some argue that authoritarian systems can absorb pain and mobilize resources in ways democracies cannot. Others say America’s open economy, talent magnet, and capacity for self-correction are underrated. Outsiders have also predicted China’s collapse many times and been wrong. And stress-test logic can end with two losers rather than one winner.
That is why history matters. Today’s tariffs and chip controls may look like a sudden rupture, but the rivalry is the product of decades of choices, miscalculations, and turning points on both sides. In my forthcoming book, The American Way versus the Chinese Dao: Thirty Defining Moments in U.S.–China Dynamics Since 1950, I trace that record through 30 pivotal episodes.
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Seen moment by moment, the rivalry reveals itself as a clash not only of interests but of two ways of mobilizing power and governing society, with a long historical track, complex realities in which cooperation and confrontation coexist, and an uncertain path ahead. Readers weighing whose liabilities are heavier will find the long view a better guide than the headlines.
Two decades ago the debate was about opportunity and principle. Now it is about resilience and risk. The country that answers the new question more honestly, by naming its weaknesses before its rival exploits them, will be the one still standing when the test ends.
David W. Wang (@DavidWWang203) is a senior international business executive, geopolitical affairs consultant, analyst, and writer based in the Washington, D.C., metro area.
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[ H/T Washington Examiner ]
