At the invitation of U.S. President Donald Trump, Chinese President Xi Jinping is on a state visit to the United States from September 23 to 25, marking an exchange of visits between the two leaders within six months. In the past decades mixing tensions and intensifying competition have been accompanying with peaceful coexistence between the two countries. To China’s dramatic economic growth, the United States responded with defensive anxiety and mistrust. The two countries have seemed locked permanently into a zero-sum game. Moreover, regional conflicts have sometimes risked spilling over into a scenario of full engagement by all major powers, including the United States and China. 

The historical context is key to understanding the U.S.-China relationship. A key part of the story begins with the 20th century’s two savage world wars. In many ways, they were the culmination of centuries of European colonialism, eventually joined by Japanese and American colonialisms. The two world wars resulted in the mutual destruction of the colonial powers with the one exception being the United States. It suffered relatively much less because it was protected then by the expanses of the Atlantic and Pacific oceans.  

What emerged after 1945 was a Cold War pitting the United States against the Soviet Union and, after 1949, against the People’s Republic of China too. The latter two regions plus their allies became territories largely excluded from the world economy. Their post 1950 economic development depended on their own resources, institutions, and growth commitments. Arrayed against them was a United States that had inherited nearly all of the prior centuries’ colonies. Because the latter’s colonial masters had destroyed one another in the two world wars, they could not retain their colonies. One after the other, former colonies achieved political independence. 

However, the U.S. corporate sector rushed in to replace private capital in these now independent former colonies. The U.S. Government entered alongside U.S. corporations to protect them from local oppositions. The U.S. Government also secured needed supports from the nominally independent local governments. The entire enterprise was justified by equating political subordination to the U.S. with the establishment of democracy and democracy with systemic support for “private foreign investments” then coming overwhelmingly from the U.S. 

It was the world’s dominant economic and political power after 1945. It could facilitate post-war reconstruction in Europe and Japan by means of its manufactured exports and the capital (such as the Marshall Plan) needed to fund those exports. The U.S. could and would protect the former colonializing countries by means of an unmatched global ring of hundreds of military base. 

What changed everything in this picture of post-1945 geopolitical realities was the explosive economic growth achieved in and by the People’s Republic of China since the 1980s. Consistently high annual GDP growth rates enabled China’s entry into the highest ranks of manufacturing exporters and industries using the most developed technologies. Western containment barely slowed China’s ascent; it certainly never stopped it. For a short while, U.S. foreign policy changed its tone and supported “productive engagement” in the hope that somehow doing so would encourage system change. When that failed to happen, U.S. foreign policy reverted to resume a containment phase. 

Across all phases, Chinese economic growth has persisted at a rate 2 to 3 times faster than that of the United States. Over the last 30 years, China emerged as the super power facing the United States. Both Japan and western Europe slipped steadily and ever further out of contention in a competition increasingly between the U.S. and China. That competition peaked in the years of Trump and Joe Biden, expressed especially in both trade and tariff wars initiated by the U.S. and resisted by the Chinese. U.S. foreign policy considered China aggressive and its economic emergence as a superpower deeply threatening. Relative to its post-1945 position atop the Western world economically, politically and militarily, China’s economic growth certainly contributed to its decline. Yet China’s growth was neither the only or even the major influence operating on the decline of the U.S. empire.  

The U.S. inheritance of nearly all the pre-1914 colonial territories as its one global colony was inherently a temporary situation. Observers should have presumed that some among the former empires would reconstruct their economies, grow and thus contest U.S. dominance. History certainly suggested that past empires had often declined because of political or military overreach. After all, the U.S. had lost the wars in Vietnam, Afghanistan, Iraq, and likely would now again in Iran. 

Today, the U.S. and China represent two global super-powers increasingly at odds.  The world’s configuration of powers great, small, and in-between relentlessly changes. That brings understandable stress and anxiety about a risky present and an uncertain future. This situation presents us all with two basic options.  

We can let the confrontation continue around multiple points of difference and friction. We can hope that none of those points explode and that other global issues do not draw the United States and/or China into conflict. Or we can demand as loudly and urgently as possible that both countries and their leaders make a basic agreement to respect and enable each other’s economic development on the single planet they cohabit. The necessary mutual accommodations are far, far less dangerous than foregoing agreement. And they open the space for collaborations that give the human race its best possible chance to achieve the technical breakthroughs required to make cohabiting this planet a manageable and perhaps even beautiful joint product. 

The author is an American economist, professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor at The New School, New York. He is the author of numerous books, including Understanding Socialism (2019) and Understanding Capitalism (2024)  

Copyedited by G.P. Wilson  

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