America and China don't need to knock each other out to win

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Competition and conflict between the U.S. and China have continued to intensify. On Aug. 2, the House speaker, Nancy Pelosi, visited Taiwan to showcase congressional support for the self-governing island, defying Chinese protests that her visit was inconsistent with the "one China" policy of the United States. China responded by ringing the island with live-fire military exercises, missile tests and other operations in the Taiwan Strait.

On Oct. 7, the Biden administration ordered sweeping export controls to prevent China from acquiring the most advanced semiconductors and the equipment required to manufacture them, and forbidding any American or foreign company to sell to China any such equipment that uses American technology.

These developments have perhaps not surprisingly taken place against the backdrop of growing cooperation between China and Russia over their shared belief that neither can be secure in a U.S.-led international order. China's rhetorical and diplomatic support for the Russian invasion of Ukraine has solidified the sense that the U.S. must outcompete its autocratic rivals to shape the future of the international order.

U.S.-China competition risks becoming an end unto itself, pressing leaders in Beijing and Washington to embrace maximalist positions meant to thwart each other and crowding out efforts to tackle global challenges like climate change and pandemics.

In a nearly two-hour address to the Chinese Communist Party's continuing 20th congress on Sunday, Xi Jinping — who is expected to win a third term as China's top leader — stated confidently and to lengthy applause that "the wheels of history are rolling on toward China's reunification and the rejuvenation of the Chinese nation." Xi has often proclaimed that time is on China's side, and that Beijing can afford to be patient.

Under Xi's leadership, the Communist Party has used more aggressive tactics to defend its legitimacy and interests, seeking regional pre-eminence and acceptance as a strong and respected peer by the United States.

But the Chinese leader is unlikely to seek military conflict, either to divert attention from domestic challenges or to act before China's power peaks. The political scientists Taylor Fravel and Andrew Chubb have shown that Chinese foreign policy tends to be more cautious when its leaders are preoccupied with domestic challenges. Xi's speech underlined the many "deep-seated problems" and "formidable tasks" that China faces, from unemployment to inequality to acute environmental challenges.

China's long-term ambitions and capabilities are a work in progress, especially as its economic growth slows. The Communist Party recognizes that China is still weaker than the U.S., and its modernization drive remains dependent on international technology and capital. Despite efforts to become more self-sufficient, Xi acknowledged that "China's capacity for scientific and technological innovation is not yet strong enough."

Beneath Xi's efforts to project confidence lie undercurrents of domestic dissatisfaction with how doggedly he has stuck with "zero-COVID" policies, mismanaged the economy and alienated the West. Yet so long as Xi can point to perceived U.S.-led efforts to contain China's development, his appeals to Chinese nationalism will continue to win these domestic debates and sideline dissent as unpatriotic. Many Chinese who are unhappy with how Xi has ruled still share his view that U.S. pressure and sanctions are intended to undermine China's development and preserve U.S. primacy.

Given the deep distrust on both sides, coordinated, unilateral steps back from the brink — voluntary bounds on behavior rather than limits on new capabilities — could give both the U.S. and China breathing room to get through acute domestic challenges and navigate a particularly perilous period.

The U.S. once judged that the world would be safer with China inside rather than outside the international system. That bet largely paid off and is still better than the alternative. Leaders in the U.S. and China should utilize bilateral and multilateral forums, like the Group of 20, to discuss steps each side could take to move away from the brink.

A good place to start would be military operations around Taiwan, including the reduction of Chinese maneuvers across the "median line," an unofficial buffer line, of the Taiwan Strait. Beijing's actions have undermined the credibility of its assurances that it prefers to resolve differences across the Taiwan Strait peacefully. In his speech on Sunday, Xi broke little new ground on Taiwan, affirming that China would "continue to strive for peaceful reunification" and warning against "interference by outside forces."

Concrete evidence of Xi's claimed "patience" and willingness to engage constructively would reduce the urgency of growing calls in the U.S. for a new policy framework that would assert a clearer American commitment to defending Taiwan.

Though well-intentioned, calls for change in U.S. policy are more likely to increase the risk of a Chinese attack on Taiwan that they aim to deter. The U.S. should be prepared to demonstrate its own willingness to limit steps that do more to symbolize U.S. support than to strengthen Taiwan's welfare and capacity to resist coercion. This would include public statements and official visits that would treat Taiwan as a separate country or appear to restore an alliance-like relationship with the island. And the Biden administration should continue to help Taiwan toughen its defenses and press forward with trade and investment agreements that will strengthen economic ties.

The U.S. and its allies can still shape plausible terms of coexistence with Beijing by making punishments and rewards conditional on Chinese behavior. This requires making clear that if China's leaders refrain from the proscribed behavior, they can expect to be rewarded rather than exploited.

It is critical to resist fatalism and maintain a healthy dose of skepticism against dire assessments that could become self-fulfilling. If a peaceful — if competitive — coexistence is the ultimate objective, Washington and Beijing do not need to knock each other out to win.