by W. Robert Pearson
US Opening to China—The Boldest Diplomatic Move in Our History
On February 28, 1972, the US and China signed a joint diplomatic document—the Shanghai Communique—during President Nixon’s unprecedented visit to China. The US acknowledged that there is one China, with Taiwan being a part of China. Both countries agreed to work towards normalization of relations, to expand people-to-people contacts and trade, and to lessen Soviet influence.
On January 1, 1979, under President Carter, the US established formal relations with the People’s Republic of China, ending the US official recognition of Taiwan. From Deng Xiao Ping’s ascent to power in China in 1978 to Xi Jinping’s in 2012, the US/China relationship advanced on a mostly unspoken belief in steadily improving ties. China sought closer relations with the United States in general, and the US assumed that China’s economic improvement would tend to liberalize the Chinese economy and political culture. That was not to be the case.
Early Indicators of Problems
As a political officer in Beijing from 1981 to 1983, I witnessed a stream of American businesses arrive to seek opportunities. We noticed early on that the Chinese were reverse engineering American products, without respecting US intellectual property (IP) laws. Many US companies unfortunately thought they could stay ahead in this race. The industrial espionage has gone on for decades and continues today. The Chinese approach has been to “Learn from the barbarian” (Xiang yeman ren xuexi), a well-known phrase to the Chinese going far back in their history. We continue to live with the results of this policy. China has monopolized technologies gained from the West and undermined global and American domestic markets with their products.
The Tiananmen massacre in 1989 caused a major disruption in US/China relations, but the US went back to work to stabilize and expand mutually beneficial interests. Still, a process that had begun optimistically had evolved into strategic competition. With access to international (much of it American) capital, China transformed from a developing country into the world’s second largest economy. At the same time, on the political side, Beijing pressed its interests and points of view in international fora—regional and global, including the UN.
New Century, New and Old Issues
Having obtained WTO membership in 2001, a major victory made possible by American support, China accelerated the growth of its economy. New businesses erupted, exports grew rapidly, more foreign investment flowed into China. Manufacturing production shifted toward China, and millions of Chinese climbed out of extreme poverty. Between 1990 and 2020, China went through one of the fastest and most expansive economic changes in history. It became a determined competitor, not a nation grateful for America’s strong support to reenter the global economy and political process.
Several factors boosted China’s economic rise.
First, President Reagan’s neo-liberalist approach in the 1980’s advocated free market capitalism with minimum government intervention. Under this policy, it was easier to send US investment and jobs overseas.
The unintended effect was to help accelerate the growth of the Chinese economy. Less costly Chinese imports cost American jobs, factories closed, tax bases diminished, population losses occurred through America’s manufacturing belt, and economic insecurity for companies’ workers, farmers, and their families increased. US urban areas profited through financial services, technology, higher education, and professional services. In many other communities, however, people began to understand that globalization had left them behind. The seeds of blaming government for the loss of quality of life and jobs were being sown in America’s culture.
Second, in the 19th century, as the United States rose to be the world’s largest economy, Americans largely had to invent the very improvements that stimulated the progress. The Chinese, however, only had to adapt the American technologies and capabilities that already existed in order to spur their own rapid growth. It was easier for China to make its leap forward than it had been for the US a century earlier. American progress during its bonanza years after the Civil War averaged about 5% yearly growth of GDP. The Chinese growth during a comparable time period in the 20th century was closer to 15% due to a lower beginning point and the lower cost of adaptation versus invention.
China now moves ahead on the momentum the West provided. In the green economy universe, the Chinese are drawing closer to monopolizing tomorrow’s cutting edge for economic growth. Both China and the US are intensely competing over advances in artificial intelligence, semiconductors, and cyber operations. Both countries are investing heavily in AI, chip design and manufacturing, and digital infrastructure to secure strategic advantages for control over global markets. The current American policy to ignore green technology, disregard climate challenges, and rely on oil is a significant miscalculation by the United States. The United States remains for the moment the largest creative global economy, but China is drawing closer.
The Information Technology & Innovation Foundation published last September a claim that “China has emerged as the leading global power in the creation of emerging technologies, dramatically outperforming the United States in the vast majority of critical technological fields.” However, the study also includes seven of 64 “critical technology categories” with American leads, including quantum computing. The handwriting is on the wall, nevertheless. If this report is accurate, the American administration clearly does not understand the message’s urgency.
The Ever-Present Issue of Taiwan
The threat that China will invade Taiwan has been and will remain a serious US national security concern. Xi Jinping told Trump during his recent visit to China that “the Taiwan question is the most important issue in China-US relations.” “If it is handled properly, the bilateral relationship will enjoy overall stability. Otherwise, the two countries will have clashes and even conflicts, putting the entire relationship in great jeopardy.”
China, with its 4000-year history of struggle, advancement, disaster, and return to progress, takes a long view of the unity of the peoples of China. Centuries ago, hundreds, probably thousands, of different tribes and ethnic groups occupied the territory of modern China. The history of China for those long centuries has been to bring all those tribes and peoples under one rule.
That process is still going on—Tibet, Hong Kong, and Xinjiang are merely the latest examples. Smaller tribes are being forced even today to learn Mandarin. CNN reported just days ago (July 1, 2026) that China has adopted a “Ethnic Unity and Progress Promotion Law” that bans acts that “undermine ethnic unity or create ethnic division” among China’s 56 officially recognized ethnicities. This deeply imbedded conviction in Chinese culture gives shape to Beijing’s Taiwan policy.
Various publicized American-run war games about a Chinese invasion of Taiwan have produced different results. According to a recent article by former Commander in Chief of the US Pacific Command Dennis Blair, however, China’s capabilities and preparedness are lacking in key respects. According to Blair, “In more sophisticated simulations that the Department of Defense held in the last decade, China was consistently thwarted in achieving its objective of conquering the island.” Blair also believes that the military balance today tends in the American direction. China faces existential failure if Beijing loses, and this factor alone argues for caution by Beijing.
Trump and China
Trump’s recent trip to China was largely a performative demonstration by him and by Xi Jinping. The surprise was that Trump seemed to accept that China and the US were now on an equal level. Whether he actually understood what he was doing is not clear, but he has clearly given China a different status from his early antagonistic position. He has never made a statement that the US would defend Taiwan in case of a war, though defense preparations and defense policy make it seem so.
He also has suggested that he might use US arms sales to Taiwan as a negotiating point with China, indicating as well that approval of a major arms sale to Taiwan would depend on his talks with Beijing. These two new elements are creating deep concerns. As he has done with NATO and with Ukraine, Trump is equivocal about what assurance he will provide in given circumstances. He believes this tactic serves his interests, but it unsettles much larger issues.
Cutting Edge Military and Security Issues
China’s challenge to the US in outer space is growing. On the commercial side, the US dominates the Chinese competition, but the Chinese, now able to recover orbital booster rockets, will be working faster to catch up. A number of space start-ups have popped up in China.
On the race to the moon, however, the Chinese are very strong competitors. US space policy and financing is subject to every administration’s decisions, while China’s is centrally directed and coordinated, and avoids policy and funding stops and starts. Given the importance of accessing water (ice) at the Lunar south pole, the first country to have a base there will have important advantages both on the moon and on preparing for the jump to Mars. The US on March 24, 2026, detailed specifics about its plans, including a phased roadmap, revealing a new Mars mission targeted for 2028, and a $20 billion base at the south Lunar pole with early habitation of a base there by 2032. China has announced plans to land humans on the moon by 2030 and have a base there by 2035.
Trump’s Golden Dome is the president’s initiative to “deter—and defend its citizens and critical infrastructure against—any foreign aerial attack on the Homeland; and guarantee its secure second-strike capability.” The initiative includes “defense of the United States against ballistic, hypersonic, advanced cruise missiles, and other next-generation aerial attacks from peer, near-peer, and rogue adversaries.”
There are two concerns with this initiative. One is the cost, which may go to $1 trillion and take years to build. The second is that rather than lowering the threat, the initiative may stimulate China and Russia to create counter systems. The more complicated the systems, the greater the risk that something may suddenly go wrong one day.
We have lived with the doctrine of deterrence since the nuclear age began, and it has served us well. Its logic is quite simple: be strong enough to convince an opponent that an attack risks total destruction. Some comments by Americans seem instead to imply that we are preparing for preemptive attacks if required. That could create a hair-trigger on a catastrophic possibility. With nuclear issues, we sought to negotiate with the USSR and China, and we were generally successful with the USSR. One wonders why there was no such attempt regarding the Golden Dome.
China’s Expanded Global Footprint
At the moment, Trump also is not paying sufficient attention to China’s future role globally. The Chinese continue to work for influence in Africa and Latin America. Trump has shown no interest in Africa other than controlling its mineral assets, and in Latin America he has centered on the Panama Canal, Venezuela, and Cuba. Yet, China has years of investment and building key contacts in South America. There is a genuine risk to American security if these blind spots are not addressed. Our 21st and 22d centuries will depend heavily on solid relationships with the global south.
As of today, China is winning the propaganda game with the US while Trump is facing the challenge of the Iran War. A very costly and thus far unsuccessful venture, the war is allowing Chinese influence to expand as America’s weakens. Note that China sent a high-level representative to the funeral ceremonies of Ayatollah Ali Khamenei.
Overall, China is in a stronger international position than ever before. Beijing’s 15th Five Year Plan will emphasize high quality, innovation driven growth while bolstering economic resilience and sustainability. The US Congressional Research Service release of April 16, 2026, highlights the need to protect the US market and promote US competitiveness, enhancing the US role in global technical bodies to counter Chinese use of antitrust, IP and standards tools, address the use by China of US technology, expertise, research, and markets to boost its American S&T capabilities and enhance supply chain security and trade, investment, and technology ties among US allies and partners. These aims will require consistent, focused, and innovative strategies.
What Is at Stake
There is no reason why US and Chinese competitiveness and even cooperation cannot survive the strains balancing the two objectives. The problem is China’s determination to draw even with and then surpass the United States. America regrettably is too short sighted now to offer Europe an opportunity to team up against the Chinese campaign to penetrate the EU market.
China is beset with difficulties. The population is aging and therefore shrinking. Youth have degrees but no jobs. Retirement pension funds are stressed. Homeownership is increasingly threatened. The real estate sector is buried under bad loans. There is declining consumer and investor confidence. The urban/rural income and service divide widens. Gender discrimination persists. Older citizens will see increased chronic disease. The transition pace from export-led growth to innovation-driven growth is glacial. There are upcoming effects on economic ambitions and supply-chain stability from trade tensions, strategic competition, and geopolitical risks. Local government debt and social policy concerns complicate an already difficult circumstance. China is not a supergiant, and it has considerable challenges yet to overcome.
China and the United States are now the world’s top two economies, engaged in a military and security competition and yet each relying on the other in key sectors. It is the most important bilateral relationship in the global system. Together, the two countries have the most influence on the global economy, technology advancement, military balance, climate policy, and the international order for today and for tomorrow.
Americans and Chinese have not fired at each other for 73 years. Maintaining and improving that equilibrium will take great effort, but the consequences of failing would be enormous. Our two countries are likely to be the two principal nations on earth for a long time. We are both going to the moon and later to Mars, and, in time, beyond and deeper into the universe. Our goal should be not just to cooperate and compete; it should be to share for global benefit what we will have as long as we and the earth survive, knowing that the outcome will depend on us.
Ambassador W. Robert Pearson is a retired professional Foreign Service Officer who was director general of the US Foreign Service from 2003 to 2006, repositioning the American Foreign Service to meet the new challenges of the 21st century and winning two national awards for his efforts. He was US ambassador to Turkey from 2000 to 2003. Ambassador Pearson served as executive secretary of the State Department and on the National Security Council in addition to assignments in China and NATO and other overseas posts.