The rise of China and Beijing’s assertive foreign policy under Xi Jinping are fundamentally changing the geopolitical landscape in the Indo-Pacific. Specifically, a more confident China is perceived in Washington as destined to challenge U.S. supremacy in the region for the past seven decades. The Thucydides Trap, as the emerging rivalry between a rising power and the reigning one, carries significant risks in that failure of conflict management could well result in major clashes between the two countries and, as a consequence, place regional peace and stability in peril. This chapter reviews a range of areas where Sino–U.S. rivalry exists and analyses the likely scenarios and policy options for both Washington and Beijing. It argues that U.S.–China rivalry can take a number of different forms, not all of which would end in military confrontation, with the exception of Western Pacific where the two militaries are engaging in growing overlapping and close-range encounters. Both powers recognize the stakes and are making efforts to manage their differences and minimize the impact of conflicts.
One of China’s priorities in defense modernization is to develop a military strategy based on fighting and winning informationized local wars, in particular its ability to deter and defeat Taiwan independence and US military intervention in any possible Taiwan Strait scenarios. Informed by its long-held tradition of active defense, this strategy places great emphasis on engaging a superior enemy through asymmetrical warfare, and highlights the critical importance of Anti-Access/Area Denial (A2/AD) that place an opponent’s fixed – and increasingly mobile – assets in the Western Pacific theater at risk. The chapter will review and discuss these developments, the US AirSea Battle Concept (ASBC) and alternative responses to the A2/AD challenges and explains the potential risks of miscalculation and escalation. It argues for greater US–China military dialogue and the introduction of crisis management mechanisms in order to prevent major escalation and open confrontation between the region’s two great powers.