Henry Huiyao Wang: From Strategic Rivalry to Strategic Stability

CCG President says the challenge after the Xi-Trump meeting is to turn economic interdependence from a source of vulnerability into a framework for stability.

Below is the latest comment by Henry Huiyao Wang, Founder of the Center for China and Globalization (CCG), on the outcome of U.S. President Donald Trump’s meeting with President Xi Jinping.

From Strategic Rivalry to Strategic Stability

It would be a disservice to treat US President Donald Trump’s visit to Beijing as a series of meetings about beans and Boeings. For all that the talks did not resolve many of the underlying tensions in US–China relations, they have already begun to redefine the relationship. Amongst the photo-ops and discussions, President Trump and President Xi Jinping have both embraced the need for strategic stability in the world’s most consequential bilateral relationship.

For nearly a decade, Washington and Beijing have described one another primarily through the language of strategic rivalry. We now approaching a new phase: a transition from strategic rivalry to strategic stability between two deeply intertwined powers.

US–China relations have never stood still. As the late Joseph S. Nye Jr. once observed in a dialogue with me, the relationship has moved through cycles of tension and accommodation. The first decades after 1949 were defined by hostility. The 1972 Nixon opening created a new period of strategic rapprochement. Through the 1990s we saw China integrate, joining the WTO and the US led economic order. Now in 2025, we stand at the midpoint of the latest 20-year cycle that began in the 2010s as the language of strategic competition and strategic rivalry came to dominate.

History does not move mechanically according to schedule but it does seem like we may finally be turning a page towards a new cycle in the relationship. Strategic rivalry worked to describe an era in which distrust was rising and both countries were testing their capacity to withstand pressure from the other. Yet after trade wars, tariff escalation, technology restrictions, and constant talk of decoupling, neither the United States nor China has been able to secure prosperity by decoupling from the other. Instead all the world has seen is mutually assured disruption.

Each side has shown that it can inflict real costs. But neither side can convert this capacity for disruption into a stable foundation for national success. successive trade wars and tit-for-tat retaliations have failed to meaningfully decouple our economies.

The composition of President Trump’s delegation to Beijing made that reality plain. 18 leading American corporate executives accompanied the president to China, representing companies across technology, finance, manufacturing, agriculture, and aviation. The pragmatic realization has finally, if slowly arrived.

The transition from mutually assured disruption under a paradigm of strategic competition toward mutually assured construction under a paradigm of strategic stability is why the newly announced Trade Council and Investment Council matter. If implemented seriously, they could provide the architecture for a disciplined relationship with mechanisms to address trade frictions, distinguish sensitive sectors from non-sensitive ones, manage investment disputes, and identify areas where cooperation can flourish.

Economic policy can also help anchor this new phase. President Trump has spoken of welcoming Chinese investment that creates American jobs, and that instinct deserves serious attention. In the 1980s, Japanese investment in the United States and Europe helped convert commercial anxiety into production, employment, and durable economic ties. The circumstances today are different, but the broader lesson remains relevant: investment can stabilize relationships, create local benefits, and go hand-in-hand with China’s “in the world for the world” strategy.

This is not a return to happy almost go-lucky engagement of the 1990s and 2000s. Washington and Beijing still disagree sharply on technology, industrial policy, and security. But a relationship so consequential will soon no longer be governed by escalation. Competition must be bounded. Disputes managed. Economic interdependence cannot be done away with and thus must be made more predictable, and beneficial, rather than weaponized.

That is also why the language of strategic stability should not be narrowly understood as a bilateral ceasefire. A more stable US–China relationship would help steady the wider international system. It would reassure the G7, give the Global South more room for development, and create greater possibilities for major-power coordination on crises that no country can solve alone.

Iran and Ukraine offer immediate examples. In both cases, the problem is not simply the absence of military capacity, but the absence of credible political off-ramps. The longer wars continue, the harder it becomes for the parties involved to climb down without appearing to surrender. China and the United States do not see every conflict the same way. But when the world’s two most consequential powers can sustain dialogue, they create more space for diplomacy, mediation, and negotiated de-escalation. Strategic stability in bilateral relations can therefore become a catalyst for wider international stability.

A similar logic applies to emerging technologies. Artificial intelligence is becoming a defining arena of national competition, one need to look no further than Trump’s own quickly evolving stance on NVIDIA GPUs being sold to Chinese consumers. But if the United States and China, as the two largest competitors, can continue discussing guardrails for guardrails for AI misuse, (including by non-state actors), autonomous weapons systems, and crisis escalation, then strategic stability will begin to acquire real institutional meaning rather than remaining a diplomatic slogan.

Taiwan remains among the most sensitive issues in the relationship and the ultimate test of whether strategic stability. Beijing has made it clear that Taiwan remains an unalienable part of China, and President Trump’s recent remarks that he does not want to see a war over Taiwan, nor incentivize a misinformed attempt at true secession from China should therefore be read carefully but optimistically. There has been no formal change in US policy, nor should it be interpreted as such. But this does reflect a growing recognition in Washington, that no one benefits from allowing the Taiwan Strait to become the detonator of a wider conflict. Especially as cross-Strait exchanges and dialogue have shown great progress towards peaceful reunification.

That recognition should be developed, not squandered. The United States should avoid steps that foreclose peaceful outcomes or encourage the belief that confrontation is inevitable. China, for its part, should continue to emphasize peaceful development across the Strait and resist actions that unnecessarily narrow the political space for stability. The purpose of strategic stability is not to erase differences, but to keep them from becoming disasters.

The challenge now is to move beyond mutually assured disruption toward mutually assured construction. US–China strategic competition demonstrated the immense capacity of both countries to disrupt one another. Strategic stability offers the possibility of a more mature relationship and the gradual return to a healthier status quo.

CCG interviewed on Trump's China visit