3 Takeaways
The U.S. Alone Can’t Compete with China. Here’s What Absolutely Can. (#250)
Tue, 20 May 2025
China is on the march, is very determined, and has some significant advantages over the U.S. What are they and how should we respond? Two esteemed China experts, former U.S. Deputy Secretary of State Kurt Campbell and National Security Council Deputy Senior Director for China Rush Doshi, say the key is to counter China’s enormous scale by finding common cause with allies. Listen, and learn a lot.
Chapter 1: What are China's advantages over the U.S.?
On critical metrics, China has already outmatched the United States. Economically, it boasts twice the manufacturing capacity. Technologically, it dominates everything from electric vehicles to fourth generation nuclear reactors, and now produces more active patents and top cited scientific publications annually. Militarily,
It features the world's largest Navy bolstered by shipbuilding capacity 200 times as large as that of the United States, vastly greater missile stocks and the world's most advanced hypersonic capabilities. All results of the fastest military modernization in history. Even if China's growth slows and its system falters, it will remain formidable strategically.
So even if China's growth slows, it will remain formidable. That raises two questions. Are we underestimating China? And what would a smart U.S. strategy toward China be? Hi, everyone. I'm Lynn Thoman, and this is Three Takeaways. On Three Takeaways, I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers, and scientists.
Each episode ends with three key takeaways to help us understand the world and maybe even ourselves a little better. Today, I'm excited to be with Kurt Campbell and Rush Doshi. Kurt served as the United States Deputy Secretary of State, and before that, as Assistant Secretary of State for East Asian and Pacific Affairs. He is currently Chairman and CEO of the Asia Group.
Rush Doshi served at the National Security Council as Deputy Senior Director for China and Taiwan. He is currently Director of the China Strategy Initiative at the Council on Foreign Relations. Kurt and Rush are the co-authors of the recent article, Underestimating China in Foreign Affairs Magazine.
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Chapter 2: How should the U.S. respond to China's scale?
I'm looking forward to finding out how we are underestimating China and what a smart and effective U.S. strategy toward China would be. Welcome, Kurt and Rush, and thank you both so much for joining Three Takeaways today.
Real pleasure. Thanks very much, Lynn. Thank you, Lynn.
pleasure is mine. Kurt and Rush, your arguments on China are fundamentally based on China's scale. So before we talk about the US and China, can you put the power of nations and the importance of scale in a historical perspective?
Chapter 3: What historical perspective can we draw on regarding power and scale?
Rush, why don't you lead on that?
We basically think that scale is one of those factors that affects the rise and fall of great powers. Not all large countries are able to achieve scale. A lot of large countries don't become true great powers, but some do.
And when they're able to essentially take the efficiency models that smaller countries have sometimes developed first, think Great Britain, for example, during the first industrial revolution, and apply it on a larger foundation, they can be truly world-shaking. No one really expected that an island in the northwest corner of Europe would grow to dominate much of the world.
And Great Britain did it on the basis of a first mover advantage in the Industrial Revolution. But once those industrial methods proliferated out to other countries, especially larger countries, the British knew that essentially they would get outscaled. And in 1883, a top British nobleman, a guy named Lord Seeley, wrote essentially that Great Britain might go the same way that Florence went.
was outscaled by the great country states of Europe in the 16th century, so too could Great Britain be outscaled by the great powers of the US, Russia, and Germany in the 19th and 20th centuries. And that's essentially exactly what happened. And the question today is, does the US have sufficient scale vis-a-vis China? And I'll end by just noting, China has twice the U.S. manufacturing capability.
It's on track to achieve four times the U.S. manufacturing capability by 2030, according to the United Nations. It's four times the U.S. population. It's investing heavily in the industries of the future. On a lot of different metrics, it actually outscales the U.S. And the only path for the U.S.
to achieve the kind of scale that eluded Great Britain is in common cause with allies through a kind of new capacity-centric statecraft that Kurt and I lay out in the piece.
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Chapter 4: How does manufacturing capacity impact global power dynamics?
Can you talk more about how important scale is now and the different dimensions of scale?
Let's just take China for a moment. I mentioned their manufacturing capability being twice the U.S. That's a value added share of global manufacturing. But if you look at just raw productive capacity and you don't think about the value added component, China's scale there is almost three times the U.S. That ability to manufacture has a lot of advantages for an economy.
First, it has advantages in wartime. It can lead to enormous production. But manufacturing also matters in a second dimension, which is for technological advancement. A lot of innovation comes from the factory floor. It's incremental. A lot of process knowledge and tacit knowledge comes from manufacturing. And even financial advantages can sometimes emerge from being the world's manufacturer.
That was certainly what happened to the U.S. And today that prowess is held by China. If you look at the statistics, Lynn, it's really shocking. I mean, China is twice U.S. power generation, three times U.S. car production, 11 times U.S. steel production, 20 times U.S. cement production.
In global market share, it's two-thirds of all electric vehicles, 80% of electric vehicle batteries, 80% of drones, 90% of uncrewed systems or UAVs or unmanned systems, as some call them. and more than 90% of solar panels and critical minerals. And if you look to the future, manufacturing is going to be dominated by robotics.
Well, China is responsible for seven times more installations of industrial machine robotic technology than the United States. And half of all the world's robot installations occurred in China in 2023. So they're betting on the ability to convert that into even greater manufacturing capability. And again, that is just one of the many metrics of scale.
China is number one in top-sided academic publications in science. It's also number one in active patents. You can quibble with those statistics. You should. They have problems. But quantity is a quality of its own. And we think that matters for global politics.
So the four pillars of scale, if you will, and you've talked about a couple of them, are demographics, economics, science, and the military. What about the demographics and the military?
On the demographic side, there's two dimensions here. One is the sheer size of China, four times the US population, which means there's a large base of talent that they can draw from domestically if they can educate their population properly.
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Chapter 5: What are the demographics influencing China's future?
The biggest variable that has always affected China's strategy is its perception of the relative power gap between the US and China. Back in the Cold War, the US and China were almost quasi-allies against the Soviet Union. It all changed because of a traumatic trifecta of events from Beijing's perspective. The Gulf War showed American military dominance.
The end of the Cold War took away the glue that held the U.S. and China together. And then, of course, there was the reality of the Tiananmen Square massacre in 1989, which revealed to China an ideological threat from the U.S. And after that, the Chinese Communist Party's Central Committee sort of determined that the U.S. was the chief adversary of China.
And that led them to start a strategy that they called hiding capabilities and biding time to quietly blunt America's power while continuing to benefit from the economic trade with the United States that built China into superpower today. And all that continues until 2008, when the global financial crisis scrambles China's perception again of America.
And this time they saw the United States as weakening, still threatening, but weakening. And that led them to a new strategy, not hide capabilities and buy time, not blunting American power, but actively accomplishing something, building Chinese power, specifically Chinese order within Asia.
They invest in power projection capabilities within the region so they can tell their neighbors more what to do. They build economic institutions within the region so they can demonstrate leadership. They also build political institutions, et cetera. Beginning in 2016, 2017, China's perception of the US changed one more time.
There was a perception that the US and the West were sort of riddled with populism that was eroding the capability of government to function. And they have a new phrase, the Chinese in this period under Xi Jinping, which is great changes unseen in a century. The world is undergoing great changes unseen in a century.
And that's what brings us to a global period of Chinese grand strategy focused on global military bases, making the world more dependent on China's supply chains than China is on the world's.
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Chapter 6: How does the U.S. military compare to China’s military?
leading in technology, what they call the fourth industrial revolution, not just for prosperity, but for power and resetting the foundational baseline assumptions of the international system to be more conducive to China's authoritarian system of government than the democratic one that we have.
Rush, what is China doing now in its relations with other countries?
We're right now a few months into a new US administration, the Trump administration, which is pursuing a different approach on a variety of fronts, including with allies. What China is doing right now is it's seeing a degree of opportunity in pulling away some of the countries that might be wary of the US approach or disaffected. And it's trying to drive a wedge between the US and those countries.
That's not new. China has sought to do this, and Kurt knows it better than I have, having been involved in just about every major effort in the post-Cold War era on Asia. China has been trying this game for a long time. It's not clear they're going to succeed now either, but that's a critical focus of their foreign policy.
Separately from that, they're also aligning with countries that share their perspective or their sense of agreement relative to the U.S. order. And we know those countries. It's Russia, Iran, and North Korea.
I would just say, Lynn, on the nature of sort of China's relations with these group of nations that are challenging global order, Russia, North Korea, and Iran, it is one of the most troubling developments we've seen in recent years. But the thing that Rush pointed to in Europe is the one that should trouble us the most.
If you look historically at some of the guiding principles of Chinese foreign policy, one of the most important which they have championed for decades is the notion of the critical importance of national territory and existing territorial lines of jurisdiction. And they have been resolute about that in various crises in Africa and Southeast Asia over decades. I think what Rush points to is that
This is on the part of Russia, a full on assault, not just at Ukraine, but the existing drawn boundaries that have animated decades of stability in Europe. And what essentially has happened is that China has allied itself in ways
You know, they've tried to do some of this secretly, but has enabled Russia to go directly at those lines that have been broadly accepted by all global powers, except perhaps for Russia. Now, China, I think, explains it to itself. You saw inadvertently the remarks of the Chinese ambassador to France in 2023, in which he basically indicated
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Chapter 7: What is China's long-term strategy against the U.S.?
I'll do one and let Rush do the other two. I think the most important argument here is not to underestimate China in this highly dynamic period. Rush, over to you for the last two.
I think first is that scale matters in the rise and fall of great powers. That scale is important. And this gets to Kurt's point about hegemonic prophecy. You don't want to underestimate others. If you take into account their scale, where that is a strength, where they have weaknesses, but scale matters.
China has scale right now relative to the United States in critical metrics relevant for the generation of strategic advantage and technological advantage. And the US on its own lacks that sense of scale. The US can find scale. It has a great repository of scale in its allies. And together with those allies and partners, That group of countries vastly outscales China.
So to kind of sum it up, scale matters and you have to get your hegemonic prophecy right. China has scale. The U.S. alone does not. The U.S. can get it with allies.
Thank you both. Thank you for your service in government. And I really enjoyed this conversation.
Thank you very much, Lynn. Thank you.
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I'm Lynn Toman, and this is Three Takeaways. Thanks for listening.
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