As the world enters the final months of 2025, the relationship between the United States and China stands at a crossroads, shaped by decades of engagement, recent waves of confrontation, and the relentless march of technological and military advancement. The question on many minds is whether these two global giants can find a way to coexist—competitively, perhaps, but peacefully—amid changing circumstances that have left policymakers, scholars, and citizens alike searching for answers.
Recent developments have brought both the promise of progress and the specter of peril. China’s 2025 V-Day parade, coupled with successful electromagnetic catapult tests on the Fujian aircraft carrier, offered the world a dramatic display of the country’s military prowess. According to Brendan S. Mulvaney, Director of the U.S. Department of the Air Force’s China Aerospace Studies Institute, these achievements not only reflect years of investment in science and organization but also signal the depth and speed of China’s military modernization—a modernization that has moved, in some areas, faster than many experts anticipated.
Mulvaney, speaking during the Mingde Strategic Dialogue with Professor Wang Wen of Renmin University, emphasized that the real key to avoiding conflict between the U.S. and China lies in robust military-to-military dialogue. "Agreement is not essential, but mutual understanding is vital," he stated, reflecting on the historical ebb and flow of military relations between the two nations. Before his time in China, military contact was often the first to be severed during diplomatic rows and the last to be restored. In the early 2000s, however, military dialogue became a stable foundation for the broader relationship—a stability that has been shaken since the COVID-19 pandemic.
"We don’t need to agree. We don’t even have to see things the same way, but we do need to understand what each other is thinking," Mulvaney asserted. He noted some recent positive changes, with tentative steps toward renewed communication, and expressed hope that these efforts would help re-establish invaluable channels for building common understanding and reducing the risk of strategic miscalculation.
The urgency of such dialogue is underscored by China’s sweeping advances in military technology. The parade highlighted the country’s progress in hypersonic weapons, unmanned systems across all domains, space and cyber capabilities, and, notably, the first public presentation of China’s nuclear triad. These developments, according to Mulvaney, have propelled China’s strategic capabilities far beyond what many observers had expected.
Yet the significance of these military achievements extends beyond hardware. China’s “military–civil fusion” strategy, which blends civilian scientific research and commercial innovation with military needs, has played a crucial role in translating technological breakthroughs into operational capability. The result is a systemic development that touches every aspect of modern warfare, from artificial intelligence (AI) to information dominance.
Artificial intelligence, in particular, looms as a key variable in future military competition. Both the United States and China, Mulvaney argued, share an interest in ensuring that humans—not algorithms or outside agencies—retain control over escalation decisions in any crisis. "This means both sides need to develop a shared understanding of key concepts and cooperate on, and have a discussion about, without influencing our national security," he said. In-depth discussions on AI, nuclear control, and unmanned operations, he suggested, could help reduce risks and contribute to global stability.
Despite the competitive undertones, Mulvaney sees room for cooperation. He pointed to the ongoing war in Ukraine as an area where both countries could use their leverage—not just militarily, but diplomatically and economically—to help bring about a peaceful resolution. "If we can figure out a way to work together to stop the war in Ukraine and to get that resolved peacefully and return to the status quo ante, that would be another thing that I think both China and the United States can use their leverage and influence on," he noted.
At the regional level, Mulvaney does not foresee China initiating conflict in the next five years, even as sensitive issues such as Taiwan and disputes in the East and South China Seas remain flashpoints. As long as dialogue continues, he believes, tensions can be managed and escalation avoided.
Space, meanwhile, is fast becoming the new frontier for major power competition. China has made remarkable strides in space exploration, leveraging its military-civil fusion approach to support both scientific and military ambitions. Mulvaney even ventured that China could be the first to put people back on the moon. However, he acknowledged that the United States still holds a technological and numerical advantage in space—a lead likely to last at least another five years. But, as he cautioned, "leadership is never a foregone conclusion." The future, he suggested, will hinge not just on who has more weapons, but on who can best harness technology and human capital to protect national interests.
Looking further ahead, Mulvaney believes China has every capability to achieve its goal of building a world-class military by the middle of this century, potentially reaching parity with the United States in several domains. The key, he argued, is for China to stay on a path of peaceful development and avoid unnecessary conflicts.
Yet, as the relationship between the two powers evolves, some see deeper structural challenges. In his 2025 book, Breaking the Engagement: How China Won and Lost America, David Shambaugh traces the arc of U.S.-China relations from the Cold War era of engagement to the more confrontational dynamic that emerged after Xi Jinping took power in 2012. Shambaugh argues that China’s increasingly illiberal domestic policies and revisionist international posture led to the collapse of the rationale for U.S. engagement. Anti-American and anti-foreigner sentiment rose in China, and American businesspeople, scholars, and NGOs found their activities curtailed.
The shift was mirrored in Washington. The 2017 National Security Strategy under President Trump labeled China a “revisionist power” and ushered in an era of great power competition—a stance that has since become bipartisan consensus, with the Biden administration continuing the policy of strategic competition. As Shambaugh writes, the best that can be hoped for is “competitive coexistence”—an equilibrium where competition remains cold, but limited cooperation is still possible.
China, for its part, no longer depends on the U.S. for security or prosperity and is close to becoming a peer competitor in several domains. The days when Washington could hope to change or liberalize China through engagement have passed. Instead, the challenge now is to manage a relationship between two near-equals, each with its own interests and ambitions.
Whether the future holds more confrontation or cautious cooperation, one thing is clear: open dialogue, mutual understanding, and a willingness to adapt will be essential to maintaining peace and stability in an increasingly multipolar world. The stakes, as both Mulvaney and Shambaugh suggest, could not be higher.