For much of the first quarter of the 21st century, American policymakers treated China as an economic phenomenon to be managed rather than a systemic competitor to be challenged and stopped. The result was not only China’s inexorable rise, but America’s decline in the foreign policy arena. Washington was effectively comatose until 2017, while Beijing was cunningly executing a strategy designed to achieve its long-term foreign policy objectives, with what amounted to a wink and nod from the Americans. One need look no further than China’s expropriation of the Spratly Islands, de facto expropriation of territory in the Philippines’ territorial waters, and the execution of the Belt and Road Initiative to see this. Beijing approached globalization not as a neutral process, but as a target rich environment to be taken advantage of. It fused state power, capital allocation, technology policy, diplomacy, and institutional engagement into a unified strategy focused on accumulating long-term advantage. The US, by contrast, compartmentalized—separating trade from security, markets from geopolitics, and short-term efficiency from long-term resilience. This divergence produced a period of strategic sedation. The US assumed that integration would produce convergence, that rules would constrain behaviour, and that time favoured transparency. China assumed the exact opposite: that competition was permanent, rules were tools to be used for strategic advantage, and that time favoured those who deployed their resources wisely.
The consequences were cumulative rather than dramatic. China embedded itself deeply in global supply chains, secured access to critical minerals, expanded infrastructure and financing across the developing world, and positioned itself as a central node in manufacturing and technology ecosystems. These were not accidental outcomes of growth, but deliberate components of a state-led strategy. Slow to adapt, American policy focused on commercial developments rather than future-oriented strategy. What has changed in recent years is the recognition that delay itself had become a liability.
The defining feature of current U.S. foreign policy is not escalation but anticipation. Washington is no longer content to respond to China’s moves after strategic terrain has already been shaped. Rather, it is increasingly acting to influence conditions well into the future—integrating economic, technological, diplomatic, and security tools into a more coherent competitive posture. Trade policy is now understood to be a blunt strategic instrument. Technology controls are designed not only to protect existing advantages but to shape the future landscape. Investment screening, supply-chain diversification, industrial capacity, alliance coordination, and deterrence posture are finally being treated as interconnected rather than episodic. This reflects a belated but critical insight: in modern great-power competition, no single domain determines outcomes.
Critics warn that this shift risks fragmenting the global economy and undermining multilateral institutions. Those risks are real. But they must be weighed against the costs of inaction. China’s strategy relied in part on the assumption that the US would remain reluctant to align economic policy with geopolitical objectives. That is no longer true. But the result is not wholesale disengagement, since absolute decoupling is neither feasible nor desirable. What is emerging instead is selective competition—designed to reduce strategic vulnerabilities without abandoning global engagement. Openness without reciprocity created exposure. Efficiency without resilience created dependence. Correcting those imbalances is not protectionism; it is strategic adaptation.
Equally important is the psychological shift underway. For years, US policy was constrained by the belief that difficult choices could be deferred and markets or institutions would resolve tensions organically. American policymakers are finally thinking in terms of power, leverage, and long-term positioning—concepts that have long endured in Beijing. China competes everywhere simultaneously: through standards-setting bodies, development finance, infrastructure diplomacy, digital ecosystems, and military modernization. Meeting that challenge requires a response that is similarly integrated. Fragmented policies produced fragmented outcomes. Coherence and effective use of America’s considerable resources is now the objective.
Whether this awakening will endure remains uncertain. Strategic competition with China is not a challenge that can be managed through bursts of activity or rhetorical resolve. It requires sustained investment, institutional discipline, and political continuity across administrations. It also requires managing alliances whose economic interests do not always align neatly with strategic risk. The US has shed the illusion that time and inertia alone will shape outcomes in its favour. It has recognised China as a present, systemic competitor rather than a possible transitional partner. America was not absent in the early 21st century—just comatose. The question now is not whether the US understands the nature of the competition it faces, but whether it can sustain the focus and devote the resources required to compete effectively over the long term.
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Daniel Wagner is CEO of Country Risk Solutions and Managing Director of Multilateral Accountability Associates.
