Why America Needs a New China Strategy | Kurt Campbell & Rush Doshi

In Episode 442 https://hiddenforces.io/podcasts/america-needs-a-new-china-strategy-kurt-campbell-amp-rush-doshi of Hidden Forces, Demetri Kofinas speaks with Kurt Campbell and Rush Doshi. Kurt is the chairman and co-founder of The Asia Group and served as the United States Deputy Secretary of State in the Joe Biden administration and as the Indo-Pacific Coordinator from 2021 to 2024. Rush also served under the previous administration in his capacity as the Deputy Senior Director for China and Taiwan Affairs on the National Security Council and is the author of the extremely influential book, "The Long Game: China's Grand Strategy to Displace American Order." Kofinas, Doshi, and Campbell spend the first hour of their conversation discussing the nature of China's rise and the challenges it poses to American power, both in terms of its economic, technological, and military development and the scale at which it operates. They also explore the limitations of a 'go-it-alone' approach to great power competition in this new century and the importance of achieving what Kurt and Rush call "allied scale"—the notion that America's decisive advantage comes from its network of alliances. This first hour also includes a series of historical deep dives ranging from the Cold War and the Anglo-German rivalry to America's own period of rapid industrial development beginning in the late 19th century, how American industrial capacity proved decisive in shaping the balance of power in the 20th, and the lessons that can be learned when applying this history to the Chinese economy today. The second hour is devoted to a conversation about what "allied scale" would look like in practice, the steps that would need to be taken in order to get us there, and the obstacles the United States and its historical allies face in implementing this approach. Demetri also asks Kurt and Rush whether the United States may be exaggerating the threat that China poses at the expense of more important domestic priorities, and the consequences to the stamina of America's alliances and the durability of international peace and security if it is. The three conclude the second hour with an important conversation about Taiwan, including military contingencies, the diplomacy of deterrence, the public support (or lack thereof) for any type of security commitments to Taipei, and whether the United States is even in a position to win a war in the Pacific. Subscribe to our premium content—including our premium feed, episode transcripts, and Intelligence Reports—by visiting HiddenForces.io/subscribe https://hiddenforces.io/subscribe. If you'd like to join the conversation and become a member of the Hidden Forces Genius community—with benefits like Q&A calls with guests, exclusive research and analysis, in-person events, and dinners—you can also sign up on our subscriber page at HiddenForces.io/subscribe https://hiddenforces.io/subscribe. If you enjoyed today's episode of Hidden Forces, please support the show by: Subscribing on Apple Podcasts https://podcasts.apple.com/us/podcast/hidden-forces/id1205359334, YouTube https://www.youtube.com/channel/UC8URhgYos5fjHqFSO4RSIEg, Spotify https://open.spotify.com/show/0TK6u251zGSlMgJKH6cOaP, Stitcher https://www.stitcher.com/podcast/demetri-kofinas/hidden-forces, SoundCloud https://soundcloud.com/hiddenforces, CastBox https://castbox.fm/channel/2629539, or via our RSS Feed http://hiddenforces.libsyn.com/rss Writing us a review on Apple Podcasts https://podcasts.apple.com/us/podcast/hidden-forces/id1205359334 & Spotify https://open.spotify.com/show/0TK6u251zGSlMgJKH6cOaP Joining our mailing list at https://hiddenforces.io/newsletter/ Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou Subscribe and support the podcast at https://hiddenforces.io https://hiddenforces.io/. Join the conversation on Facebook https://www.facebook.com/hiddenforcespod/, Instagram https://www.instagram.com/hiddenforcespod/, and Twitter https://twitter.com/hiddenforcespod at @hiddenforcespod Follow Demetri on Twitter at @Kofinas https://twitter.com/kofinas Episode Recorded on 09/23/2025

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Demetri Kofinas?

  What's up, everybody? My name is Demetri Kofinas, and you're listening to Hidden Forces, a podcast that inspires investors, entrepreneurs, and everyday citizens to challenge consensus narratives and learn how to think critically about the systems of power shaping our world. My guests in this episode of Hidden Forces are Kurt Campbell and Rush Doshi. Kurt is the chairman and co-founder of the Asia Group and served as the United States Deputy Secretary of State in the Joe Biden administration and as the Indo-Pacific Coordinator from 2021 to 2024. Rush also served under the previous administration in his capacity as the Deputy Senior Director for China and Taiwan Affairs on the National Security Council

• 0:45Demetri Kofinas?

  and is the author of the extremely influential book, The Long Game: China's Grand Strategy to Displace American Order. We spend the first hour of this conversation discussing the nature of China's rise and the challenge it poses to American power, both in terms of its economic, technological, and military development, and the scale at which it operates. We also explore the limitations of a go-it-alone approach to great power competition in this new century and the importance of achieving what Kurt and Rush call "allied scale", the notion that America's decisive advantage comes from its network of alliances. We also do a series of historical deep dives into previous eras of great power competition, ranging from the Cold War and the Anglo-German rivalry

• 1:30Demetri Kofinas?

  to America's own period of rapid industrial development, beginning in the late 19th century, how American industrial capacity proved decisive in shaping the balance of power in the 20th, and the lessons that can be learned when applying this history to China's economy today. The second hour is devoted to a conversation about what allied scale would look like in practice, the steps that would need to be taken in order to get us there, and the obstacles the United States and its historical allies face in implementing this approach. I also ask Kurt and Rush whether the United States may be exaggerating the threat that China poses at the expense of more important domestic priorities, and the consequences of the stamina of America's alliances

• 2:14Demetri Kofinas?

  and the durability of international peace and security if we are. Finally, we conclude with an important conversation about Taiwan, including military contingencies, the diplomacy of deterrence, the public support, or lack thereof, for any type of security commitment to Taipei, and whether the United States is even in a position to win a war in the Pacific. If you want access to all of this conversation, go to hiddenforces.io/subscribe and join our premium feed, which you can listen to on your mobile device using your favorite podcast app, just like you're listening to this episode right now. If you want to join in on the conversation and become a member of the Hidden Forces Genius Community,

• 2:58Demetri Kofinas?

  which includes Q and A calls with guests, discounted access to third-party research and analysis, and in-person events like our intimate dinners and weekend retreats. You can also do that on our subscriber page. And if you still have questions, feel free to send an email to [email protected] and I, or someone from our team, will get right back to you. And with that, please enjoy this incredibly educational and intellectually exhaustive conversation with my guests, Kurt Campbell and Rush Doshi.

• 3:35Demetri Kofinas?

  Rush Doshi and Kurt Campbell, welcome to Hidden Forces.

• 3:39Speaker 01

  Thank you.

• 3:40Speaker 02

  Great to be with you. Thank you.

• 3:42Demetri Kofinas?

  It's a real pleasure having you guys both on. So how long have you guys known each other for?

• 3:46Speaker 01

  Oh, at least 10 years, I think, at this point, right, Kurt?

• 3:48Speaker 02

  Yeah, I first met Rush. Rush was a graduate student finishing up his PhD at Harvard. I had just left the Obama administration. I was trying to figure out how to finish a book that I hit kind of that point where the idea of quitting made you sick to your stomach, but the idea of continuing made you want to faint. And Graham Allison was nice enough to connect us. Rush helped me enormously on finishing up the book that I wrote, The Pivot. He was instrumental in that. When I went into, was asked by Jake and the President to, Jake Sullivan and the President, form this new initiative at the White House, the Indo-Pacific Coordinator. The first person I called was Rush Doshi,

• 4:32Speaker 02

  and he served with absolute distinction. And you've seen what he's done subsequently at The Council on Foreign Relations in Georgetown and his book, which is masterpiece, frankly, on the long game. And we've had the opportunity to write articles together, and we're currently teaching together at Georgetown as well.

• 4:52Demetri Kofinas?

  Yeah, Rush has been on the podcast once before. I should mention that for people that didn't hear that episode. And I think I mentioned this to you at the time, Rush, that The Long Game was one of, if not the, I understood it to be one of the most, if not the most influential book among people within the foreign policy community focused on China. You guys both worked for the Joe Biden administration. Kurt, you served as Deputy Secretary of State, and Rush was Deputy Senior Director for China and Taiwan Affairs on the National Security Council. What is it that you each find in each other's work that you think has led to this frequent collaboration where you have co-written how many articles?

• 5:28Speaker 01

  I think about five or six foreign affairs pieces over the last five or six years. So quite a bit of collaboration. But I think, you know, the reality is that people who focus on China and focus on Asia and think about what the United States needs to do in this era of strategic transition, there's not that many people in that space. And so it's been a privilege to be able to work with Kurt, who is, you know, one of the leading Asia policy person in the US. So I think that's been a big part of it. We also both, I think, appreciate finding historical parallels for the contemporary moment. The class we're teaching actually is all about the history of American strategy in Asia. And it's just funny, as you teach that class and you go back and look at the decisions that were made decades ago, or in some cases, over 100 years ago, you find the parallels to the current moment. So I think an appreciation for history and appreciation

• 6:12Speaker 01

  for the subject has been a big part of it.

• 6:14Speaker 02

  I would say also, I just very much appreciate Rush's intellectual flexibility, his ability to wrap his mind around very complex issues and then take it in pieces, think through how to make strategic arguments. We did a piece a couple of years back on basically elements of how Europe or European order was restored during the 19th century, the famous diplomacy of Kasselreich and Metternich. And we tried to look at that

• 6:48Speaker 02

  Case study to see whether there were elements of that that applied to the Indo-Pacific. And we were able to, I think, provide interesting case study about how we might think about order in this very complex period. But it's one of the things that I enjoy the most. When we sit down with an idea and try to frame it, it's one of the most exciting, interesting things that I've gotten to do since leaving government.

• 7:15Demetri Kofinas?

  So in a recent New York Times op ed that you co-wrote, this, I think I actually, this recent op ed is kind of like a condensed version of the piece you wrote in April, title, "Underestimating China for Foreign Affairs." Is that accurate, you think?

• 7:28Speaker 02

  Yeah, but it also, I would also say, through Russia's good work, it does make some arguments that are novel. I think the visual manifestations, the graphing and other things, make absolutely clear that the path to American strategic engagement with China, the only viable course is through allies and partners. And I think we make that argument sharper and in a compelling way in the New York Times piece.

• 7:59Speaker 01

  And I would just add to what Kurt said, that there's also, in addition to this graphic and some of the data that we have, a focus on what it means, now that we're several months in, for President Trump to create scale of his own. Is there a path for Trump to get there and create a version of scale with allies and partners that could rival China? So these are the two things we wanted to kind of delve into deeper in the New York Times piece.

• 8:19Speaker 02

  You know, the argument that we make is that, obviously, previous administrations, and particularly President Biden, favored persuasion and partnership, where President Trump and his team leans more heavily on sort of course of strategies. But we also argue that there are elements of that approach that could be modified and repurposed for capacity building.

• 8:47Demetri Kofinas?

  So in that New York Times article, you wrote, quote, "For the first time in its modern history, the United States faces a rival, China, that has greater scale in most of the critical dimensions of power, and American national's capacity alone may not be enough to rise to the challenge." And then you go on to say that we are entering an era in which, quote, "The true measure of American primacy will be whether Washington can build what we call allied scale, the power to compete globally in tandem with other countries across economic, ecological, and military domains."

• 9:18Demetri Kofinas?

  Can you, both of you, please, speak to the nature of the challenge that you believe China poses, both in terms of the scale of its technological, economic, and military development, and in terms of what its development and governance model represents as the primary competitor to what is seen as an increasingly corrupt form of Western capitalism?

• 9:39Speaker 01

  Well, I think what we talk about is allied scale as a new concept, right? As a concept that would be useful for framing how the US responds to China. But your question, Dimitri, is, you know, what exactly is it about China that even requires allied scale? And if you look across history, the scale has often been a critical part of the rise and fall of great powers. You look at Great Britain, right? They won the first industrial revolution, they hit the jackpot with steam power. And then they realized something. In 18, I think it was 1883, the British Lord John Seeley wrote this book about the rise of Britain. But he says at the end of it, that essentially, the industrial techniques that Britain has mastered and innovated, if they are adopted by countries with greater size, greater scale, greater population, they will outscale Great Britain in the end. And that's sort of what happened.

• 10:20Speaker 01

  We saw the US, we saw Russia, we saw Germany begin to adopt the very industrial revolutionary techniques that Great Britain had pioneered, and they outscaled Britain. And then you fast forward to the 20th century, and suddenly, between 1880 and 1920, America becomes a colossus, the world's biggest manufacturing power. Adolf Hitler warns about America having unimaginable productive capacity. Yamamoto, who planned the attack on Pearl Harbor, a subject that Kurt and I just taught last week, was no fan of the attack himself. He thought that this was a mistake because of America's unimaginable productive capacities as well. He thought it could run wild for six months. So they understood, the Axis powers understood, that America had greater scale. And now we come to a moment where the scale that built the American century, that sense of daunting scale, may for the first time truly be possessed by a rival.

• 11:04Speaker 01

  A rival whose scale is so significant that America alone, again, for the first time, cannot rival it basically with its own national capacity. And if you look at the statistics, right, and we talk more about these in greater detail if there's interest, but China is twice America's manufacturing capacity, twice America's electricity production. Of course, per capita, these numbers don't look as impressive, but quantity is a quality of its own, particularly for the generation of strategic effects. So you asked me very specifically, what does that mean for the US? Well, we're entering a world where militarily the US could be overmatched by Chinese production. Economically, the US could become more dependent on Chinese production. Technologically, China could leverage its industrial scale to create technological advances that put it at the leading edge of innovation. And finally, politically, this kind of heft allows you to rewrite the rules of the system.

• 11:49Speaker 01

  But put all that aside, there's a bigger question that matters to the average American person, a question that I think we often don't think enough about in foreign policy. And that's what is the business model of America going to be? In a world where China makes everything and is leading in technology, what is the business model of our country going to be? What does that mean for the average American trying to get by? So this is not just a geopolitical question, it's an economic question. And that's why we need, yes, domestic renewal at home, but you need allied scale to make that renewal stick.

• 12:14Speaker 02

  Look, I like that explanation very much, Dmitry. I would say that to bring this down to earth, if you look at the metrics of national power increasingly, they are measured, in the Cold War, it was through throw weights and things like that between the United States and the Soviet Union. Increasingly, it is in technological capacities. And that is in 5G, that's in quantum computing, synthetic biology, AI. But it's also in elements of military capacity, shipbuilding, other forms of industrial might. Across virtually all of those vectors,

• 12:57Speaker 02

  China outpaces the United States and someplace absolutely dominates the United States. And the only way we believe that we'll be able to compete effectively is if we band together with other like-minded states who we have essentially worked to create what we might describe, Dmitry, as an operating system in which we generally share the parameters of strategic coexistence and sustaining certain qualities of our markets and our approach to technology.

• 13:32Demetri Kofinas?

  What about the second part of my question, which had to do with development models? And the reason I ask this is especially because younger people, you see this on places like TikTok and social media, seem to be sharing and interested in what is going on economically in China. And while this is actually something we're talking about before we turn on the microphones, while if you ask those people whether they actually want to go live in China, you might get a different set of answers. Is there an ideological competition of sorts or something that could be categorized as such somehow, that competition between the Chinese economic development model and the the Western one? And is there a chance that China's could become increasingly popular in the quote "third world" or the "developing world"?

• 14:17Speaker 02

  So there has been a substantial debate in foreign policy circles and social sciences about whether, in fact, China has an exportable model, both on the economic side, but also in terms of governance. And I think on the governance side, it's clear they have refined technologies and capabilities that are best designed to keep authoritarian, relatively narrow governments in power. And you've seen the export of technologies and capabilities, police forces, training, a variety of other capacities to a number of countries that share very little in the

• 15:01Speaker 02

  Pacific and in South Asia. The only thing they share is a desire to remain in power and a proclivity to take assistance of some sort from China. So I think to the extent that there is a export model, it is really around these capabilities and technologies that are about sustaining governance. On the economic model, I would have said that China attracted a relatively large group of admirers in an earlier period. The Sun's and the the folks that worked with Zhu Rongji and other senior

• 15:42Speaker 02

  Chinese policymakers, these were some of the most accomplished and effective, basically, financial and commercial engineers on the global stage. And they navigated China in a very complicated period. I think some of that effectiveness has undeniably been lost, particularly during this third term of President Xi. He has gathered around him a group of advisors with remarkably little experience or international reputation. They are frankly, carefully trying to not take steps that will in any way create unhappiness

• 16:25Speaker 02

  with President Xi, who is essentially a one-person decision-making vehicle in the collegium, in the standing committee. And many of the harder decisions around, you know, spend more focus on domestic consumption, some of those harder choices, we've noted that I think China has been reluctant to take those steps for a variety of reasons. And it is probably also the case that President Xi's understanding of the Chinese economy is limited. And so I'm not sure there is that much right now to admire in the Chinese overall approach.

• 17:10Speaker 02

  I think that there are contradictions in the system, but there is momentum in so many of their industrial pursuits and that it is in fact those capacities that Russia and I are most focused on.

• 17:21Speaker 01

  Yeah, I think, Dmitry, if you just look at the kind of metrics that people care about, right? We talked about how China is two times the share of global manufacturing value add relative to the US, two times the power generation, three times the car production. I think it's 11 times the steel production, 20 times the cement production. If you look at the sort of shipbuilding area that Kurt mentioned, it's now famous that they have 230 times the capacity to build ships than the United States. But that's sort of heavy industry. Let's look at the future, right? Let's look at electric vehicles where there are two thirds to three quarters of electric vehicle production, 80% of batteries, 90% of drones maybe now, 90% of pharmaceutical ingredients like antibiotics or...

• 17:59Speaker 02

  Robotic manufacturing, yeah.

• 18:01Speaker 01

  Yeah, and then you go into solar panels, 90%, and then you get to industrial technology like robotics. And there, you know, China installed last year, it looks like seven times as many industrial robots as the United States. Other metrics say 10 times as many. And if you look at Chinese factories today, there's not a lot of people working on those assembly lines. Oftentimes, it's highly automated. And so the question really is, you know, how can the United States compete with that kind of scale? You raise a point, which is that on TikTok, on social media, you see these incredible videos, which is sort of propaganda of all of China's incredible LED lights in Chongqing and this cyberpunk city and the western part of China and all that stuff. And that's all interesting. But at the end of the day, their system has challenges, too. We can talk about them.

• 18:44Speaker 01

  As for whether this is a contest of models, whether China's exporting its model, I don't think that's quite right either. I think they are exporting surveillance autocracy, and they've been doing that for years, as Kurt mentioned. And there's more and more data about this. It's really undeniable. But when it comes to the economic story, what they have done is sort of bespoke. It's a combination of state capitalism mixed with free market capitalism, planning mixed with, you know, impromptu chaos that's led to this sheer increase in production. It's not a straightforward story. And really, what you see in China is an effort to learn from how the US modernized, and the US in turn can learn a little bit from how China has been able to catch up to the frontier. Let me end with this. To me, the most interesting things about the Chinese model are the following.

• 19:29Speaker 01

  First of all, there's not a worship of financial efficiency. That has its own problems. There's a lot of financial waste, but it creates greater scope for industrial imagination. The second is that there's enormous competition in the system. The way China does industrial policy is sectoral. Let's get all this sector funded. Let's have the companies kill each other to figure out which antibiotic-resistant bacteria emerges from the Petri dish, essentially, and goes global of Chinese competition. In America, we do industrial policy by funding like three big companies and hoping for the best. You know, the other element here is that China does focus on technology, not just business-to-business software as a service, B2B SaaS, but also on hardware, on deep technology. And they're really investing in these spaces because if you look at how China thinks about science and tech, it isn't social media.

• 20:14Speaker 01

  It's quantum computing, it's all the areas that Kurt just mentioned. It's AI applied industrially, it's advanced manufacturing. So there's a real sense, and you get this in my friend Dan Wong's book, that China is trying to engineer the future, whereas the United States is looking for the efficient allocation of capital. And those are two different goals. They both have their strengths and weaknesses. I think some in China want to be more efficient about capital use, and some in America would like to invent the future in more industries.

• 20:38Demetri Kofinas?

  So so many things that I rushed to respond to. Maybe I'll need to attenuate the number that I'm going to actually respond to. I actually recently interviewed Adam Posen. That episode comes out in a few days. And we talked about this issue of capital heavy versus capital light investments. And that in the US, investors have been driven toward capital light. Crypto, software as a service, as you said, things where the margins are bigger and the potential return is much higher from a financial perspective. And I don't know what the solution there is, but I feel like, to your point, there is not enough mental space, at least in the public discussion, being devoted to how do we change those incentive structures in the US

• 21:21Demetri Kofinas?

  in order to also help drive private capital toward this. This is also something else about how the Chinese model promotes internal competition. This is also, I think, something that like, I don't know how many people realize it, but it's a pretty important thing to understand, which is that while both China and the Soviet Union were nominally communist, the USSR had a very different economic development model with very large state champions, and they were insulated from international competition. Whereas the Chinese have used that sort of state capitalist model, as I understand it, and please do correct me if I'm wrong, to protect industries, but then to also expose them incrementally to international competition in order to sharpen their toolset and help them innovate. Lastly, the thing I want to dig in a bit more

• 22:06Demetri Kofinas?

  is the sort of complementary ecosystems that have grown up in China. So I'm really glad that you mentioned electric vehicles, because it seems to me, and again, please correct me if I'm wrong, that electric vehicles are the best example of nonlinear payback for the

• 22:21Demetri Kofinas?

  The development of complementary ecosystems, specifically the battery ecosystem, as a result of smartphone, high technology and high tech development in the smartphone sector, that ended up pouring into this other area where they just developed this whole giant industry in EVs out of seemingly out of nowhere, but only seemingly out of nowhere if you took a linear view of their development. And so my question is, to the extent that you agree with this, why have they been able to be so successful? And how should we consider the likelihood or possibility that they will continue to innovate in this kind of nonlinear fashion and that we're going to see more examples like this? And we're not going to really understand where they came from, but they

• 23:02Demetri Kofinas?

  came from the fact that there's a complementary flywheel of industrial ecosystem in China, and we've lost that in the US. And then the next question, of course, will be, well, what do we do about it?

• 23:13Speaker 01

  Yeah, maybe I'll start us off. It's a really trenchant question and a good framing. Right now, if you look at how China has emerged to lead areas like robotics, it does begin much earlier, right? There's been a complementarity between their ability to scale and achieve really dominance in the consumer electronics business that has been leveraged to achieve greater success in electric vehicles and drones and other places where electrification is a really important trend. And robotics is downstream of that. We know that some of the supply chains involved in building these cars are also useful in building humanoid robotics. And so it shouldn't be surprising to us, right? Look at the United States back in the day, back in its industrial ascent. You know, America began as a continent that had enormous natural resources, but not that many people. And so there was a

• 23:56Speaker 01

  huge return on investing in capital equipment that would be able to allow you to be more productive. And you saw the US benefiting and stealing British industrial technology, applying it to this continental scale and improving it gradually. And the communities that did that kind of work, you had machine shops all over the country, you had innovation coming from those shops, right? I think Alexander Graham Bell, when he invented the telephone, went to a machine shop. He didn't like figure it out himself. He went to a kind of more applied and practical place to create the first telephone. I guess what I'm saying is that there are these complementarities, these network effects that there's scale domestically is able to create. We saw it in America's industrial ascent. You couldn't become Country of Henry IV without having first been the country of Thomas Edison and before that, the country that was playing with advanced steam engines. So you look at China today, that's them, right?

• 24:40Speaker 01

  They're the ones playing with the advanced technology. You see these hilarious videos on Chinese social media of people putting drone technology in a sword so that you can throw it and it'll fly back to you. Crazy stuff like that. That is the kind of insane innovation from the floor that you saw characterize America's industrial ascent. Now, the question is, can you get it back when you've lost so much? Because once you've lost it, it takes so much time to build it. It might take decades to build. I'm a little more optimistic than others. I think there's a bit of defeatism that has set in here. Basically, America can never get there. The gap is too big. But if you ask yourself, if you were in China in 1978, before reforms kicked off the country's growth, and you said tomorrow, or in four decades, we want to be the world's dominant

• 25:23Speaker 01

  shipbuilder, the world's dominant carmaker, we want to invent the robots that you see in American science fiction, people would have thought, well, in four decades, that's not realistic, buddy. That's crazy. And yet, they got there in the span of essentially a generation and a half. And America's not starting from that position. It's starting as a technologically advanced country that is the world's second biggest manufacturer value add. So there's no reason why, with the breakthroughs in artificial intelligence, robotics, and other technologies, where labor might mean less in manufacturing than it did in the past, that we can't make up that ground.

• 25:52Speaker 02

  So first is that I think it would be fair to say that the leadership, the political leadership in China understood the importance of a national technology strategy much earlier than we did, that was all encompassing both R and D, manufacturing, and integration into other capacities. And so, when President Xi came to power in 2013, 2014, in a series of speeches, he laid out clearly his ambitions at a time that I'm afraid our strategic elite really was not as focused on how the ramparts of competition would be defined in technology more generally.

• 26:37Speaker 02

  A second thing I would say that I think that we experienced Very much to our detriment is that part of the reason that I think Rush and I wanted to write this piece is that there is a conventional wisdom that has settled over much of Washington and policymaking spheres that suggests that China has lost its ability, that it never had an ability really to innovate. It was busy copying, stealing, cheating in terms of how it made advances in a variety of technologies. Now, a certain degree of espionage is undeniable and we've seen it

• 27:18Speaker 02

  across every sector of Chinese technological purpose. But the truth is, there is also a remarkable innovative spirit and enterprise across China that is quite remarkable and we underestimate it to our peril. The last thing I would also say, I do not believe that this question of innovative spirit is lost in the United States. I think that in truth is, we have many pockets of absolute excellence in basic R and D in areas associated with Silicon Valley. You could go down the list where we still remain absolutely dominant.

• 28:01Speaker 02

  The key is ensuring that some of those areas of absolute dominant innovation spread. We don't see it as much in advanced manufacturing any longer. We don't see it in a number of areas where industrial pursuits are essential. But we do see it in certain issues associated with pharma. We've seen it in agriculture and the like. I think the key is, is just a strategic recognition that innovation, manufacturing capacity, national capacity in many of these key dominant areas

• 28:42Speaker 02

  is going to be essential to sustaining global position going forward.

• 28:47Demetri Kofinas?

  So before we get into the allied scale framework that you guys put forward, if the assumption is that the United States cannot go it alone, is the same true for China? In other words, does China need allies? And if not, why not?

• 29:02Speaker 02

  My own view is that China's determination to work more closely with Russia, North Korea, Iran, occasionally a few others, is not motivated by capacity building. It has more to do with global politics. It has to do with global positioning. I think in many respects, what Russia has provided back in exchange for substantial Chinese support for the brutal Russian invasion of Ukraine has been modest until quite recently.

• 29:42Speaker 02

  And it looks like Russia is finally now providing some cutting-edge military capabilities. But you could make the argument that some of these capabilities China would have been able to develop on its own. The size of the North Korean, Russian, and Iranian economies are so small that they don't make really much of an impact on their ability to do the kinds of things strategically, Dimitri, that we've talked about. It is clear that this grouping creates some capacity in financial interactions that are outside of the SWIFT framework.

• 30:24Speaker 02

  It is also clear that Iran's engagement provides, and Russia, China, with diversified energy supplies, which is important to the Chinese leadership. But all told, I think in truth, even though in some respects what China has demonstrated of late with its sort of axis of upheaval is in many ways a response to what we've done with the Quad and NATO and the like, I still would argue that our capacity building is deeper, much more important to our strategic purposes, and actually essential if we are to prevail.

• 31:02Demetri Kofinas?

  Yeah, so when we were talking earlier, one of the things that came to my mind was that during that period of great industrial strength in the United States in the late, really in the early 20th century, which was put to such good use in World War II. Good use, that's the wrong term. I just mean that it was, we were in such a good position to ramp up production heading into World War II. The same assembly lines that were used to manufacture cars were used to manufacture tanks. And so there was also, at that time, obviously, there's a different set of technologies at the time, but there were so many cross purposes and so much spillover. And I say that just to highlight that there are some interesting comparisons to draw between America in the early 20th century and China today.

• 31:46Demetri Kofinas?

  And yet, I think oftentimes, the historical context that's used to frame the US-China competition is USSR. First of all, do you agree with that? Do you agree that people typically reached for the competition between the United States and the Soviet Union throughout the post-World War II era? And do you think that we should be more focused on understanding what made America such a powerful industrial power in the early 20th century and to really internalize the fact that that is China today?

• 32:14Speaker 01

  Yeah, it's a great question, Dimitri. And I actually think that there was a period in American history, well, let me put it to you this way. For a long time, there were students, historians, economists, studying this period where America was a manufacturing ascendant power. If you go back and read, you know, books written in the 1950s and 60s, they talk about how America innovated on steam engines that they received from the British. There was this kind of fluency with our industrial past in the academy that I think is absent today. So you don't see as much historical work, for example, on the ascent of America as an industrial and technological state. And we became an industrial state before we became a Nobel Prize-winning innovative state in some ways. We were innovative on the factory floor, but we didn't lead in basic science until

• 32:56Speaker 01

  we imported from allied countries, essentially from Europe in particular, some of the best talent the world had to offer. And that's an important lesson for us today. But I think the other question you raise is about analogies, right? There's a great book called Analogies at War, which talks about the futility of some analogies being applied, the usefulness of other analogies being applied. Analogies, you know, they're never perfect fits. So the Cold War captures some aspects of the US-China competition, maybe the possibility of a conflict with nuclear escalation, but it doesn't capture the industrial competition as well. The Anglo-German rivalry between a rising Germany and an established UK as the industrial torch was passed from Sort of London to Berlin, that captures some of the elements of our economic competition

• 33:39Speaker 01

  with China, where there's competition over who's going to manufacture, who's going to rewire the systems under C cables and wireless telegraphy is sort of your 5G base station of the current era. There's competition over third country markets, there's negotiations over trade agreements. So in some ways, that historical analogy has purchased for us today. But I think you raised something very important. Americans need to go back and learn their history. We need to learn how it was that America became what it is. Part of taking your position for granted is refusing to interrogate how you got there. Now, let's turn to China. China is obsessed with its own history. Every college student has to take a course essentially on the party's approved version of Chinese history. And that basically tells you the story of the country's defeat in the Opium Wars, its century

• 34:22Speaker 01

  of humiliation, all the way to the present. And you were relentlessly focusing in Chinese education, you can look at textbooks, you can look at curricula that are assigned by the state, on the question of how China ended up basically falling from power, how it became a weakened state that was preyed upon by others, and how to make it stronger again. That is a nationalist question. It is a question at the central of China's political project for over a century. The very foundations of the Communist Party, when it was founded, were basically to revitalize the country, the same as their competitors, the nationalist party in China. And that has been a theme throughout much of their rise. So if I could sum up the historical question in one sentence, it's America does not interrogate how it became a great power, whereas China constantly interrogates how it became a weak country.

• 35:05Speaker 01

  And those different forms and frames of reference have implications for policy and for the elite consciousness needed to be able to carry out reform.

• 35:13Speaker 02

  I'll just add one thing, Dmitry, if I can. You know, I share your observation that there is a predisposition to focus on the Cold War between the United States and the Soviet Union as the best framing for how to think about the current competition between the United States and China. My own view is that that comparison obscures more than it illuminates. And you see It in so many ways, but the area where it's most prominently different is frankly around commercial pursuits.

• 35:55Speaker 02

  At the height of détente, the Soviet Union had an incredibly modest engagement with a few countries in the world and imported a very small amount of American wheat. We did a few things together in space, but the interdependence was extraordinarily modest. Today, you could make an argument that no two countries are as interdependent as the United States and China. We are uncomfortable, both of us deeply with that interdependence, but it is also the

• 36:32Speaker 02

  case that during the Cold War, you could draw a pretty clear line around us versus them. In Europe and elsewhere, you know which countries tended to be in the East Bloc and those that leaned towards the West. Increasingly, that line now runs through countries. You've got, you know, parts of governments that are inclined to think about, gee, we've got a good economic relationship, a commercial relationship with China, let's pursue those. And then you've got other parts of a government, ministries of defense and intelligence that are deeply anxious about it.

• 37:13Speaker 02

  And so this is not a clear, you know, kind of red line on a map. This is a much more subtle set of interactions globally in which many countries will tell you, look, don't make us choose, given the fact that so many of our commercial indicators point to Beijing frankly, rather than the United States.

• 37:36Speaker 01

  And that's why the Anglo-German rivalry is so interesting. I mean, that was a period like today, a profound interdependence between the two leading states, the UK and Germany. It was a period where countries around the world had their own interdependencies with the UK and Germany and where the economic interdependence that characterizes the present also ultimately was unable to stop strategic competition and even stop conflict, despite people predicting back then that as long as you had free trade, you couldn't really have conflict. That wasn't true then, and it probably isn't true now.

• 38:07Demetri Kofinas?

  Okay, so since we're on the topic of historical comparisons, what about the global security order? Again, to the extent that this is even a fruitful path to go down, right? But your colleague Graham Allison Kurt, you mentioned him earlier. One of the comparisons that he's made famous is the one between Athens and Sparta during the 5th century, the first few decades of the 5th century B.C. There's, of course, World War I. This is, I think, what Rush was alluding to, a period of multipolarity in Europe. What would you, I'm curious what each of you think. Is there a good analogy again? USSR, China, a period of intense bipolarity. What would be a good comparison, if there is one, do you think? For the security order specifically?

• 38:46Speaker 01

  It's a hard question, Dmitry, and that's in large part because it depends on how you assess the current moment. Are we approaching global multipolarity, as some say? Are we approaching global bipolarity, as others say? Or is the future potentially one with one super dominant state, potentially China, and others sort of lesser? The Chinese have a phrase for this. One superpower in many great powers. That could be another way the world could be organized. So we don't know where we're headed. And as a result, it's hard to find a good analogy for the current moment. And the truth is, if you look at the world since the Industrial Revolution, it's really been periods of passing hegemony punctuated by periods of either multipolarity or bipolarity. We just don't have a lot of places we can go back. So on the security side, right, I think it comes back to what Kurt and I've always been saying.

• 39:30Speaker 01

  What's unique about this period is American alliances. That is unique. That's actually what makes this era kind of distinctive. There's not really been a moment in history where an established power had this kind of approach to the world. You know, Great Britain, when it was declining, had an empire. And back then, some of its leaders said, hey, what you need to do is get all your colonies to pool resources with you, and then maybe you can achieve scale. But an empire is not a very good thing to rely on. You know, it's brittle and it's coercive. And alliances are much better because your allies and partners have their own approaches. They have their own autonomy, which allows them to be prosperous, but they can also work with you to achieve effect. So I guess what I would say, Dmitry, is I think this is a distinctive period. And because it's distinctive, it offers America unique asymmetric advantages.

• 40:13Speaker 01

  Yes, America has to renew itself, but again, if it can do it with others, it'll be way more effective.

• 40:18Speaker 02

  The only thing I would say is I think that the best examples about how to think about this period are actually found in our own recent history during periods in which there were substantial debates, external debates largely, about American decline and whether we were up for the challenge. And you've seen that over the course of decades. After dramatic success during the Second World War, it was only just a few years later that US forces were overrun on the Korean Peninsula, leading some to believe that we had lost our military technological advantages. Obviously, during the Vietnam War, a sense that, you

• 41:01Speaker 02

  know, American power had taken a major hit. During the Cold War, a view that, you know, neither the United States nor the Soviet Union won, that Japan was the winner in the early 1990s. And then after the global financial crisis in the 90s, and then again in 2007, different renderings of which countries emerged from this with global influence. I think the key here is not about the systemic elements, but really about self-diagnosis more than anything else. And one of the things that Sam Huntington has described is what makes

• 41:43Speaker 02

  the United States unique is our intense focus on our own status, constantly looking for signs of American decline and seeking to remedy those signs as well. I think we are in the midst of another one of those deep and powerful periods of internal reflection. I believe we can take some comfort on previous periods that through the lessons learned from them, we were able to drive forward our spirit of ingenuity and inventiveness and recreation is, I think, intact. And so the hope will be that that's the game plan

• 42:27Speaker 02

  for it. I don't see really- Any persuasive parallels internationally for the current period? I do believe that there are elements here that are so unique that they are different from the commercial competition with Japan in the 80s and 90s, from the largely military strategic competition with the Soviet Union during the Cold War and anything that we experienced in the interwar years. And so I think we can learn certain things from history, techniques, basically biases, some potential areas of policy approaches.

• 43:08Speaker 02

  But overall, I think, understanding the unique qualities of what we're experiencing right now is where I think both Rush and I believe that we need to begin really fundamental policymaking from.

• 43:21Demetri Kofinas?

  So a few more history-related questions before we get into that part of the discussion. Rush, you mentioned the British Empire. What challenges did Britain face in trying to create an allied approach? And what do you think the relevant lessons are for the United States that we can glean from those failures?

• 43:39Speaker 01

  Well, the biggest difference is Britain didn't really have allies as much as colonies. Sure, there were some other allies in Europe that it occasionally was able to pull into its grand strategy, but for the most part, Britain was an empire. It was not a consensual liberal system. It was a coercive one. And Britain, in fact, the imperialists of their age, like Lord Seeley, they actually didn't even understand the value of their empire properly. For example, India was a key part of the British Empire, but Lord Seeley did not really want to turn to India as a place to find scale. Instead, he said, we're going to focus on the white settler colonies of Canada and Australia and South Africa, New Zealand, and so on.

• 44:20Speaker 01

  And that particular approach was ill-fated, in part because the nature of empire is extractive more than it is a positive sum. And so the positive-sum character of the American order is what's unique. You know, we have a remarkably, have had a remarkably open economy. It's still in many ways quite open, even with the high tariff rate, relative to some of the other countries that we deal with, which have Very high non-tariff barriers that are almost impenetrable for us. We also have an open capital account. Money comes in and comes out. Foreign governments can talk to our government officials more easily than Americans can talk or other foreign governments can talk to Chinese officials, for example. We have an open press and open media. We have, generally speaking, a very stable financial position. I know I have to caveat a lot of these strengths because some of them are being tested. But those attributes make America somewhat unique.

• 45:04Speaker 01

  Some of them were shared by the British Empire, but not all of them. The second point is that the British, they also financialize themselves. Their industrial decline begins in the 19th century, late, mid to late 19th century, as, you know, others like the Germans and the Americans are able to outproduce them in steel. They're not even keeping up. They're so happy that they double steel production. Meanwhile, American steel production is five times what Great Britain's was. I mean, they're an island. So, an amazing first-mover advantage that they played to maximum benefit, but how do they stay in the game? And that's the difference, that there was no path for them. They couldn't find a way. But the US is different. And it's also different because its competitor is a country that many people have security anxieties about and economic anxieties about.

• 45:46Speaker 01

  It is Chinese manufacturing that is hollowing out even Japan and Korea and Europe, and it is China's security challenge that risks throwing the world into disorder and a Second Great Depression. So, if you look at the full American picture, we still have a remarkable hand to play. And the question really is, can we play it in common with our friends?

• 46:03Speaker 02

  If I, to meet you, the other feature that I think Rush referred to, but it bears a bit more focus. The truth is, the only other country that really had even a semblance of an allied capacity was Great Britain during, again, the 19th and early 20th century. But what was notable about that period is how often that collection of allies changed, given the strategic circumstances. When Britain was primarily a balancing country, it thought of how to best align various countries to maintain that balance. The difference with the United States has been, really, ever since the end of the Second

• 46:46Speaker 02

  World War, we have made sustained commitments to a number of countries in Europe, in Asia, built deeper and deeper partnerships with those countries over a period of decades.

• 47:00Speaker 02

  Building institutions, trust and capacity in a way that frankly is absolutely historically unique, can't be compared with the kinds of colonies that Britain, France, Belgium, other countries sustained during the colonial era. And so it is in fact, these allies and partners who themselves now are developing relations among themselves, not just with the dominant nation, the United States. What's most interesting in the current arena, given some of the anxieties that Rush described

• 47:40Speaker 02

  about the United States, is that every country is doubling down on building closer ties among the cohort of countries that would be thought of as like-minded allies of the United States. So that means that Japan and Australia are working as never before, India and Japan and South Korea, Canada, Great Britain, these countries are making common purpose in a way to try to stabilize in an environment where there is some uncertainty about the United States.

• 48:15Demetri Kofinas?

  So one more question before we move to the second hour. What do officials in the Trump administration who have heard this argument, whether from you or from other people or something like it, what do they say? What is their response in explaining why they've chosen to devote at least the early energy of the administration on erecting trade barriers and competing economically with some of their major trading partners and allies instead of with China?

• 48:41Speaker 01

  Well, this kind of brings us back to the New York Times piece, which is, a big part of it was talking about what a Trump approach looks like now and what it could look like in the future if changed. I think that the charitable argument, if I could construe the argument charitably, would basically be that the US needs to get more from its allies and partners than they've been willing to offer. In the security side, they weren't spending enough on their defense, whether in Asia or in Europe, but especially that's begun to change now. And then on the economic side, they were taking advantage of the American market, but they weren't necessarily keeping their market open for Americans. At the same time, they were involved in all kinds of dealings with China that allowed either transshipment of

• 49:24Speaker 01

  goods to America, or it meant that Chinese goods were now saturating their markets at the expense, potentially, of American or other allied goods. And so there was a sense that they were having their cake and eating it, too. That's the charitable control of their argument. And there's some truth to that argument, too, that maybe America had reasonable cause to ask more from its allies. And there was, as Kurt mentioned earlier, we had a persuasive approach in the Biden administration, which had some successes. But there's also some value occasionally in being a bit more tough to get what you need, or what, quite frankly, all of us collectively are going to need, which is a shared approach to dealing with China's security challenge and economic capacity. The theory of the case, Dmitry, is not we're trying to contain China. Some people caricature this argument. They say, oh, you're just trying to create new containment structures

• 50:07Speaker 01

  against China. It's crazy in multiple ways, that argument, because you can't contain something so powerful, so big. Because people making that argument forget about a very simple elemental international relations concept, which is the balance of power. What we're actually talking about now is the US working together with its allies and partners to create a stable, long-term equilibrium, a balance between the US and the free world, if you will, and China. Because China is so large and so successful as a modernizing country, so successful as an industrial technological country, that the world is now falling out of balance. And I think people who fixate on this argument that we've made as a last gasp of primacy, or as containment, just have not caught up. They have not fundamentally caught up to the changes that are happening in the world. They're living in a different

• 50:51Speaker 01

  era. They're living in an era of unbridled, uncontested, American hegemony. And it's just a different world now, and they need to wake up to it. And if they do wake up to it, they'll come to our conclusion, which is that alliances are the only path to Make American renewal really stick. But let me just add one other point, Dimitri, because on the historical question of Great Britain, it's worth stressing something different about the alliance structure of that era and what we have today. Back then, a lot of Britain's alliances were on the continent to balance the Prussians. There was the Triple Entente and so on. And they were very lucky. They eventually had an alliance with the United States, which was the country that was building immense scale. America doesn't have a bigger country it can go to that's an ally for immense scale. And unlike Britain, our alliances aren't just about security. They have an economic element to them, too.

• 51:36Speaker 01

  And so while Great Britain was focused on the balance of power entirely in military terms, we're focused on the balance of industrial capacity, the balance of technological capacity, and yes, the balance of military power, the balance of financial power. We're looking at power more multidimensionally, and that's what needs to happen in this period for the US to basically maintain some degree of balance against China on all metrics of power.

• 51:56Demetri Kofinas?

  Well, I appreciate you drawing out those additional historical distinctions, Rush. As I do your comments on alliance frameworks, which I want to dig into in much more detail in the second hour, specifically what this new allied approach would actually look like in terms of economic, technological, and military cooperation, and the practical steps that we would need to take in order to get there. I also want to try and make some counterarguments about whether we're exaggerating the threat that China poses and maybe underemphasizing the things that we need to do in order to get our own house in order, as well as some questions about Taiwan and the extent of

• 52:38Demetri Kofinas?

  bipartisan agreement on the nature of the problem and how to solve it. For anyone new to the program, Hidden Forces is listener-supported. We don't accept advertisers or commercial sponsors. The entire show is funded from top to bottom by listeners like you. If you want access to the second hour of today's conversation with Kurt and Rush, head over to hiddenforces.io/subscribe and sign up to one of our three content tiers. All subscribers gain access to our premium feed, which you can use to listen to the rest of today's conversation on your mobile device using your favorite podcast app, just like you're listening to this episode right now. Guys, stick around. We're going to move the second hour of our conversation onto the premium feed.

• 53:22Demetri Kofinas?

  If you want to listen in on the rest of today's conversation, head over to hiddenforces.io/subscribe and join our premium feed. If you want to join in on the conversation and become a member of the Hidden Forces Genius Community, you can also do that through our subscriber page. Today's episode was produced by me and edited by Stylianos Nicolaou. For more episodes, you can check out our website at hiddenforces.io. You can follow me on Twitter @Kofinas and you can email me at [email protected]. As always, thanks for listening. We'll see you next time.