David Meale, former U.S. diplomat and current consultant, offered a cautiously optimistic perspective on U.S.-China relations at an APARC China Program seminar, arguing that despite significant tensions, there remains substantial room for what he calls “managed rivalry”—a relationship that is neither warm nor easy, but constructive enough for both countries to serve their populations and address global challenges. Drawing on his 33 years in the U.S. Foreign Service, he traced the evolution of U.S.-China relations over the past three decades and assessed current trajectories, bringing both diplomatic experience and fresh insights from private sector concerns to his analysis.

Three Decades of Evolving Relations
 

His entry into China-focused diplomacy came in 1995 when he was assigned to Hong Kong during the handover. During that era and through the early 2000s, U.S. policy operated under the assumption that China would gradually embrace the post-war rules-based international order shaped largely by the United States. The thinking was that China would develop a self-interest in preserving this order, becoming a constructive, if not easy, partner. This belief undergirded the strong U.S. effort to bring China into the World Trade Organization in 2001.

During his service as an Economic Officer in Taiwan in the 2000s, Meale witnessed the merging of talent from Asia and the United States that built China’s electronics manufacturing industry. Five percent of Taiwan’s workforce had moved to the mainland; there were even Shanghainese dialect programs on Taiwanese television at night for those dreaming of seeking their fortunes through cross-strait opportunities. Although there was tension with the Chen Shui-bian administration, there was a surprising amount of positivity in Taiwan about the mainland. That, of course, has now changed.

The Obama administration continued to work within the framework of bringing China into the existing international order, even as concerns grew. The approach aimed to convince China to preserve and, if necessary, shape this order, while using it to constrain China when necessary, as demonstrated by the attempt to resolve the South China Sea dispute involving the Philippines through the United Nations Convention on the Law of the Sea (UNCLOS).

The Trump administration marked a decisive shift. Meale noted that Trump openly discarded the goal of integrating China into the existing order, instead pursuing aggressive trade policies, technology restrictions, and explicit framing of China as a threat. The Chinese hoped the Biden administration would turn this around, but it instead maintained this posture, pursuing an “invest, align, compete” strategy—investing in the United States, aligning with allies, and defining the relationship as a competition.

Trump 2.0 brought “Liberation Day,” which Meale sees as the belief that the U.S. place in the world needs to be corrected; the United States is economically overextended, the trade imbalances and the associated debt cannot continue, and the supply chain vulnerability from COVID must be addressed. Tariffs were ratcheted up, and both sides imposed export controls. 

The Chinese hit back hard; Chinese officials are very proud of China’s pushback against an unchecked Trump. China’s economic growth is forecast at 5 percent this year, and the feeling from China is that it has shown the world the United States cannot push it around.

Looking ahead to 2026, Meale is optimistic. There will undoubtedly be crises that pop up: the Chinese will overreach on rare earth elements, and the United States will take an economic action that the Chinese did not plan on. Meale sees this as the “sine curve” of the U.S.-China relationship. There’s a crisis, tensions rise, there’s a response, and things eventually cool down. The curve goes up and down, but very little gets resolved.

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China's Current Challenges
 

China, Meale noted, effectively contains two economies: one serving approximately 400 million people who are producing world-class products with perhaps the world's best industrial ecosystem and impressive infrastructure, and another economy serving the rest of China's population, which has improved significantly over recent decades but relies heavily on informal work and the gig economy.
China faces deep structural problems, including a property sector crisis that has destroyed significant household wealth, an economy structured excessively around investment rather than consumption, youth unemployment reflecting a mismatch between graduating students and available jobs, and "involution" (neijuan, 内卷)—a race to the bottom in sectors where government incentives have driven overcapacity. China's reliance on export-led growth comes at a time when its overcapacity is increasingly unwelcome not just in developed countries but across the global South.

These challenges, Meale argues, will not result in a financial crisis or recession, but rather chronic headaches that will affect its foreign relations. Growth will continue, albeit at a slower pace, and the country will have significant work ahead to address inequality and structural imbalances.

On the question of Taiwan, Meale pushed back against predictions of imminent Chinese military action, particularly speculation about 2027 as a critical year tied to the 100th anniversary of the People's Liberation Army. He argued that, right now, one of China’s top goals is to avoid being drawn into a Taiwan conflict. China has recently purged nine senior military officials and is dealing with serious problems in its military. Five years from now, however, the situation could look quite different.

Defining End States and Finding Common Ground
 

Meale concluded by outlining what he believes each side seeks as an end state, arguing that these visions, while different, are not irreconcilable. Rather than global domination, he argued China seeks a world that works for what it calls "grand rejuvenation." This means overcoming the century of humiliation, reunifying with Taiwan, and living safely and securely on its own terms. China wants recognition as a global power, dominance in its near seas, freedom from technology containment, elimination of shipping chokepoints, access to markets, and the ability to pursue relationships with ideologically aligned countries.

The United States, meanwhile, accepts that competition with China is permanent but seeks a predictable China. U.S. goals include protecting advanced technology where it has an advantage, avoiding supply chain vulnerabilities, shaping Beijing's choices without attempting to control them, maintaining the Taiwan status quo until it evolves in a mutually and naturally agreed way, and ensuring fair trade to address what it sees as a stacked deck in current trade relationships. The United States also wants to prevent China from enabling adversaries, as seen in Chinese firms rebuilding Russia's military-industrial complex while maintaining nominal neutrality on Ukraine.

These end states, Meale acknowledged, collide in many ways but not in absolute ways. He sees substantial room for leader-driven, managed rivalry that can function constructively. This rivalry will not be easy or warm, but it can allow both countries to serve their populations while cooperating where global interests align.
 

Key Takeaways  
 

• The “integrated China” assumption is over. U.S. policy no longer aims to bring China into the existing international order, marking a fundamental shift from decades of engagement strategy.
• China's economy faces structural challenges, not a crisis. China will continue to grow, but must address inequality, overcapacity, and wealth destruction from the property crisis.
• Taiwan timing matters more to Beijing than deadlines. China seeks to control when and how the Taiwan issue is resolved, preferring not to be forced into premature action.
• Managed rivalry is possible. Despite significant tensions and incompatible elements of each side's goals, there remains space for constructive competition. While the relationship between the world's two largest economies will stay competitive and often contentious, it need not become catastrophic.
   

We are pleased to share that Jihui Seong (MA '25 East Asian Studies) is the recipient of the 14th annual Korea Program Prize for Writing in Korean Studies, for her thesis "A Truce Built on Tension: The Korean War Armistice Negotiations and the Strategic Divergence Between Allies."

Advisor Daniel Sneider, Lecturer in East Asian Studies, notes that "Ms. Seong carried out extensive archival research at the National Archives in Washington, as well as digital archives of U.S. diplomatic and other records. She did similar research in the archives of the Republic of Korea. Ms. Seong read deeply into the secondary literature on this period of history...and consulted the memoirs of key figures, including Korean language memoirs.... The result of this research was a remarkably well-written and insightful thesis, one which genuinely breaks ground in its detailed research, analytical framing and persuasive argument. The conclusion has additional power in taking the thesis research and applying its conclusions and lessons to current alliance relations."

Reflecting on her thesis, Seong notes: "My thesis explores the Korean War armistice negotiations (1951–1953), with a focus on the deep strategic and political divergences between the United States and the Republic of Korea. While the two nations were de facto allies under the UN Command, they held fundamentally different visions for Korea’s future. Drawing from extensive archival research—including diplomatic cables, negotiation transcripts, and U.S. policy documents—I analyze how President Syngman Rhee’s opposition to a ceasefire clashed with Washington’s desire to end the war through limited settlement, leading to recurring tensions, threats of alliance rupture, and backchannel bargaining. The paper highlights that these conflicts were not merely tactical disagreements, but expressions of diverging national priorities, domestic political constraints, and fundamentally different perceptions of sovereignty and security. Ultimately, I argue that the Korean War armistice was not simply the cessation of hostilities between adversaries, but rather a fragile truce built through uneasy compromise forged through internal struggle between wartime partners—one that shaped the foundations of today’s East Asian geopolitical order and the enduring complexities of U.S.–ROK alliance management."

Sponsored by the Korea Program and the Center for East Asian Studies, the writing prize recognizes and rewards outstanding examples of writing by Stanford students in an essay, term paper, or thesis produced during the current academic year in any discipline within the area of Korean studies, broadly defined. The competition is open to both undergraduate and graduate students.

Past Recipients:

13th Annual Prize Co-recipients (2024)
12th Annual Prize (2023)
11th Annual Prize (2022)
10th Annual Prize (2021)
9th Annual Prize (2020)
8th Annual Prize (2019)
7th Annual Prize (2018)
6th Annual Prize (2017)
5th Annual Prize (2016)
4th Annual Prize (2015)
3rd Annual Prize (2014)
2nd Annual Prize (2013)
1st Annual Prize (2012)

The "Meet Our Researchers" series showcases the incredible scholars at Stanford’s Center on Democracy, Development and the Rule of Law (CDDRL). Through engaging interviews conducted by our undergraduate research assistants, we explore the journeys, passions, and insights of CDDRL’s faculty and researchers.

What role do middle or “auxiliary” powers — like India, Brazil, or Turkey — play in this evolving landscape of great power competition?

This is one of the biggest differences between today and the Cold War. Back then, the system was much more binary. Today, the world is more fragmented. I think of it as a race: the U.S. is ahead, China is closing the gap, and everyone else is running behind. But they’re running. They have agency. They’re not just sitting on the sidelines.

Countries like India, South Africa, Turkey, and Brazil are swing states. They’re not going to line up neatly with Washington or Beijing. BRICS is a perfect example — democracies and autocracies working in the same grouping. The U.S. has to get used to living with that uncertainty. We need to engage, not withdraw.

And at the same time, while the U.S. seems to be retreating from some of its instruments of influence, China appears to be expanding. What worries you about this divergence?

It’s striking. We’re cutting back on USAID, pulling out of multilateral institutions, shutting down things like Voice of America, Radio Free Asia, Radio Free Europe, and cutting back on diplomats. Meanwhile, the Chinese are expanding their presence, their multilateral influence, their media footprint, and their diplomacy.

If the autocrats are organized, the democrats have to be organized too. We can’t just step back and assume things will turn out fine. That’s not how competition works.
 

During the Cold War, despite intense rivalry, the U.S. and USSR cooperated on nuclear nonproliferation and arms control. How do you see cooperation taking shape in today’s U.S.–China rivalry?

That’s a really important point. Cooperation in the Cold War wasn’t just about deterring the Soviets — it was also about working with them when we had overlapping interests. The Nuclear Nonproliferation Treaty of 1968 was a monumental achievement. It was signed at the height of the Vietnam War, while we were literally fighting proxy conflicts, and yet we found common ground on nuclear weapons.

I think something similar can and should happen now. Even if we’re competing with China, and even with Russia, there are areas where cooperation is in everyone’s interest: nuclear arms control, nonproliferation of dangerous technologies like AI and bioweapons, and climate change. These are existential issues. We cooperated with our adversaries in the past; we should be able to do it again.

One of the big debates in international relations is about the role of ideology. How much does ideology matter in this current geopolitical context?

It matters a lot. My book isn’t called Great Powers — it’s called Autocrats vs. Democrats for a reason. I believe ideas and regime type shape international politics.

Putinism and Xi Jinping Thought are exported differently. Putinism — illiberal nationalism — has ideological allies in Europe and here in the U.S. Xi’s model is more economically attractive to parts of the Global South. Power matters, of course, but it’s not the only thing.

You can see this clearly if you compare Obama and Trump. There was no big structural power shift between 2016 and 2017, but their worldviews were radically different. That’s evidence that ideas and individuals matter a great deal in shaping foreign policy.
 

You’ve warned about the dangers of U.S. retrenchment. Are there historical moments that you see as parallels to today?

I worry about a repeat of the 1930s. When Italy invaded Ethiopia, Americans said, “Where’s Ethiopia?” When Japan invaded China, they said, “Why do we care?” Then came 1939. Stalin and Hitler invaded Poland, and we still said, “That’s not our problem.” Eventually, it became our problem.

If we disengage now, we may find ourselves facing similar consequences. That’s part of why I wrote this book — to push back against the idea that retrenchment is safe. It’s not.

To close, what advice would you give to students who want to build careers like yours? And, could you recommend a book or two for young people entering this field?

Be more intentional than I was. Focus on what you want to do, not just what you want to be. Develop your ideas first, then go into government or academia to act on them. Don’t go into public service just for a title. I saw too many people in government who were there just to “be” something, without a clear agenda. The “to do” should come first; the “to be” comes later.

As for books, my own book, Autocrats vs. Democrats: China, Russia, America, and the New Global Disorder, is coming out soon — you can pre-order it. But the two books that shaped me the most when I was young are Crane Brinton’s The Anatomy of Revolution and Guillermo O’Donnell and Philippe Schmitter’s Transitions from Authoritarian Rule.

Local Governments Drive Most Industrial Policymaking

The data show that roughly 80 percent of industrial policies originate from local governments, including provinces, cities, and counties, while only about 13 percent come from the central government. This pattern highlights the importance of local initiative in shaping China’s industrial landscape.

Over time, however, the researchers find that central influence has grown, with greater policy coordination across different levels of government, especially since the early 2010s.

Policy Tools Evolve as Industries Mature

The study finds that China uses a wide range of tools to carry out its industrial policies, including fiscal subsidies, market access and regulation policies, support technology R&D and adoption, labor policy, and tax incentives, among others. 

The composition of these tools shifts systematically as industries develop.

• Emerging industries tend to receive entry-oriented support such as subsidies and land incentives.
• Mature-industry policies more often target R&D, labor and skills development, supply chain coordination, and consumer-side demand stimulation.

This evolution shows a clear pattern in how governments adjust policy instruments over time.

Imitation is Widespread — and Linked to Weaker Results

Many local governments replicate industrial policies from other regions, particularly from cities within the same province. This imitation contributes to policy duplication, inefficient competition, and industrial overcapacity when multiple localities pursue the same sectors or strategies.

Empirically, the study shows that “follower cities” — those that copy policy language or design from others and upper level governments without nuanced local adaptations — experience smaller gains in firm sales, profits, and productivity compared with cities that create original policies. The findings highlight how widespread imitation can dilute the effectiveness of local policy initiatives.

Different Tools Yield Different Firm Outcomes

By linking policy activity to firm-level data, researchers identify how industrial support affects businesses:

• Industries targeted with supportive policies are more likely to receive subsidies, higher tax deduction rates, and long-term loans.
• Fiscal and land subsidies are associated with higher rates of firm entry and investment.
• R&D support, cluster development, and equity investment show stronger correlations with productivity growth.

These findings highlight the diversity of policy instruments and their varied associations with firm performance.

A Comprehensive View of China’s Policy Landscape

Together, the results provide an unprecedented data-driven map of China’s industrial policymaking from 2000 to 2022.

The dataset—covering millions of documents and thousands of firms—offers a new empirical foundation for understanding how industrial policies are designed, implemented, and adapted over time.
 

Professor Hanming Fang is an applied microeconomist with broad theoretical and empirical interests focusing on public economics. His research integrates rigorous modeling with careful data analysis and has focused on the economic analysis of discrimination; insurance markets, particularly life insurance and health insurance; and health care, including Medicare. 

Hanming Fang is Norman C. Grosman Professor of Economics at the University of Pennsylvania. In early 2026, Professor Fang will join the Stanford Center on China’s Economy and Institutions as a Skyline Scholar. During his appointment he will participate in a rich spectrum of activities including expert talks and collaborative research efforts.