US-China Rivalry Gets a 'Management' Makeover in Munich

$690 billion. That's the total trade volume between the US and China in 2023, making them each other's most important economic partner despite being strategic rivals. In Munich, their top diplomats just tried to square this circle.

The Munich Moment

At Europe's premier defense summit, US Secretary of State Marco Rubio and Chinese Foreign Minister Wang Yi delivered back-to-back speeches that sounded remarkably similar on the surface. Both talked about "carefully managing differences" and avoiding conflict between the superpowers.

But listen closer, and you hear two very different worldviews. Rubio emphasized alliance solidarity and called out China's "aggressive behavior" in the South China Sea and toward Taiwan. Wang Yi countered by criticizing America's "hegemonic approach" and demanding mutual respect.

The timing matters. This diplomatic dance comes as Donald Trump's second administration settles in, bringing uncertainty about whether his transactional approach might actually ease tensions—or make them worse.

What 'Managed Competition' Really Means

The phrase "managed competition" has become diplomatic code for something more complex than it sounds. It suggests both countries recognize they can't decouple entirely—their economies are too intertwined, their global challenges too interconnected.

But managing competition requires agreeing on the rules of engagement. Where do you compete, and where do you cooperate? Technology and defense are clearly competitive arenas. Climate change and pandemic preparedness might offer cooperation opportunities.

The problem? These domains increasingly overlap. Is Huawei's 5G technology just business, or a national security threat? Are electric vehicle subsidies economic policy or strategic competition? The lines blur constantly.

The Alliance Factor

Rubio's emphasis on alliance coordination reveals a key American strategy: multilateral pressure. Rather than going one-on-one with China, the US wants to leverage collective Western economic and military power.

This puts middle powers in an awkward position. European allies want to maintain profitable trade relationships with China while addressing legitimate security concerns. Asian partners face even starker choices between economic opportunity and security alignment.

China, meanwhile, tries to split these alliances by offering bilateral deals and arguing that US pressure forces unnecessary choices. Wang Yi's "mutual respect" language appeals to countries that prefer strategic autonomy over picking sides.

The Trump Variable

Trump's return adds unpredictability to this careful diplomatic choreography. His first term mixed aggressive trade wars with personal diplomacy toward Xi Jinping. His transactional style might create opportunities for deal-making—or escalate tensions if negotiations fail.

Early signals suggest continuity with Biden-era policies on technology restrictions and military competition, but potential flexibility on trade and economic issues. The question is whether China sees opportunity or threat in Trump's unpredictability.