The 1990s belief that economic liberalization would inevitably make China democratic provided ideological cover for policies that fueled its growth. This hubris, combined with corporate greed, allowed the US to facilitate the rise of its greatest geopolitical rival without achieving the expected political reforms.

By framing competition with China as an existential threat, tech leaders create urgency and justification for government intervention like subsidies or favorable trade policies. This transforms a commercial request for financial support into a matter of national security, making it more compelling for policymakers.

The US won World War II largely due to its unparalleled manufacturing capacity. Today, that strategic advantage has been ceded to China. In a potential conflict, the US would face an adversary that mirrors its own historical strength, creating a critical national security vulnerability.

The core driver of a 'Thucydides Trap' conflict is the psychological distress experienced by the ruling power. For the U.S., the challenge to its identity as '#1' creates a disorienting fear and paranoia, making it prone to miscalculation, independent of actual military or economic shifts.

Current anxiety surrounding China is largely confined to policy and financial circles, lacking the broad public and pop culture resonance that characterized the fear of Japan's economic rise in the 1980s, which permeated movies, media, and consumer attitudes.

Contrary to the narrative of a simple "tech race," the assessment is that China is already ahead in physical AI and supply chain capabilities. The expert warns that this gap is not only expected to last three to five years but may widen at an accelerating rate, posing a significant long-term competitive challenge for the U.S.

China operates as a high-agency "engineering state" that executes relentlessly on large-scale projects. In contrast, America's deliberative, litigious society often leads to endless delays and failures on major infrastructure goals like the California high-speed rail, highlighting a fundamental difference in state capacity and approach.

The US cannot win by simply matching China's manufacturing volume in areas like drones. Instead, its cultural strength as an "underdog comeback king" suggests a strategy of being clever and outthinking the enemy, rather than playing a "Me Too" game of mass versus mass.

The "Japan panic" was rooted in fears of economic subordination—like having a Japanese boss or seeing landmarks bought by Japanese firms. In contrast, anxiety about China is dominated by concerns over direct military conflict and a technological arms race, a much starker form of geopolitical rivalry.