China's economic rise was enabled by the post-WWII globalized structure the U.S. created. The U.S. Navy's protection of sea lanes gave China unprecedented coastal security and access to global markets, making its modern form possible. Without it, China would likely collapse.

Contrary to popular belief, China is poorly positioned to lead a new world order. Its entire economic model relies on the pillars of the old system: stable global supply chains, Western capital, and affordable Middle Eastern energy. A shift to a de-globalized, regionalized world breaks all three pillars, potentially stalling China's rise.

Post-Cold War globalization and its resulting just-in-time supply chains relied on the implicit security of maritime choke points, a role largely guaranteed by the US Navy. As regional conflicts rise and US commitment becomes uncertain, this foundational assumption of safe passage is collapsing, forcing a reassessment of global trade.

American military engagements abroad are a strategic boon for China. Each conflict distracts US resources and attention, effectively granting China a "free decade" of peace to continue its rapid economic and technological ascent without direct confrontation from its primary rival.

Ed Luttwak identifies a recurring historical pattern of self-sabotage. Imperial Germany challenged the British Royal Navy, which protected its global commerce. Today, China challenges the US Navy, which secures the sea lanes vital for Chinese trade. This is a recurring strategic error driven by a misplaced desire for military parity.

With its domestic, investment-led growth model broken, China has pivoted to an export-heavy strategy. This significant shift creates new vulnerabilities as it must fight for a shrinking pie of global demand amid rising protectionism.

Contrary to common perception, China holds the stronger hand in its relationship with the U.S. As the world's creditor and primary producer, China can sell its goods to billions of other global consumers. The U.S., as a debtor and consumer nation, is far more dependent on China than the other way around.

Despite political tensions, China's policy of managing its currency exchange rate compels it to intervene in markets, often buying hundreds of billions of dollars a month. This makes China an unintentional, yet massive, force reinforcing the US dollar's global role, not dismantling it.

Despite being rivals, the US and China are in weak economic positions where each nation is the only one that can meaningfully help the other. The US is the world's consumer, and China is the world's producer, creating a tense but necessary codependency for economic stability.