It isn’t clear what President Trump’s recent Florida meeting with Chinese leader Xi Jinping produced in the way of understandings between the two countries. Regardless of the summit outcome, however, the Trump administration must identify the challenges and opportunities posed by China’s growing power and decide on America’s objectives in, and overall strategy toward, the Middle Kingdom.   

This should begin with a review of China’s own objectives and strategy. After more than a century of weakness and humiliation and self-inflicted devastation under Mao’s Great Leap Forward and Cultural Revolution, China has had a remarkable resurgence. It has modernized its economy, fostered economic development and growth, and brought hundreds of millions of its people out of poverty. This growth has bolstered the Chinese Communist Party’s political standing and domestic power. But the Communist Party also has proved flexible in how it runs the country. It has relaxed its control over the population, opened the country to foreign influences, and reduced the government’s role in the economy by allowing the growth of the private sector (though government officials and their family members retain much of the ownership and enjoy extralegal benefits in a generally corrupt system). This economic development has created new centers of influence—economic entrepreneurs, intellectual leaders, even labor groups—while the Communist Party retains a monopoly on political power.  In the Chinese system, though, these new centers of influence may be largely within the existing power elite rather than outside it.

Now China, the world’s largest trading nation, is seeking to convert its economic relationships into political influence at the expense of the liberal international order established and defended by the United States since World War II. China is investing in new trade routes—the “One Belt, One Road” initiative—and has established a new international infrastructure bank rivaling the World Bank. It promises to invest $4 trillion in this global trading hub.

China has leveraged its economic power to invest in military capabilities, particularly in space and anti-space weapons, cyber capabilities, and ballistic missiles, along with related “anti-access/area denial” capabilities. It is building up its naval forces and gaining access to facilities in Asia and Africa. China wants to avoid the Soviet Union’s mistake of placing an unbearable burden on its economy due to too much military spending. But as its economy approaches that of the United States, it likely will also want a comparable military capability.

These developments bolster China’s self-confidence and its conviction that time is on its side. Beijing, peering long into the future, seems bent on establishing a Chinese-led international order.

So far China has focused its attention largely on gaining dominance over Southeast and Central Asia. In both regions China has competed mostly with the United States and has sought to minimize the U.S. role. The maritime territorial grabs in the South China Sea include the building of artificial islands and making claims unsupported by international law. It is investing in Central Asia to link Chinese infrastructure systems with those in the Middle East, starting with Iran.

But China’s future will be shaped by two central factors. One is U.S.-China relations. History tells us that when rising powers challenge dominant powers, the result often is war. A strong China likely will behave assertively, especially in its territorial ambitions, its claim on Taiwan, and its demand for deference from neighboring countries.

China does not want a conflict with the United States in the near term. The country understands the importance of America’s technological leadership, Chinese investments in the United States, the size of the U.S. market for Chinese exports, U.S. global influence, and U.S. military power. China remains conscious of its need to “catch up,” though the imperative for good relations with the United States is not without limitations and countervailing pressures.

The second key factor is Chinese internal developments. The growing gap between economic freedom and Communist Party rule could lead to greater political freedom and democratization. But it also could lead to an unstable, even fragmented China. Such a China could be inward-looking, but it also might embrace external aggressiveness to increase its legitimacy. It could take provocative action in Southeast Asia or against Taiwan, generating tensions in U.S.-Chinese relations that perhaps lead to conflict.

Increasingly hostile relations between the United States and China could emerge even without domestic instability in China. Chinese efforts to dominate Southeast and Northeast Asia would pose a global challenge to the United States. To achieve this goal, Beijing already is challenging the forward-basing of U.S. forces in East Asia and U.S. naval deployments to the Western Pacific. Chinese ballistic missiles can target the major U.S. military bases in the region, and its complex of anti-access/area denial technologies and weapons systems are designed to blunt U.S. power projection in the region.

Thus, the Trump challenge is to encourage a positive evolution in China’s relations with the world, appropriately respond to negative behavior in the short term, and protect the United States against any long-term prospect that China will embark on a hostile course.

Some in the Trump administration and Congress believe that opposing Chinese regional policies and preventing any further shift in the balance of power in China’s favor—often called “prevention plus containment”—should become the focus of U.S. strategy in Asia. Others believe we must expand economic and political cooperation with China and work toward a lasting partnership and mutual accommodation between the two countries.

Both strategies have serious limitations.

Engagement rests on the hope that continued economic, political, and military contacts will transform China into a more democratic and cooperative nation or at least bring convergence on some key mutual interests. In this view, although China’s current acquiescence in post-World War II international norms may be tentative and “opportunistic,” the leadership might gradually conclude that these norms serve China’s interests and hence opt for international integration. In other words, by the time China becomes strong enough to challenge the international order, it could already have become reconciled to it.

Engagement also keeps Chinese markets open to U.S. products, fosters cooperation in dealing with regional issues such as North Korea, and reduces the potential for misunderstandings.

But the record on engagement is mixed. And the risk is that U.S. engagement could help China develop economically and militarily, making it a potentially more threatening adversary.

The goal of a prevention-plus-containment policy would be to prevent an increase in China’s power relative to that of the United States. In this view, the United States would forge new, anti-China alliances and build up the militaries of Vietnam, Indonesia, India, and other potential Chinese rivals. Besides maintaining its military bases in Korea and Japan, the United States would work with allies and partners to defend what the Chinese call the “first island chain,” reaching from Japan through the South China Sea.

Critics suggest such a strategy assumes that China ultimately will become hostile, which sets up a self-fulfilling prophecy. In this view, our economic interdependence and China’s desire to maintain good relations with the United States render prevention plus containment unwarranted and premature.

In addition, prevention plus containment poses political challenges. First, it would be hard to obtain a domestic consensus to subordinate other policy goals (including trade) in order to mobilize national energies based on uncertain predictions. Second, containment would require full cooperation from regional allies and most of the world’s other advanced industrial countries, which could be difficult to obtain.

Since neither prevention plus containment nor engagement serves U.S. interests, we need a different strategy that could accomplish three things: (1) preserve the hope inherent in engagement; (2) deter China from becoming hostile; and (3) hedge against the possibility of China challenging U.S. interests. Such a strategy could be called “congagement”—a mix of containment and engagement. The United States would still seek to bring China into the current international system but would also prepare for a possible Chinese challenge.

Today this means that we should rebalance congagement away from engagement and toward containment. Washington should seek to convince the Chinese that a challenge to America’s Asian presence would be difficult and risky. We must convince the Chinese that any attempt to seek regional hegemony or supplant the liberal international order will fail.

This would require a strengthening of our overall economic and military power to maintain a favorable global position. Political interaction, military-to-military relations, and cultural ties with China should be maintained and even expanded. Military contacts provide the Chinese military with opportunities learn about the U.S. military—and hence curb tendencies toward military adventurism. Such contacts could also increase U.S. knowledge of the People’s Liberation Army.

On political and economic relations, the United States would insist on reciprocity. When China behaves badly or threatens our interests, we would respond. Trade relations would be rebalanced. Cooperation on regional issues such as North Korea and terrorism, where China has been uncooperative, would be enhanced.

Since there is potential for conflict with China over issues such as Taiwan and since Beijing might seek regional hegemony, as a hedge the United States should move on four fronts.

First, we should avoid doing anything that directly enhances Chinese military power in relation to U.S. power. Maintaining our technological lead is critical. We should discourage U.S. friends and allies from contributing to the growth of Chinese military capabilities. Existing U.S. and allied export controls on Western technology should be strengthened.

Second, we should help our allies and partners build up their military capabilities through weapons sales and training. India’s role is particularly important as a counterweight to Chinese power.

Third, the United States should seek to strengthen its own relative capabilities, including forward-deployed forces, to play the role of balancer and to deter possible Chinese aggression. Chinese officials believe America is weak on a number of fronts. This could induce them to go for a fait accompli on, for example, Taiwan by forcing the United States to risk major escalation and high casualties to reinstate the status quo ante. China needs to know that such an approach would be extremely risky and could lead to a major war.

Four, the United States should use access to American markets—on which the Chinese depend—as leverage to condition China’s behavior. Access should be constricted based on adversarial Chinese actions, and Chinese market access should be linked to its conduct. It makes no sense to enrich China through trade when that wealth could be used to undermine the international order and U.S. interests.

Dealing with such possible challenges from China requires a variety of steps. These include rebalancing trade with China and increased security cooperation and economic and trade relations with South and East Asian countries. Immediate steps should also include enhancing military-to-military relations between Japan and South Korea; encouraging increased political-military cooperation among the ASEAN states; resolving overlapping territorial claims among them; and enhancing military-to-military cooperation between the United States and the ASEAN states. The United States and its allies should take steps to prevent Chinese theft of technology.

But a new formal alliance, a central element of the containment approach, are neither necessary nor practical currently, though it would be prudent to take some preparatory steps to facilitate the formation of a new alliance or the establishment of new military bases should that become necessary. This action would signal to China the high cost of any move toward regional hegemony.

China must be disabused of the view that it can confront the world with a fait accompli in Taiwan. The United States needs expanded joint exercises with states in the region. Ensuring access to key facilities in countries such as the Philippines, pre-positioning stocks in the region, and increasing Taiwan’s ability to defend itself would also be prudent.

As long as there is a potential for Chinese hostility, it is not in America’s interest for Taiwan to unite with China. Whereas containment may require the United States to encourage Taiwan to declare independence, we would not do so under “congagement.” Assuming Taiwan continues its democratic transition, its people will not want to join an authoritarian China. On the other hand, the growing economic interdependence between China and Taiwan should discourage Taiwan from declaring independence and precipitating a crisis. If China were to become a friendly, democratic power, U.S. policy could become more favorable to reunification. The same is likely to be the case among most Taiwanese.

A “congagement” strategy sharpens the Chinese leadership’s fundamental choice—to pursue its interests within the current international system; or challenging that system. It emphasizes the costs of Chinese hostility by demonstrating the U.S. willingness to protect its interests.

The strategy requires flexibility, allowing for adjustments in the balance between engagement and containment depending on our assessment of Chinese capabilities, objectives, policies, and actions. Chinese cooperation on security and economic issues should cause us to put more emphasis on engagement. Conversely, inadequate cooperation on regional issues such as North Korea, aggressiveness in the South China Sea, or bellicosity on Taiwan should cause us to tilt toward increased containment. Once we decide on indicators for tilting one way or the other within the “congagement” framework, we should engage with allies and partners in crafting a broad agreement on when we would tilt policies and actions in the direction of containment or engagement based on Chinese behavior.

America tends to decide upfront whether a country is friend or foe. But China shouldn’t be categorized as either a strategic partner or an adversary at this point. The trends are worrisome. But “congagement” provides flexibility during this period of Chinese transition. If China pursues its interests within the current international system, this policy could evolve into mutual accommodation—a lot of engagement and very little containment. If China becomes a hostile power bent on regional domination, our posture can turn quickly toward containment over engagement.

Zalmay Khalilzad is the former U.S. permanent representative to the United Nations and deputy under secretary of defense for policy planning. He initially proposed a “congagement” strategy in 1999 as a scholar at the RAND Corporation.