Uncertainty, Shifting Power and Credible Signals in US-China Relations: Why the "Thucydides Trap" Is Real, but Limited

Is conflict between a rising China and a declining United States inevitable? One of the main purported drivers of the Thucydides Trap is that declining states face intractable uncertainty about rising states' future intentions. Since a declining state cannot be sure how a rising state will use its power in the future, the decliner faces strong incentives to initiate preventive action, possibly war, to forestall the power shift, even if the rising state has behaved cooperatively to date. A common conclusion is therefore that preventive war is often unavoidable under large power shifts, even between states with truly compatible goals. Drawing on recently-published formal work, this paper argues that the uncertainty underpinning the Thucydides Trap is not as pervasive as conventional wisdom holds. Indeed, even under large power shifts, rising states' cooperative signals should be sufficiently credible that preventive war should not occur when the declining state is initially uncertain of the riser's intentions. Rather, preventive war should occur only if the declining state has high confidence that the riser's intentions are truly hostile. The analysis yields two main conclusions. First, China's cooperation has been sufficiently credible to avert preventive war, but not to avoid a substantial degree of competition with the US, which has rationally hedged against China's rising power. However, American observers have often misinterpreted the credibility of both cooperative and non-cooperative Chinese signals, and the current US government is far too confident that China harbors hostile intentions. This leaves open the possibility of a US-China war due to psychological misperceptions.