Analysts have often depicted the rivalry between the United States and China as a showdown between two nations with contrasting roles in the global economy. Historically, China has taken on the role of the producer, while the U.S. has been the consumer. However, both countries are now eager to adopt each other’s strengths in a bid to rebalance their economies. A crucial question raised in a Foreign Affairs analysis is whether the U.S. can make up for the production it has lost from China faster than China can fill the gap in consumption left by the U.S.
In their thought-provoking article titled “Underestimating China” in the May/June 2025 issue, Kurt Campbell and Rush Doshi contend that Washington needs to harness its alliances to achieve the scale necessary to win this competition. While putting together a U.S. team might help tackle scale issues, it won’t be sufficient to outpace China’s industrial capacity and manufacturing prowess. The U.S. must also engage in the challenging political work of securing raw materials, building infrastructure, and fostering domestic technology development. In simpler terms, just having scale isn’t enough to create a seamless supply chain that spans mining, manufacturing, and materials science.
The analysis suggests that if the U.S. aims to emulate China, it must not only match China’s scale but also learn how Beijing organizes and mobilizes its productive economy, especially regarding speed and industrial clustering. This could be viewed as an industrial policy tailored to American needs. The U.S. should streamline bureaucratic processes, like the lengthy reviews mandated by the National Environmental Policy Act, to allow companies to construct infrastructure swiftly, much like what happens in China. For example, in 2023, Shanghai’s municipal government and local state-owned enterprises set up an AI accelerator in just 38 days.
Additionally, the U.S. should focus on concentrating industries in specific regions to boost efficiency and cut costs. The experience of Hefei, China, which has emerged as a center for electric vehicle manufacturing, could serve as a valuable model for similar initiatives in the U.S.
