I consider Kevin Rudd to be a source of great perspective on China. When I saw that he had made an appearance at the Harvard Kennedy School with Graham Allison I thought it worth a watch. I have read books on China by both men and reviewed those books right here. Have some of those perspectives changed? Yes I think so, but many of the fundamental issues remain with us. It was a fascinating conversation between two men who have written extensively on what may well be the most consequential strategic relationship of the twenty-first century.

I have previously reviewed books by both men, Allison’s Destined for War: Can America and China Escape Thucydides’s Trap? and Rudd’s The Avoidable War. I have also recently reviewed Patrick McGee’s Apple in China, a book that provides extraordinary insight into how China developed its formidable manufacturing capabilities, in no small part with the assistance of American corporations.

The Harvard discussion provides an opportunity to revisit the arguments made in those books and to consider how developments in the intervening years may have changed the strategic calculations of both countries. Some of my earlier conclusions remain sound, but the economic and technological dimensions of the competition have become even more important than I had previously considered.

Rudd is an especially valuable observer of China. In addition to serving as Australian Prime Minister, Foreign Minister, and Ambassador to the United States, he speaks fluent Mandarin, has studied Chinese history extensively, and has interacted directly with Xi Jinping over many years. His knowledge of Chinese political thinking gives his analysis considerable weight.

Allison brought us the concept of the Thucydides Trap, the proposition that the rise of a new power creates structural tensions with an established hegemon that can drive both toward war, even when neither necessarily desires such an outcome. His examination of sixteen historical cases, including the confrontation between Britain and Germany before World War I, demonstrates how fear, miscalculation, and conflicting national interests can produce catastrophic results.

Rudd’s The Avoidable War approaches the problem from a different direction, advocating what he calls “managed strategic competition,” a framework through which the United States and China could pursue their respective national interests while establishing diplomatic guardrails intended to prevent military conflict.

In my review of Rudd’s book, I expressed support for that approach, while questioning whether both countries, particularly China under Xi Jinping, would be willing to make the compromises necessary to sustain it. That question remains unanswered.

One of the most interesting elements of the Harvard discussion was Rudd’s examination of China’s industrial development and the extraordinary capabilities that China has accumulated.

In my review of Allison’s book, I noted the enormous economic growth that had transformed China into a major global power, and the willingness of Chinese leadership to use the resources of the state to make long-term investments in infrastructure, manufacturing, and technology.

Allison’s book contained some remarkable projections about the future size of the Chinese economy. Those projections have not materialized as anticipated, and China now faces substantial economic problems, including a troubled property sector, demographic challenges, and weak domestic demand.

But those difficulties have not prevented China from becoming an extraordinary manufacturing power.

Rudd described the increasingly ambitious industrial strategy undertaken by Xi Jinping, particularly through the Made in China 2025 program, designed to establish Chinese leadership across a broad range of advanced technologies. Rudd estimates that China already accounts for approximately one-third of global manufacturing output, and he believes that share could grow substantially by 2030.

The sheer scale of Chinese industrial development is sometimes difficult to comprehend.

In my earlier review of Allison’s book, I cited the remarkable statistic that China consumed more cement in the three years from 2011 through 2013 than the United States consumed during the entire twentieth century. That statistic, astonishing as it sounds, is true.

China used approximately 6.4 billion metric tons of cement during those three years, compared with approximately 4.4 billion tons consumed by the United States over the entire previous century.

The numbers have not become any less remarkable. According to the U.S. Geological Survey, China produced approximately 45% of the world’s cement in 2025. China also produces more than half of the world’s crude steel and has become the dominant commercial shipbuilding nation.

Electricity production provides another startling comparison. In 2025 China generated more than 10,500 terawatt-hours of electricity, approximately one-third of worldwide electricity generation and more than twice the amount produced by the United States. Since 2000, Chinese electricity production has increased almost eightfold.

These numbers tell us something important about the economic challenge confronting the United States. China has developed an industrial infrastructure of enormous scale, supported by investments in electricity generation, transportation, engineering, raw materials, and manufacturing capacity.

This is not simply a story about inexpensive Chinese labor.

My recent review of Patrick McGee’s Apple in China examined how American corporations contributed to the development of those capabilities. McGee shows how Apple transferred not simply manufacturing operations to China, but engineering expertise, technical knowledge, and the ability to manufacture increasingly complex products at enormous scale.

Apple’s demanding production standards, coupled with substantial investment and the training of Chinese suppliers, helped create an industrial ecosystem that has become extraordinarily difficult to replicate elsewhere.

The late Intel cofounder Andy Grove warned that moving manufacturing overseas would eventually undermine America’s ability to innovate. Grove understood that manufacturing and innovation were not entirely separate activities. Losing the ability to manufacture sophisticated products could eventually mean losing the capacity to develop the next generation of those products.

McGee’s book provides an important explanation for how the industrial capabilities described by Rudd came into being.

There is another side to these statistics. Some of China’s enormous cement and steel production supported an excessive property-development boom, and the resulting economic problems have been substantial. Industrial scale does not automatically translate into economic efficiency or prosperity. But neither should those difficulties obscure China’s enormous productive capabilities.

This brings us to an important question for American policymakers. Can the United States rebuild its manufacturing capabilities simply by imposing tariffs on Chinese imports?

I expressed considerable skepticism about that proposition in my review of McGee’s book, and Rudd’s discussion reinforces those concerns. Rebuilding American manufacturing requires much more than constructing new factories. It requires supplier networks, engineering expertise, skilled workers, reliable electricity, transportation infrastructure, and the ability to bring new technologies into mass production.

There is another dimension to this competition that deserves attention, and it involves the ability of the United States to actually build the infrastructure necessary to compete.

I recently wrote about California’s Proposition 45, an initiative intended to accelerate environmental review and permitting for certain categories of development. The proposal sought to address delays associated with the California Environmental Quality Act, commonly known as CEQA.

CEQA was enacted in 1970 with legitimate environmental objectives, but its review procedures and litigation provisions have also become a source of controversy over the time and expense associated with major development projects.

The broader issue goes well beyond California. If the United States intends to rebuild its manufacturing base, expand electricity generation, and develop advanced semiconductor facilities, the time and cost required to approve and construct those facilities become important elements of national economic policy.

There are legitimate differences between the American and Chinese systems. Environmental protections, private property rights, judicial review, and public participation reflect important American values. Those protections should not simply be discarded in pursuit of faster construction.

But there is a legitimate question about whether the current balance between those protections and the ability to build has become an impediment to American economic competitiveness.

The United States cannot simply impose tariffs on Chinese products and assume that the enormous industrial ecosystem developed in China over several decades will somehow reappear on American soil.

The Harvard discussion also turned to Taiwan, the issue that remains the most dangerous potential flash point between the two countries.

In my review of The Avoidable War, I questioned whether Xi Jinping would be willing to accept an indefinite postponement of the Taiwan question. The diplomatic ambiguity that emerged from the Shanghai Communiqué and subsequent American-Chinese agreements has helped preserve peace for decades. But Xi’s increasingly assertive foreign policy, and his emphasis on national reunification, raise legitimate questions about how long that ambiguity can be maintained.

Rudd has not abandoned his belief that war can be avoided. But his Harvard remarks placed unmistakable emphasis on the necessity of military deterrence.

His point was straightforward. Xi Jinping must continue to believe that military action against Taiwan carries risks that outweigh the potential benefits.

This is consistent with the concerns I raised in my original review. Diplomacy is essential, but diplomacy unsupported by credible military capabilities may not be sufficient. The United States, Taiwan, and regional allies, particularly Japan, must maintain military capabilities that make the use of force an unattractive option for Beijing.

Rudd added an important qualification, however, emphasizing that deterrence is mutual. China also seeks to deter actions by the United States or Taiwan that Beijing believes would unilaterally change Taiwan’s political status.

That observation does not require acceptance of China’s claims over Taiwan. It does require an understanding of how Chinese leaders define their national interests and the actions they might consider unacceptable.

The Harvard conversation also examined a development that has become substantially more important since the publication of the two books: artificial intelligence.

Rudd described the Chinese leadership’s determination to make AI a central element of its economic and technological strategy. The competition extends beyond commercial applications to the potential for AI to transform military capabilities, intelligence gathering, industrial production, and national power.

Autonomous AI systems could also increase the speed at which international crises develop, potentially leaving national leaders less time to assess threats and consider responses. This could increase the dangers of miscalculation identified by Allison.

Rudd’s proposed framework of managed strategic competition would seek to establish areas in which the United States and China could cooperate, even while remaining fierce competitors. Establishing limitations on dangerous applications of AI might be one such opportunity.

Another interesting part of the Harvard discussion concerned the response of other major economies to China’s industrial strategy. Rudd raised the possibility of closer economic cooperation among Europe, India, and the nations participating in the Trans-Pacific Partnership, potentially creating a counterweight to Chinese industrial dominance.

That raises a difficult question for American policymakers.

The United States has spent decades building an international economic and security system that helped establish and preserve its global leadership. Yet American trade policy has increasingly moved toward tariffs and restrictions, even as China has expanded its industrial reach.

There are legitimate arguments for protecting strategically important American industries and reducing dangerous dependencies on Chinese production. But the United States also needs to consider whether its trade policies strengthen or weaken the economic relationships necessary to compete effectively with China.

It is difficult to maintain global leadership without an economic strategy that extends beyond the American domestic market.

In looking back at my reviews of Allison and Rudd, I find that my central conclusions have not changed substantially. The rise of China presents an extraordinary challenge to American policymakers, and the danger of military conflict is real. The United States must maintain credible military capabilities, especially in the western Pacific, while pursuing diplomatic arrangements that reduce the possibility of misunderstanding and miscalculation.

But I would place greater emphasis today on the economic and technological dimensions of the competition.

China’s ability to mobilize industrial resources, develop advanced technologies, and establish dominant positions in critical supply chains may prove as consequential to the future balance of power as its expanding military capabilities.

The United States must also recognize that China’s strategic objectives are not necessarily identical to our own. Understanding those differences does not mean accepting Chinese demands, but it does mean recognizing that successful diplomacy requires a realistic appreciation of the interests and capabilities of both sides.

The historical examples presented by Allison remain instructive. Britain and Germany entered World War I amid competing ambitions, insecurity, miscalculation, and a diplomatic system that ultimately failed.

The challenge for the United States and China is to avoid repeating those mistakes.

Rudd’s continued advocacy of managed strategic competition offers one framework for doing so. Whether that framework can survive the increasingly intense economic, technological, and military competition between the two countries remains an open question.

The United States cannot dictate the future of China, nor can China simply impose its preferred international order on the United States and its allies. Both countries will have to recognize the limitations of their power while protecting their fundamental national interests.

As I wrote in my earlier review of Allison, clear-eyed and realistic actions by leaders in both countries, with a healthy respect for the core interests of the other, will be essential if war is to be avoided.

After examining the arguments presented at Harvard, I see little reason to abandon that conclusion. I do see considerable reason to believe that achieving it has become more complicated.

Kevin Rudd on Meeting the China Challenge