HONG KONG — In an era marked by mounting tensions, trade wars, and geopolitical rivalry, the United States and China are tentatively exploring a novel approach to managing their increasingly complex relationship. Dubbed "Circles for Peace," this emerging framework represents a pragmatic attempt to prevent the world's two largest economies from sliding into outright conflict while acknowledging the deep structural differences that divide them.

The concept gained prominence at the sixth U.S.-China Hong Kong Forum held in November, where high-level diplomats, former officials, and policy experts gathered to discuss three interconnected domains: artificial intelligence governance, geopolitical stability, and people-to-people exchanges. These concentric circles, organizers argue, represent layers of engagement that could help build enduring peace even as competition intensifies across multiple fronts.

The forum brought together influential voices including Charlene Barshefsky, former U.S. Trade Representative and current chair of the National Committee on U.S.-China Relations; Wang Jisi, founding president of the Institute of International and Strategic Studies at Peking University; and Nirupama Rao, India's former foreign secretary and ambassador to both China and the United States. Their participation underscores the global stakes involved in managing U.S.-China relations, which increasingly affect not just the two countries but the entire international system.

The timing is critical. After years of deteriorating relations marked by tariffs, technology restrictions, military posturing over Taiwan, and accusations of cyber espionage, both Washington and Beijing face a strategic inflection point. The question is no longer whether the two powers will compete, but whether that competition can be managed peacefully or will spiral into open confrontation with catastrophic consequences for global stability and prosperity.

The Strategic Recalibration

Recent diplomatic exchanges suggest both sides recognize the dangers of unchecked rivalry. President Xi Jinping and President Donald Trump held a meeting in Busan that recalibrated the direction of the relationship, with Xi pointing out that China and the U.S. should be partners and friends, while Trump said China is the biggest partner of the U.S. and that together the two countries can get many great things done for the world.

This represents a notable shift from the confrontational rhetoric that has dominated U.S.-China discourse in recent years. The two leaders also agreed to encourage more people-to-people exchanges, acknowledging that official diplomatic channels alone cannot sustain a functional relationship between societies as large and interconnected as theirs.

Chinese Ambassador to the United States Xie Feng has been particularly vocal about the need for concrete action to implement the consensus reached by the two presidents. At the 2025 Kuliang Forum, he emphasized three core principles for moving forward: standing for peace to inject stability into the world, pursuing win-win cooperation to make partnership lists longer, and cultivating people-to-people exchanges to bring hearts closer together.

The ambassador's remarks drew on powerful historical parallels. This year marks the 80th anniversary of the end of World War II, when China and the United States fought fascism shoulder to shoulder, with more than 2,000 Flying Tigers pilots laying down their lives in Chinese skies, and some 250,000 Chinese soldiers and civilians killed by Japanese forces in retaliation for helping rescue the Doolittle Raiders.

That shared history of wartime cooperation stands in stark contrast to current tensions, yet it also demonstrates that the two countries can work together when facing common threats. The question now is whether 21st century challenges like climate change, pandemic disease, nuclear proliferation, and artificial intelligence governance can serve similar unifying purposes.

The Gray Zone Challenge

Yet even as diplomatic niceties are exchanged at forums and summits, the reality on the ground tells a more complicated story. Countries around the globe exist in a nether world between peace and war, a condition that comports comfortably with how China conceives of peace and war and operates in the world, with Taiwan serving as the primary example of Beijing's persistent campaign of harassment and aggression through gray-zone operations.

These gray-zone tactics involve military, economic, and psychological pressure that falls short of open warfare but creates constant tension and instability. China's increased military flights near Taiwan, its assertive territorial claims in the South China Sea, and its economic coercion against countries that displease Beijing all exemplify this approach.

The challenge for American policymakers is that the United States traditionally thinks of peace and war as binary conditions, while China operates along a spectrum where various forms of pressure and coercion are simply normal tools of statecraft. This conceptual gap makes it difficult to establish clear red lines or develop coherent responses to Chinese actions that are hostile but not quite acts of war.

The cyber domain presents similar challenges. The 2024 revelations about China's Volt Typhoon hacking group implanting malware in critical U.S. infrastructure, and the Salt Typhoon group's successful breaching of at least nine major U.S. telecommunications companies, have renewed concerns about Beijing's constant, ongoing efforts to hack Western entities.

Unlike past cyber espionage incidents focused on stealing information, these operations appear designed to position China to disrupt critical infrastructure like water and power systems in the event of a conflict. This represents a qualitatively different threat that blurs the line between peacetime intelligence gathering and preparation for war.

The Economic Equilibrium

Perhaps nowhere is the changing power dynamic more evident than in the economic sphere. Washington is losing its "escalation dominance" in economic competition, as China now has both the ability to absorb punishment from U.S. tariffs and sanctions and the strength to strike back, with China's choking off of rare earth magnet supplies bringing Trump back to the negotiating table after his tariff offensive.

This represents a fundamental shift in the bilateral relationship. For decades, the United States could leverage its larger economy, control of key technologies, and dominance of global financial systems to shape Chinese behavior. Those advantages are eroding as China achieves technological self-sufficiency in critical sectors and develops alternative economic partnerships through initiatives like the Belt and Road.

Chinese companies are no longer merely catching up but pulling ahead in key technologies. Huawei now competes directly with Apple using domestically produced chips. BYD outsells Tesla in major markets outside the United States. Chinese artificial intelligence startups like DeepSeek have developed alternatives to American AI systems. In batteries, advanced manufacturing, and other sectors, Chinese firms have achieved such dominance that some Western investors consider these spaces "uninvestable" for companies outside China.

This technological parity creates both dangers and opportunities. The danger is that competition could intensify as both sides feel they have the capability to prevail in a prolonged confrontation. The opportunity is that mutual vulnerability might encourage pragmatic cooperation, particularly in areas where neither side can afford to lose access to the other's capabilities or markets.

Trump has shown pragmatism by arranging a licensing deal to keep TikTok operating in the U.S., ignoring congressional mandates and national security concerns, with TikTok's Chinese owner retaining possession of the algorithm while American investors manage operations. This model of managed interdependence, where technology and investment flow across borders under negotiated terms, may become increasingly common as both sides recognize that complete decoupling would be economically devastating.

The Three Circles Framework

Against this backdrop of persistent tension and cautious engagement, the "Circles for Peace" concept offers a structured approach to managing complexity. Each circle addresses a different dimension of the relationship while acknowledging their interconnection.

The Artificial Intelligence Circle focuses on establishing guardrails for AI development and deployment. As both countries race to achieve AI supremacy, the risks of an unregulated competition are profound. Autonomous weapons, AI-powered surveillance, algorithmic bias, and the potential for AI systems to make decisions beyond human control all demand international cooperation. Yet cooperation is hindered by mutual suspicion, with each side fearing that sharing information or agreeing to constraints will disadvantage them in the AI race.

The forum discussions emphasized finding common ground on AI safety standards, transparency measures, and ethical guidelines that could reduce risks without requiring either side to abandon competitive advantages. This represents a delicate balance between cooperation and competition that will require sustained dialogue and incremental confidence-building measures.

The Geopolitical Circle addresses the hard security issues that most directly threaten peace. Taiwan remains the most dangerous flashpoint, but tensions also simmer over the South China Sea, North Korea, and China's expanding military presence globally. U.S.-China ties are at a historic low due to intensifying strategic competition, turning Taiwan into a potential flashpoint for military confrontation between the two great powers.

Managing these risks requires crisis communication mechanisms, military-to-military dialogues, and agreed procedures for de-escalation when incidents occur. The United States Institute of Peace has been convening peace games and tabletop exercises to improve decision-making during potential crises and help policymakers develop strategies to deter Beijing from military action while avoiding escalation spirals that could lead to war.

The geopolitical circle also encompasses broader questions of international order. China seeks a world where the United States and its allies no longer set global rules unilaterally. The United States resists what it sees as China's attempts to undermine democratic values and replace the liberal international order with one favoring authoritarian governance. Finding accommodation between these visions without either side feeling it has surrendered core principles represents perhaps the most difficult challenge of all.

The People-to-People Circle may ultimately prove most important for long-term stability. President Xi Jinping observed that the hope of the China-U.S. relationship lies in the people, its foundation is in societies, its future depends on youth, and its vitality comes from exchanges at subnational levels.

The Kuliang story exemplifies this principle. American families who lived in this Chinese mountain town generations ago maintained deep emotional connections to China throughout their lives, with some requesting their ashes be scattered there. Their descendants, known as the "Friends of Kuliang," continue traveling to China to retrace family histories, building personal bonds that transcend political tensions.

These human connections matter because they create constituencies for peace in both countries. When Americans and Chinese study together, do business together, form friendships and marriages, they develop stakes in preventing conflict that can influence political leaders and shape public opinion. During the Cold War, people-to-people exchanges between the United States and Soviet Union helped maintain dialogue even during the most dangerous periods. Similar exchanges between Americans and Chinese could provide ballast against the worst impulses of strategic competition.

Yet people-to-people ties face growing headwinds. Visa restrictions, security concerns, and political pressures have dramatically reduced student exchanges and academic cooperation. Chinese students in the United States face suspicion as potential spies or agents of influence. American researchers working with Chinese colleagues risk career damage or loss of security clearances. Both governments have restricted access to information and limited contacts between officials and citizens.

Reversing these trends requires political will at the highest levels. The commitment by Presidents Xi and Trump to encourage more exchanges represents a positive step, but implementation will require sustained effort and protection from domestic political backlash in both countries.

The Challenges Ahead

The "Circles for Peace" framework faces formidable obstacles. Domestic politics in both countries increasingly reward confrontational stances toward the other. In the United States, hostility toward China is one of the few remaining bipartisan positions, with politicians from both parties competing to appear tough on Beijing. In China, nationalism stoked by government propaganda creates public pressure against any perceived weakness toward the United States.

Economic interests that benefited from integration now face pressure to choose sides. Companies operating in both markets confront demands to demonstrate loyalty and comply with conflicting regulations. The technology sector faces particularly acute dilemmas, with both governments restricting the flow of products, services, and information across borders in the name of national security.

The intensifying U.S. presence in South Asia has complicated Chinese strategic choices, particularly regarding Pakistan, China's key strategic fulcrum in the region, where Chinese public opinion has turned negative over Pakistan allegedly delivering rare earth resources to the United States using Chinese equipment and technology.

This illustrates how third countries and regional dynamics can complicate bilateral management. China's Belt and Road Initiative, its expanding influence in Africa and Latin America, and its partnerships with Russia, Iran, and North Korea all create additional friction points with the United States and its allies.

Meanwhile, global challenges that require U.S.-China cooperation grow more urgent. Climate change accelerates despite inadequate international action. Pandemic risks remain high as disease surveillance systems prove inadequate. Nuclear proliferation continues as more countries seek weapons capabilities. None of these problems can be solved without cooperation between the world's two largest emitters, economies, and powers.

A Path Forward

As permanent members of the UN Security Council, the world's two largest economies and major nuclear-weapon states, China and the U.S. shoulder special and important responsibilities for world peace, stability and prosperity, requiring them to adhere to the bottom line of non-conflict and non-confrontation, stay committed to resolving differences through dialogue and consultation, and achieve peaceful coexistence.

This responsibility extends beyond bilateral relations to global leadership. A world divided into competing blocs led by Washington and Beijing would be less prosperous, less secure, and less capable of addressing shared challenges than one where the two powers find ways to cooperate despite their differences.

The "Circles for Peace" concept offers a framework, but frameworks alone cannot ensure peace. Success requires sustained commitment from political leaders willing to resist domestic pressure for confrontation, creative diplomacy that finds solutions to seemingly intractable problems, and patience to work through decades of accumulated grievances and suspicions.

It also requires realistic expectations. The United States and China will not become close allies or abandon their competing visions for global order. But they can develop mechanisms to manage competition peacefully, identify areas where cooperation serves mutual interests, and maintain human connections that preserve possibilities for better relations in the future.

The alternative to managed competition is not victory for one side but catastrophe for both and the world. In an age of nuclear weapons, economic interdependence, and shared environmental challenges, neither country can achieve security or prosperity by defeating the other. The sooner leaders in both capitals fully internalize this reality, the better the chances for building genuine peace through concentric circles of cooperation that expand gradually outward from limited initial agreements.

As the forum participants dispersed from Hong Kong to capitals worldwide, they carried with them both hope that dialogue can prevent disaster and anxiety that the window for peace may be closing. The next months and years will reveal whether the "Circles for Peace" concept represents a genuine breakthrough or merely another failed attempt to bridge an unbridgeable divide. The stakes could hardly be higher for both countries and the world they increasingly shape.