US-China Relations: History, Culture, and AI Competition, with Noah Smith, from Econ 102

Summary

• U.S.–China rivalry is not inevitable, but Washington no longer controls the relationship. Noah Smith argues the countries cooperated through most of the 20th century and remain culturally similar, yet similar powers “fight for niches.” His central historical call is that Xi Jinping defected first from engagement: America must stop imagining it “makes all the choices” when China is now “bigger than us in most of the important ways.”
• The concrete contest is over trade routes and strategic optionality, not whether the renminbi becomes the reserve currency. Noah says China seeks greater control over the seas and digital infrastructure through which physical and services trade move. The desired end state is not Chinese-speaking Americans but an America pushed toward the geopolitical periphery: “They want you to be Argentina to them.”
• Semiconductor controls are meant to preserve a military-technology edge, including by limiting China’s ability to mass-manufacture leading-edge chips for autonomous weapons. Nuclear weapons deter existential destruction, Noah argues, but cannot credibly answer smaller territorial moves; conventional power still determines whether the U.S. “gets a vote.” Advanced onboard compute could let precision drones defeat jamming and operate autonomously, partially offsetting China’s greater manufacturing capacity.
• The effective choke points are chipmaking equipment, software, and personnel—not trying to keep finished chips out of China. Noah expects restrictions on chip sales to fail and calls them largely “cosmetic,” because slightly off-frontier Nvidia parts may suffice. He believes machinery and talent restrictions are already slowing domestic fabrication, citing China’s costly, low-volume 7-nanometer effort, while conceding nobody knows how much that will matter in an autonomous-drone war that does not yet exist.
• DeepSeek does not persuade either speaker that China’s LLMs are the core security threat. Nathan places it roughly fourth or fifth globally; Noah sees LLMs as a “borderless, commoditized, universal thing” and says company- or country-level LLM supremacy probably will not work. Nathan reads an open model more as a “peace offering” than a threat. For investors, the distinction is between controls that may constrain leading-edge manufacturing and broadly diffusing model intelligence.
• The sharpest unresolved risk is that containment could accelerate the very conflict deterrence is supposed to prevent. Nathan argues that denying China Taiwan-made chips lowers one cost of attacking Taiwan, while proposed Western AI alliances could create a “do something sooner rather than later” incentive. Noah’s answer is deliberately limited—“my blog is called Noahpinion for a reason”—because he understands precision weapons better than AGI-to-military-superiority scenarios.
• Noah’s policy horizon is to buy roughly 10 years of stability, then repair the relationship. He calls the coming decade the peak-risk period, likens it to the 1950s, and expects bellicosity could diminish after Xi’s fourth term, when Xi will be about 80. The closing thesis is Cold War-style deterrence rather than appeasement or preventive war: “We’ll be friends with China again someday,” but unilateral weakening will not get there faster.

Deep dive

1. Historical partnership leaves room for rivalry without destiny

• Noah separates what should happen from the forces pushing events: the U.S. and China should not be rivals, and—with the Korean War as the major exception—were de facto allies for much of the 20th century. America helped China resist Japanese and European domination, later aligned with it against the Soviet Union, and supported its integration into the world economy. “There’s no reason we can’t be” partners again.

• The cultural comparison is intentionally irreverent: both societies celebrate getting rich without knowing exactly how, obsess over real estate, drive to malls, enjoy hip-hop, and can be “slightly racist.” China’s economy also resembles America’s a century ago—manufacturing-heavy, capacity-rich, and more often a fast follower than a basic-research pioneer.

• Similarity does not guarantee peace. Borrowing his sister’s phrase, Noah says people “fight for niches”: each large country imagines itself as the natural power in its region and increasingly occupies the same economic and strategic niche. America’s experiment with imperial reach in the Philippines becomes his analogy for China throwing its weight around over Taiwan and disputed territory near India.

2. Engagement lifted China, but Xi Jinping changed the bargain

• Noah rejects the retrospective consensus that engagement was simply a mistake. China liberalized materially under Jiang Zemin and Hu Jintao, enjoyed years of peace and prosperity, and ceased being broadly poor. “Poverty is the ultimate enemy of the human race,” he says; allowing roughly a billion people to improve their lives was not a policy failure merely because China later became powerful.

• His institutional critique begins with Deng Xiaoping’s suppression of the Tiananmen Square protests. By preserving leadership selection through “backroom power dealings,” Deng created a system likely eventually to elevate someone exceptionally skilled at internal power contests. Deng handpicked Jiang and Hu; once that succession plan expired, Xi outmaneuvered rivals including Bo Xilai and Zhou Yongkang and installed loyalists throughout the party.

• Drawing on Rush Doshi’s The Long Game, Noah identifies Xi’s slogan “great changes unseen in a century” as the clearest statement of a paradigm shift: the American-led order is temporary and China will replace America. Xi may not be the system’s most hawkish figure, but Noah argues he cemented this view into Communist Party doctrine.

• Crucially, the shift predates Trump, Biden, and U.S. export controls. Under Xi, China began trying to remove its dependence on U.S. economic inputs—chips, machinery, airplanes, and more. Trump brought his own trade-deficit anxiety, but Noah’s allocation of agency remains clear: “They’re leading the dance. They are in the driver’s seat.”

3. Control of trade lanes is the tangible prize

• Noah dismisses reserve-currency status as the central objective; he thinks the renminbi should already be a major reserve currency and says Beijing does not particularly want that role. The more consequential objective is control over the physical and digital lanes of commerce: oceans, internet cables, and the routes that carry digital trade.

• Under the U.S.-led system, American naval dominance backed freedom of navigation while largely U.S.-controlled internet infrastructure carried digital trade. That arrangement enabled unprecedented global growth and deliberately created mutual dependence, reflecting the postwar belief that countries bound together by commerce would be less likely to fight.

• Noah’s concern is that China seeks sovereign discretion over far larger maritime zones, especially the South China Sea—deciding which ships may pass rather than accepting open international waters. Because American prosperity depends on trade crossing those routes, losing access or influence would weaken both economic capacity and strategic choice.

4. Power means keeping choices while denying them to rivals

• Noah defines power as “option value”: not necessarily doing something, but retaining the ability to do it. A rich and unified America can constrain China; a distracted and weakened America cannot. He explicitly attributes this objective to Xi and his regime, not to ordinary Chinese citizens.

• The feared outcome is not cultural conversion. When Nathan says the threat still sounds marginal—his grandchildren will not be speaking Chinese—Noah answers that Beijing would prefer Americans not to matter at all: “You go fight your little battles over whatever parochial thing you fight over, and you don’t bother them.”

• Argentina supplies the metaphor for geopolitical irrelevance: occasionally useful as a supplier of raw minerals, but unable to shape American decisions. Nathan’s pushback is important—Argentina’s condition largely reflects generations of domestic mismanagement, and future American inflation or dysfunction could not simply be blamed on China. Noah nevertheless argues that becoming geopolitically irrelevant and losing international agency would constitute a real threat.

5. Internal division and “sharp power” form a second front

• Noah alleges that China benefits when Americans fight over pronouns, police defunding, AI safety, or the week’s cultural controversy. TikTok’s recommendation system and influence operations are part of the mechanism, but his broader category is “sharp power”: using economic leverage to shape what foreign companies, institutions, and public figures may say.

• His best example is pressure on the NBA over support for Hong Kong protesters. The same leverage, he warns, could favor partisan provocateurs while silencing figures asking Americans to unite around freedom of navigation, critical-mineral security, Taiwan, or resistance to territorial aggression.

• Nathan resists a clean moral asymmetry. He says China steals intellectual property and pressures private actors, but America also bullies weaker states—he cites threats against Colombia over a largely symbolic dispute. The resemblance reinforces Noah’s opening point: both powers use leverage, even if Noah judges Xi’s regime “a bit meaner than we are.”

6. Nuclear parity cannot substitute for conventional deterrence

• Noah’s military premise is that second-strike nuclear forces prevent existential conquest, provided neither side can neutralize weapons or detect and destroy ballistic-missile submarines. But nuclear arms are not credible tools for routine crisis management: “You won’t destroy the world over that little chunk of land” or a trade treaty.

• Conventional deterrence therefore determines whether the U.S. can protect allies without threatening apocalypse. China can manufacture “a bazillion missiles” and drones; America cannot erase that advantage technologically, but better weapons can partially offset it. Losing would also lose Washington’s vote over hypothetical Chinese moves against Japan, South Korea, or Indian territory.

• Precision weaponry is Noah’s model. Because blast pressure and radiant heat dissipate through inverse-cube and inverse-square relationships, accurate strikes can outperform much larger indiscriminate explosions. In Ukraine, he says American precision systems have remained effective even while Russia fires roughly eight times as many artillery shells, though jamming and concealment continually force adaptation.

• An FPV drone dependent on radio or GPS can be jammed; an autonomous drone with onboard computer vision can recognize a target and strike without maintaining that link. Once drones fight drones, chip quality becomes part of the arms race. Noah stresses the uncertainty: autonomous swarms exist in laboratories, not yet at battlefield scale.

7. Export controls target fabrication capacity, not DeepSeek

• The stated purpose, in Noah’s account, is not to prevent a model like DeepSeek. It is to stop China from mass-manufacturing the best chips, thereby helping preserve a technological edge in future precision weapons. Controls are only one component of deterrence and cannot compensate fully for America’s production deficit.

• He expects restrictions on finished-chip sales to fail: controls are porous, and slightly off-frontier Nvidia chips may perform nearly as well as prohibited parts. If designing policy himself, he would “keep selling them all possible chips” and concentrate on machinery, tools, software, and other genuine choke points.

• Personnel restrictions may be strongest of all. Preventing American citizens from working in China’s semiconductor sector disrupted talent flows because “talent is everything,” although Noah again rejects the fantasy of a perfectly sealed wall.

• Noah cites China’s 7-nanometer chip as evidence that equipment controls bite: it could be demonstrated but not produced in appreciable volume, with high costs, poor reliability, and continued TSMC dependence. He is less confident about the complex third-country rules released in the last days of the Biden administration, which seemed rushed and overreaching; earlier measures may have worked better than observers realized.

8. Taiwan and AGI expose the limits of the deterrence thesis

• Nathan’s core objection is that cutting China off from Taiwan’s best chips may lower the barrier to attacking the island. If China is no longer receiving the best stuff made there, attacking Taiwan could become easier—and could even become a reason to attack.

• He also challenges proposals from Scale AI’s Alexandr Wang and Anthropic’s Dario Amodei: build a huge alliance, exclude autocracies, race ahead in AI, then offer China access on Western terms. Nathan hears an “offer they can’t refuse” and worries that a short window of prospective Western dominance encourages China to act sooner.

• Noah’s answer is an honest non-answer: “The set of things upon which I do not have opinions is vastly larger than the set of things upon which I do.” A chain from AGI or superintelligence to better drones, cyberattacks, and hardened infrastructure does not sound impossible, but he cannot judge whether the advantage would be decisive or how briefly it would last.

9. DeepSeek weakens the case for durable LLM supremacy

• Nathan places DeepSeek around fourth or fifth globally—below the very best American companies—but not as a security threat. Noah says it suggests company- or country-level LLM supremacy “is probably not going to work.”

• His distinction is between general-purpose LLMs and onboard military compute. Computer vision for autonomous weapons offers a legible strategic mechanism; using an LLM as a voice interface—“Hey, robot, go kill the Russians”—may be useful but looks more like “icing on the cake.”

• Nathan calls DeepSeek’s open-source posture more like a “peace offering” than an attack and worries controls mainly withhold beneficial AI from Chinese citizens. Noah flatly predicts that exclusion will not happen: the Chinese public will have AI unless Xi blocks it, and “he mostly won’t.”

• A college story captures Noah’s uncertainty better than a forecast: fictional American and Chinese AGIs become stoner friends, avoid fighting, and trade romantic advice to their human minders for cooperation. Eric likewise calls AGI geopolitics beyond his pay grade; all three converge on bringing in specialists rather than manufacturing certainty.

10. Deterrence is supposed to buy time for reconciliation

• Nathan notes that one translated Xi speech denied any intention to export China’s political model and framed policy as resisting “containment”; it sounded mirror-imaged and domestically focused, not frightening. Noah counters with the “Wolf Warrior” diplomats installed around 2019–2020, whose rhetoric he recalls as openly triumphalist and belligerent.

• Noah also urges attention to conduct, alleging repeated penetration of critical infrastructure, interference with undersea cables, pressure in Philippine waters, and incremental territorial moves near India. He recommends Doshi precisely because The Long Game is dry and not alarmist.

• History supplies contradictory lessons: World War I counsels restraint; World War II warns that appeasement can strengthen a relentlessly expansionist adversary. Noah does not know which analogy fits modern China. His preferred third model is the Cold War, when deterrence prevented a direct great-power war despite Korea, Vietnam, nuclear scares, and many grave mistakes.

• The target is roughly 10 years of stability through what Noah calls the peak-risk period—“the 1950s again,” with America in the Soviet-like position because China has the manufacturing capacity while America is the side with the ideology it proselytizes. Xi will be around 80 after a fourth term, and Noah expects aggression might ease as it did after Stalin. The endgame remains friendship: “Unilaterally dropping deterrence and weakening all our deterrence methods is not the way to patch that up more quickly.”