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I. Changes in China's Perception of International Order: The Decline of U.S. Hegemony and the U.S.-led International Order

Since the second half of 2025, Chinese academia has viewed the collapse of the existing international order, which has been led by the U.S. in the postwar era, as inevitable; consequently, discussions are already underway to prepare for a new international order.

China perceives that the primary cause triggering the collapse of the existing international order is the decline of U.S. hegemony. Assessments of U.S. national power across four dimensions—political influence, economic power, military power, and technological level—suggest that U.S. hegemony is structurally weakening from within (Zuo Xiying, 2025).

Analysts argue that the second Trump administration is attempting to curb the weakening of hegemony stemming from internal issues by imposing tariffs and offloading a greater share of defense costs and international responsibilities onto allies and partner countries. These moves by the U.S. are defined as a shift from "benevolent hegemony" to "predatory hegemony" (Zuo Xiying, 2025).

There are claims within Chinese academia that while the Trump administration's "predatory hegemonic" actions may delay the weakening of U.S. hegemony in the short term, they will not only fail to prevent its decline in the long term but may actually accelerate it. Consequently, the analysis suggests that the instability of the global system is accelerating as the existing order declines without a new international order being established.

Projections indicate that the second Trump administration is damaging a significant portion of the international order led by the U.S. since the Cold War, and that even if a U.S. Democratic administration comes to power after 2028, restoration would prove arduous. Beijing perceives that due to the Trump administration's isolationist and protectionist policies, the trust of major powers in the Trump administration has significantly weakened, making them far less willing to actively support or participate in the U.S.-led international order as they did before.

Amidst the once-in-a-century transformation of the international order, the prevailing opinion in China is that rather than engaging in direct confrontation and competition with the U.S., China should strengthen its position as a nation that safeguards world peace while protecting its core interests and establishing long-term strategic plans. China assesses that the rapid changes and increased uncertainty in the international order caused by U.S. "America First" policies present more opportunities than challenges.

China anticipates that the expansion of the U.S. sphere of influence based on systems and values, as well as the confrontation structure of the "New Cold War" that plagued China during the Biden administration, will not be replicated. Rather, China observes that spaces and opportunities are emerging for it to expand its standing and role in the international community, and believes it can thereby enhance its national interest.

Beijing signals a willingness to engage in pragmatic transactions and policy coordination with the Trump administration, excluding core interests such as the Taiwan issue. However, China remains vigilant, noting that although U.S. hegemony is declining, the U.S. still retains clear superiority over China in areas such as science, technology, and military power, while demonstrating the intent to exert control over China's development.

In an effort to reverse declining hegemony, China is concerned that the U.S. may concentrate its strategic resources from global expansion to core areas essential for maintaining hegemony and implement "targeted containment" against major strategic competitors. China remains wary that while the U.S. National Security Strategy (NSS) report released in December 2025 may outwardly appear to have softened its references to China compared to the past, in the overall context, the U.S. still harbors the intention to implement a more precise, pragmatic, and sustained "targeted containment" against China, its major strategic competitor (Wang Peng, 2025).

Driven by this shifting perception of the international order, the central diplomatic question for China in 2026 is whether it can successfully engineer a blueprint for a China-led multipolar order through a unique "major power diplomacy with Chinese characteristics" that differentiates itself from the U.S. Therefore, rather than targeting the U.S. directly to deepen confrontation and competition, China intends to concentrate its diplomatic power on Europe, ASEAN, the Global South, and multilateralism to continue pursuing the construction of a China-led multipolar order. Furthermore, China makes the strategic judgment that avoiding direct collision with the U.S. through such indirect methods represents a pragmatic strategic imperative for checking and responding to the U.S. in the long term.

II. Evolution of China’s Perception of Relations with the U.S. and Strategy

The proliferation of Chinese discourse regarding the decline of U.S. hegemony stems from the increased confidence it has gained in its relations with the U.S. since the second half of 2025. When President Trump's election was confirmed in 2024, China was deeply concerned about the launch of a second Trump administration due to experiences of intense conflict , such as trade friction, during Trump's first term.

In his first phone call with President-elect Trump in January 2025, President Xi Jinping, along with congratulatory remarks on the election, deliberately re-emphasized respect for China's core interests and major concerns. In particular, he requested that the U.S. handle the Taiwan issue carefully, as it is directly related to China's national sovereignty and territorial integrity (Ministry of Foreign Affairs of the People's Republic of China, 2025a).

In the first half of 2025, U.S.-China relations escalated into confrontation as the U.S. imposed “reciprocal tariffs” and strengthened export controls, prompting strong countermeasures from China. However, following a period of intense conflict and confrontation, the two countries shifted to a new phase of seeking compromise more rapidly than anticipated. Tariff negotiations between the U.S. and China were held five times starting in May, and a summit was finally held in Busan on October 30, 2025. At this meeting, the leaders of the two countries compromised by temporarily suspending tariffs and export controls and agreed to a one-year strategic truce.

China assesses that, drawing on experience gained while countering U.S. offensives and pressure since 2018, and on the enhancement of national power in economy, technology, and military strength, it responded firmly and resolutely to U.S. tariffs and export controls in 2025, achieving notable results. China highlights that among major powers, it was the only one to respond to U.S. trade pressure with retaliatory measures of an equivalent level, while not making any compromises. It is even evaluated that in September 2025, as a response to U.S. export restriction measures against China, China was able to control the Trump administration's offensive by leveraging rare earth export controls.

Since then, China views that the U.S. strategy of pressuring on China has entered a phase of diminishing returns. It is also argued that, while President Trump is pursuing the MAGA (Make America Great Again) agenda, China is being used as a tool rather than being a direct target. China claims that it has now acquired the experience, confidence, and strategy to effectively respond to and manage U.S. offensives. Furthermore, opinions are emerging that China should design and lead the future of U.S.-China relations and lead the scenario (Diao Daming, 2025).

Since the Trump administration started the trade war against China in its first term in 2018, China evaluates its own position as having accumulated about eight years of experience and is now able to negotiate with the U.S. on an equal footing. Interpretations have even emerged that, just as the situation of "Mutually Assured Destruction" between nuclear powers brought about the deterrence of nuclear use, a situation of so-called "Mutually Assured Disruption (确保相互干扰)" has emerged, wherein both nations have demonstrated the capacity to inflict critical damage on each other's economies and supply chains through China's powerful and efficient countermeasures. Based on this, China forecasts that trade conflicts with the U.S. are unlikely to expand significantly in the future.

China expects that while the pattern of repeated countermeasures and negotiations with the U.S. will most likely continue, the overall trajectory will proceed toward stabilization. China sees that through resilience, U.S.-China relations are improving, as it shifts from confrontation and conflict to compromise. It is uncertain whether the Trump administration will actually pivot toward compromise rather than checks and pressure, as per China's expectations and assessment. However, it is clear that optimistic arguments and discussions are gaining momentum within China, revealing heightened confidence in relations with the U.S. since the second half of 2025. Close scrutiny is required to determine how shifts in China's perception will translate into concrete policy and strategies through a series of processes, such as the consecutive summits held in 2026. Nevertheless, the message China intends to present seems clear: China signaling that it no longer intends to remain in a reactive and passive position in its relationship with the U.S., but to take active steps to preemptively guide the relationship toward stability on a more equal footing.

III. Creation of ‘Stable Coexistence Relations’ through Negotiation with the U.S. and Strategic Intent

i. Possibility of Compromise and Transaction toward U.S.-China ‘Stable Coexistence Relations’

China’s increased confidence in its relations with Washington is expanding into discussions on establishing a new paradigm for U.S.-China relations. Although the Busan summit in 2025 was a temporary truce, President Xi Jinping and President Trump sought to refrain from conflict and confrontation and seek compromise beyond expectations; as they promised summits through mutual visits in 2026, expectations for the possibility of compromise between the U.S. and China are higher than ever.

Subtle yet consequential shifts have been observed in the keywords China has recently been emphasizing in its U.S. strategy. China has always emphasized core interests and red lines at summits, making no secret of its wariness and suspicion of the U.S. For example, President Xi Jinping mentioned a red line during the virtual summit with President Biden in November 2021, stating, "If separatist forces claiming 'Taiwan independence' provoke or pressure us, or even cross the red line, we will have no choice but to take decisive measures." At the summit with President Biden in November 2023, President Xi Jinping also emphasized that while China consistently strives to build stable, healthy, and sustainable U.S.-China relations, China also has interests that must be protected, principles that must be upheld, and a bottom line that must be kept. Additionally, at the summit in Lima in November 2024, it was explicitly emphasized that "the Taiwan question, democracy and human rights, China’s path and system, and China’s development right are four red lines for China. They must not be challenged. These are the most important guardrails and safety nets for China-U.S. relations" (Ministry of Foreign Affairs of the People's Republic of China, 2024).

However, since the second half of 2025, while still maintaining a strong principled stance on the Taiwan issue, China has been more actively sending messages of compromise rather than wariness toward the U.S. by further emphasizing stability, mutual benefit, and cooperation. For instance, at the summit with President Trump in Busan on October 30, 2025, President Xi Jinping refrained from reiterating China’s red lines. At that time, while focusing on economic cooperation, he stated, "The business relationship should continue to serve as the anchor and driving force for China-U.S. relations, not a stumbling block or a point of friction." He added, "The two sides should think big and recognize the long-term benefit of cooperation, and must not fall into a vicious cycle of mutual retaliation" (Ministry of Foreign Affairs of the People's Republic of China, 2025b).

Furthermore, during a phone call with President Trump on November 24, 2025, President Xi Jinping re-emphasized cooperation, stating, "What has happened demonstrates yet again that the description of China-U.S. cooperation benefiting both sides and confrontation hurting both sides reflects a common sense that has been repeatedly proven by experience, and the vision of China and the U.S. helping each other succeed and prospering together is a tangible prospect within reach" (Ministry of Foreign Affairs of the People's Republic of China, 2025c).

The change in summit keywords aligns with the positive outlook on U.S.-China relations by Chinese researchers mentioned earlier. Such changes within China may be the result of actual objective analysis and judgment, but more clearly reaffirm China’s policy goal of actively negotiating with the U.S. on an equal footing and stabilizing U.S.-China relations through this. moreover, China is expressing its willingness to preemptively present new bilateral relations rather than remaining passive and reactive in U.S.-China relations.

In December 2025, Foreign Minister Wang Yi argued that a new paradigm is needed for relations with the U.S. in his speech at the annual "International Situation and China's Foreign Relations" seminar (Ministry of Foreign Affairs of the People's Republic of China, 2025d). He presents the direction of the new U.S.-China relationship envisioned by China, stating, "We will create a new paradigm of U.S.-China mutually beneficial interaction. And we will promote the sound, stable, and sustainable development of U.S.-China relations." China proposes a concept where a future situation will unfold in which China competes with independent strategies based on capabilities equal to the U.S., and accordingly, both countries can move toward peaceful coexistence by adjusting the intensity of their confrontation and competition while accepting mutual strategic changes (Da Wei, 2025).

For example, it is widely viewed that U.S.-China relations have changed into a relationship between two nationalist great powers for the first time in history. Analysts argue that President Trump's "Make America Great Again" and President Xi Jinping's "Great Rejuvenation of the Chinese Nation" both put forward nationalist goals, therefore do not necessarily conflict, allowing the U.S. and China at a minimum, to avoid obstructing each other. As several U.S.-China summits are expected in 2026, including Trump's visit to China in April, the APEC summit in November, and the G20 summit in December, China intends to seek reasonable coexistence measures suitable for the new era between the two countries.

Concrete measures to build a stable bilateral relationship that satisfies the realistic demands of both the U.S. and China are also being discussed. For example, Professor Wu Xinbo of Fudan University (2026) proposes a "Grand Bargain" between the U.S. and China. Professor Wu proposes starting negotiations in trade and economic areas where agreement is relatively easier given that a Grand Bargain is difficult to achieve. He suggests that this approach can help build mutual trust, which can then serve as a foundation for gradually expanding negotiations to more complex regional security and global issues.

For instance, one proposition considers a transaction where China increases imports from the U.S., such as soybeans, and investment in U.S. manufacturing, while the U.S. eases export controls and reduces regulations on Chinese private enterprises. In the field of science and technology, a second proposition considers a transaction where the U.S. eases regulations on technology inflow and outflow to China, as China correspondingly refrains from restricting exports of rare earths and critical minerals.

Based on agreements in the trade and economic fields, the proposal suggests expanding consultations to include risk management in more complex geopolitical arenas, such as the Korean Peninsula, the South China Sea, and the Taiwan issue. In particular, by framing the Taiwan issue as the most critical factor determining the future of U.S.-China relations, the proposal suggests that to prevent the expansion of conflict, the U.S. should demand restraint from Taiwan and exercise influence to prevent blatant actions of "independence," while China shows goodwill by reducing military activities around Taiwan.

In the global domain, it is considered necessary for both sides to have consultations to clarify their respective roles in the international order. China needs to clarify that it does not intend to completely overthrow the existing order led by the U.S., but to maintain overall stability while increasing the efficiency of some multilateral institutions and strengthening the representation of non-Western countries, while earning the trust of the U.S. and the international community.

Professor Wang Jisi proposes that there is a need to mutually exchange "strategic clarity" where the U.S. abandons regime change in China, and China does not challenge U.S. global leadership (Wang Jisi, 2026). Furthermore, Professor Wang presented the view that rather than continue to try and "improve" U.S.-China relations, the goal now should be pragmatic "coexistence" where each side clarifies its red lines and secures its own interests within them. Synthesizing recent internal discourse within China, including the suggestions of Foreign Minister Wang Yi, China intends to build a stable coexistence model between the U.S. and China through transactions and negotiations at a pragmatic level regarding mutual interests on an equal footing, amidst what it describes as a once-in-a-century translation in the international order.

ii. China’s Strategic Intent and Tasks

China's new proposal largely intends to capture the "America First" policy and transactional instincts pursued by President Trump and utilize them proactively. Nevertheless, there are significant constraints and limitations for actual compromise or transactions to be concluded.

First, due to the nature of its system, China fundamentally assumes the possibility of a Grand Bargain led by the two leaders, Xi Jinping and Trump. However, unlike China’s political system, the U.S. president faces term limits and institutional checks on authority, limiting his ability to unilaterally enforce agreements. Even if a transaction between Xi Jinping and Trump is concluded, this may not immediately guarantee the long-term stabilization of U.S.-China relations.

Second, trust is as critical to transactions as the exchange of equivalent interests. However, most mainstream politicians and high-ranking policy decision-makers in the U.S. persistently harbor deep distrust regarding transactions and negotiations with China. Therefore, they suspect that the recent discussions within China are highly likely to be "time-buying" measures to concentrate on creating the foundation for the so-called Modernization Power Roadmap that China is setting with a target year of 2035. Since strong distrust of the Chinese government and China's strategic intent widely exists in the U.S., it is highly likely to oppose transactions in the manner of a "Grand Bargain."

The fact that transaction and compromise plans are being actively presented through the government and academia in China can notably be seen as having the intention to stabilize relations with the Trump administration. However, considering that there is a high possibility that the compromise will not go according to China's expectations, it is plausible that alternative strategic calculations underlie China's proposals for negotiation.

First, behind China proposing negotiations for coexistence with the U.S., there is a likelihood that there is an intention to buy time through temporarily evading U.S. pressure and control while resolving the instability and uncertainty of the Trump administration period. China assumes that for President Trump, who faces domestic political headwinds due to issues such as excessive immigration enforcement ahead of the midterm elections, a temporary compromise through a transaction with China would be a choice worth considering. Similarly, from President Trump's perspective, if China proposes measures such as purchasing U.S. agricultural products like soybeans and energy (LNG), cooperating on blocking fentanyl precursors, expanding direct investment in U.S. manufacturing, and lifting export controls on rare earths, he may consider the transaction worth pursuing.

From China's perspective, 2026 marks the first year of the "15th Five-Year Plan," and a time when it must concentrate on domestic development more than ever. The smooth launch and ultimate success or failure of the 15th Five-Year Plan are very important variables for the stabilization of the Xi Jinping system and Xi Jinping's path to long-term rule. Therefore, the Xi Jinping leadership has a critical task not only to minimize confrontation and conflict with the Trump administration in order to concentrate internally on economic structural reform, revitalization, and technological self-reliance, but also to break through U.S. trade and technology controls. Thus, China may be contemplating a suboptimal strategy where even if it does not reach a Grand Bargain with the U.S., a "Small Deal" in the trade and economic fields is concluded to prolong the temporary truce.

Second, although China is proposing stable coexistence with the U.S., there is a possibility that the initiative is aimed less at Washington itself than at other countries in the international community. In other words, it may be an attempt to secure global leadership by filling the diplomatic vacuum created by the Trump administration's isolationism and "America First" policy with diplomatic rhetoric such as China's stability, certainty, and responsibility. In fact, China is actively approaching U.S. allies, partner countries, and the Global South, who are feeling fatigue due to the Trump administration's coercive and unpredictable policies by highlighting the continuity and predictability of China's own policies.

In this regard, Foreign Minister Wang Yi emphasized China's five major roles in the international community in his speech in December 2025. That is, he claims that in the turbulent world situation, China is playing the role of an "anchor of stability (稳定锚)," a " pillar (主心骨)" in the new environment in its neighborhood, a "defining force (定盘星)" for the changing international order, a "main engine (主引擎)" facing the global development predicament, and a "steadying force (压舱石)" in critical challenges to international justice. China intends to secure global leadership by actively expanding its role in the international community during the transition period of the international order, contrasting sharply with the Trump administration's isolationism. While continuing to propose stable coexistence with the U.S., China is simultaneously pursuing broad-based diplomacy in order to take advantage of the decline of U.S. hegemony and strengthen China's international influence and initiative. In fact, China is leading global governance reform to reinforce a multipolar order while strengthening substantive cooperation and solidarity with Europe, the Middle East, ASEAN, and Global South countries.

IV. Changes in China’s U.S. Strategy and Implications for Policy on the Korean Peninsula

China is actively expressing its desire to advance a new phase of so-called "Major Power Diplomacy with Chinese Characteristics" beginning in 2026. China emphasizes major power diplomacy due to the fact that the commencement of the 15th Five-Year Plan and securing stable coexistence relations with the U.S. are essentially its most important diplomatic tasks in 2026. And as mentioned earlier, the 15th Five-Year Plan and policy toward the U.S. are closely linked to each other; securing stable coexistence in relations with the U.S. is an important variable impacting the success of the 15th Five-Year Plan, as its success can be an important foundation for securing China's initiative in relations with Washington.

The construction of a community with a shared future with neighboring countries is included in the seven major diplomatic tasks for 2026 presented by Foreign Minister Wang Yi. However, neighborhood diplomacy also both shapes—and is shaped by—the implementation of the 15th Five-Year Plan and U.S. strategy; the Korean Peninsula is a strategically important priority within China’s neighborhood diplomacy. However, the strategic importance of the Korean Peninsula is very fluid, influenced by China's development strategy and policy toward the U.S.

The fact that two Korea-China summits were held consecutively within a two-month period clearly indicates that both governments have a strong will to restore relations. However, it is undeniable that external variables—such as Sino-Japanese conflict, the Korea-Japan summit, the U.S.-China summit, and the possibility of a North Korea-U.S. summit—have acted in a complex manner behind the unusually rapid and sudden convening of the summits early in the year. The instability and uncertainty of the international situation—including U.S.-China relations—may serve as an opportunity for the recovery of Korea-China relations, but conversely, they can also create a worst-case situation similar to the THAAD conflict in 2016.

Although the desire to restore relations was confirmed during the two summits, it was also reconfirmed that a situation of strategic divergence ("same bed, different dreams") still exists, with mutually different expectations and demands between the two countries. The U.S. and North Korean factors, which have been persistent impediments in bilateral relations throughout the 34-year-long Korea-China relations, resurfaced as divergent demands of the two countries at the critical juncture of restoring relations. The meetings further highlighted that while South Korea focuses on Korean Peninsula issues such as the North Korean problem as agenda items for the summit, China holds expectations for South Korea's strategic choices regarding U.S.-China strategic competition and the Taiwan issue.

Moreover, China is proposing transactional negotiations for coexistence with the U.S., even if such arrangements prove to be temporary. And in Professor Wu's Grand Bargain, the Korean Peninsula issue was also presented as an agenda item requiring sequential transactions between the two countries. Professor Wu suggests that for the Korean Peninsula issue, an attempt should be made to shift from deterrence policies to a peace mechanism jointly guaranteed by the U.S. and China, for example, through a method of situation management through the resumption of Four-Party Talks.

Recently, both the U.S. and China have not been prioritizing the North Korean nuclear issue. In fact, both countries have been avoiding even mentioning North Korea's denuclearization. Although it is currently a theoretical proposal, under the current trend, the possibility cannot be ruled out that the U.S. and China may leverage the Korean Peninsula issue as a bargaining chip in negotiations— without close consultation with South Korea—to enter a temporary truce.

The Lee Jae Myung administration is pursuing potentially conflicting diplomatic tasks of modernizing the ROK-U.S. alliance and fully restoring Korea-China relations under the banner of pragmatic diplomacy. At the same time, from the position of South Korea, which can never accept North Korea's possession of nuclear weapons, it must monitor and prepare for North Korea-U.S. dialogue. Additionally, South Korea must also prepare for the possibility of a sudden compromise between the U.S. and China, while developing appropriate response measures.

In 2026, the Lee Jae Myung administration's pragmatic diplomacy could face a significant test. As ROK-U.S., ROK-China, U.S.-China, and North Korea-U.S. relations are deeply interconnected, unpredictable situations may unfold, raising concerns that South Korea could be marginalized or placed at a disadvantage. Strategic deliberation and preparation for various scenarios have therefore become more important than ever.

In Korea-China relations, restoring ties is important. Yet, in order to prepare for unpredictable developments, various levels of strategic dialogue that have been suspended must be quickly restored to secure close communication channels between the two countries. Preemptive efforts are required to maintain continuous strategic dialogue between South Korea and China, allowing both sides to more clearly understand and grasp the maximum expectations and minimum red lines assumed by each other. Through such efforts, preventing and managing the sudden deterioration of the situation on the Korean Peninsula due to complex challenges resulting from external variables confronting both Korea and China should be the top priority for restoring relations.

References

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■ Dong Ryul LEE is a Senior Fellow at EAI, and Professor at Dongduk Women’s University.

■ Translated and edited by Inhwan OH, EAI Senior Research Fellow; Sangjun LEE, EAI Research Associate; Justin Chiyoon Chung, EAI Intern

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