U.S.-China Economic Competitions and its Impact on the Global Economic order: A Study in Light of Thucydides Trap

Abstract

The rise of China as a global power has intensified strategic competition with the United States, raising concerns over the possibility of direct conflict, as the "Thucydides Trap" framework suggests that such dynamics often lead to tensions between a rising power and the established hegemon. This study aims to analyse the potential for conflict between China and the United States by assessing the economic, technological, and military dimensions of their competition, while exploring scenarios for cooperation and strategic stability. The research employs a qualitative approach, combining a literature review, analysis of policy documents, and case studies of key events in trade, technology, and security from 2018 to 2025. The findings indicate that while tensions are significant, direct military confrontation is not inevitable, and several scenarios may emerge, including managed competition, multipolar balance, and strategic cooperation in selected sectors, with economic and technological interdependence playing a crucial role in mitigating escalation risks. Policymakers can reduce the risk of escalation by prioritising strategic dialogue, enhancing mutual economic understanding, and implementing confidence-building measures, underscoring the importance of proactively managing Sino-American competition to maintain global stability