The next decade will be crucial for China-U.S. relations, but no new strategic framework between the two sides has yet been established to guide them through this period, said former Australian Prime Minister Kevin Rudd via video link at a panel of the 9th World Peace Forum held in Beijing Saturday. 

Therefore, Rudd proposed the concept of "managed strategic competition," which is underpinned by three core propositions: establishing a clear understanding of each other's irreducible strategic red lines; engaging in competition where countries strive their utmost for superiority but also remain at peace; and finding room for continued strategic cooperation in defined areas where each side agrees that their interests would be enhanced by collaboration and undermined otherwise.

"The world at large has no desire to see them come to war — whether hot or cold," Rudd noted. "Certainly, the rest of the world, and not just Asia, would welcome a future where they are not forced to make the ultimate binary choice between Beijing and Washington."

The challenge regarding "managed strategic competition" is to reduce the competition risks to China and the U.S. by jointly crafting rules that will help prevent war. If both sides could agree on those rules, each would have to accept that the other will still try to maximize its advantages while stopping short of breaching the limits, according to Rudd.

The former prime minister also explained the benefits that such competition can bring to the two countries.

A framework of "managed strategic competition," which is able to manage down the tensions between China and the U.S., would enable Beijing to focus more on its economic vulnerabilities, Rudd said.

While for the U.S., an ability to contain the underlying security "red lines" in the relationship within reasonable, manageable and stable strategic warning lines would enable it to take care of the long-term fundamentals of its national power, such as the size of its economy and the continuing global status of the U.S. dollar, he said.

"The critical logic of managed strategic competition is to allow maximum competition across the full breadth of the foreign policy, economic and security relationship, while doing this within fixed political guardrails that minimize the risk of crisis, conflict and war," Rudd said.

"Therefore, for the terms of such a framework to be mutually acceptable and enforceable, each side would need to have some level of confidence that they could still effectively compete within it," he stressed. 

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