How the New Middle Ground Navigates Between China and the United States

As China and the United States continue their strategic rivalry without severing ties—maintaining a dynamic of competition and cooperation—many countries are trying to work with both powers simultaneously. This has given rise to a new “middle ground.” These nations are generally unwilling to take sides and instead seek different forms of engagement with both China and the U.S. across economic, security, and political domains. Economically, as China’s development accelerates, an increasing number of countries are voluntarily partnering with it—signing memoranda of understanding for Belt and Road cooperation, for instance. In contrast, economic cooperation with the U.S. is increasingly constrained by American unilateralism and protectionism. In terms of security, many of these countries still maintain alliances or partnerships with the United States. Despite China’s growing military power, it has relatively few countries with which it engages in deep security cooperation. Politically, these middle-ground countries also show varying degrees of alignment with China and the U.S. Many have established tiered partnerships with China, emphasizing mutual respect and equal consultation, while their political collaboration with the U.S. often centers on shared values, such as participation in so-called “alliances of democracies.

When some middle-ground countries maintain alliances or quasi-alliances with the United States while also seeking closer economic ties with China, it’s understandable that they would try to hedge between the two. What warrants further analysis, however, is why this new middle ground has emerged, and what factors and mechanisms drive different countries to make the choices they do.

The “New Middle Ground” Between China and the United States

Influenced by the traditions of geopolitical studies, past research on middle-ground regions typically focused on single areas adjacent to great powers—such as Eurasia or the Middle East. In contrast, the “new middle ground” refers to other states caught in the growing rivalry between China and the United States. Initially conceived with the U.S.–China competition in the Asia-Pacific in mind, the concept has since expanded as China’s national power continues to rise and the ramifications of U.S.–China relations now extend to virtually every corner of the globe. From the Asia-Pacific to Europe, from Africa to Latin America, many countries today must navigate how to position themselves between these two major powers. Thus, the “new middle ground” as used in this article is not limited to a specific geographic region. Unlike during the Cold War—when many small and medium-sized countries had little choice but to “choose sides” and fully align with either the U.S. or the Soviet Union for their economic, security, and political needs—today’s middle-ground countries are both more numerous and more capable of making flexible, strategic choices between China and the U.S. This shift is driven by three defining features of the current international system.

First, the relative stability of the international security structure provides the precondition for “new middle ground” countries to freely choose how to cooperate with major powers. Only when security competition between major powers is relatively subdued can middle-ground countries hedge effectively, seeking benefits from both sides. By contrast, the more intense the security competition between great powers—or the more directly one threatens the security of others—the greater the pressure on middle-ground states to take sides. The extreme of this scenario is outright military conflict, where it becomes impossible for middle-ground states to maintain cooperative relations with both warring powers. In such cases, the middle ground itself collapses. At present, China and the United States remain at peace. Apart from a few sensitive security-related issues, both powers generally tolerate middle-ground countries making flexible cooperation choices in most areas.

Second, in the current international economic system, China surpasses the United States in both its capacity and willingness to provide global public goods. A major power’s ability and inclination to offer external economic opportunities is typically measured by indicators such as trade, foreign investment, and overseas infrastructure development—all areas in which China ranks first globally. Though still the world’s largest developing country, China has, through the Belt and Road Initiative, promoted mutually beneficial development with participating nations. In contrast, the U.S. has pursued an “America First” foreign economic agenda, leaning toward protectionism and unilateralism, which makes it more difficult for other countries to reap economic benefits from engagement with the U.S. Given that economic cooperation is non-exclusive, even countries already closely tied to the United States economically are eager to pursue further development opportunities through engagement with China.

Third, the existing international normative order remains dominated by the United States and Western countries, and many “new middle ground” states are more closely aligned with the U.S. in terms of political values and norms. Alliances are not just military in nature; they also involve political alignment. As such, similarities in political systems and ideologies—as well as the tone of historical memory—play a role in how middle-ground countries choose their partners for security and political cooperation. As the victor of the Cold War, the United States has since promoted its political model and ideology to many parts of the world. It also benefits from its relatively short history and limited number of neighboring countries, resulting in fewer historical grievances with others. Many states welcome U.S. involvement in regional affairs. In contrast, China’s socialist system with Chinese characteristics is often misrepresented or maligned within Western discourse. Moreover, due to various historical issues, some neighboring countries remain wary of China, which undermines mutual trust and hampers the potential for deeper cooperation.

Three Strategic Choices Under the Influence of Party Politics

Even though the current international system permits flexible positioning, not all middle-ground countries adopt a strategy of hedging between China and the United States. Some still choose to align with the U.S. or lean more toward China. A single country may also shift its approach in the short or medium term. To understand this variation and change, it is necessary to take into account the domestic dynamics of party politics.

First, political parties possess specific ideologies and foreign policy preferences, which can shape a country’s external policy through governance, parliamentary activity, elections, referendums, and party-to-party diplomacy. Second, the differing ideological orientations and economic priorities of ruling parties influence how a country ranks the importance of economic partners versus “values-based alliances.” Countries governed stably by mainstream establishment parties tend to place greater emphasis on ideology and shared Western values, often prioritizing alliance relationships over economic interests. In contrast, populist (or “people-centric”) parties generally adopt a more pragmatic approach to cooperation with China and are less constrained by ideological considerations. Some parties that reject Western values may even prefer cooperation with China over the United States. Third, party alternation and domestic political polarization in some countries have led to erratic foreign policy shifts, resulting in a kind of dynamic balance between pro-China and pro-U.S. orientations. Conversely, countries with stronger inter-party consensus or little party turnover tend to maintain more “stable and exclusive” relationships with major powers. Under the influence of party politics, middle-ground countries’ choices between China and the United States can be categorized into three ideal types: “Hedging Both Sides,” siding with the U.S., or leaning toward China. Naturally, transitional or hybrid cases also exist between these ideal types in practice.

(1) The “Hedging Both Sides” Model

Typical “hedging” countries maintain bilateral alliance treaties with the United States or are members of U.S.-led frameworks like NATO, participating in joint military exercises, arms sales, or hosting U.S. troops on their soil. At the same time, they actively engage in Chinese-led international economic initiatives—such as signing Belt and Road cooperation memoranda of understanding (MOUs) despite pressure from Washington. In Asia, South Korea, the Philippines, and Thailand exemplify this model. These countries regard China as their largest economic partner, while maintaining high-level security cooperation with the United States, earning the designation of “Major Non-NATO Ally.”

Take South Korea, for example. China is firmly South Korea’s largest trading partner, export destination, and import source. South Korea has actively sought to align its “Eurasia Initiative” with the Belt and Road Initiative. However, ideological and identity-based reservations toward China limit deeper political and security cooperation. In contrast, South Korea is bound by the U.S.–ROK Mutual Defense Treaty and is heavily influenced by U.S. ideology and soft power. The conservative parties in South Korea, particularly under the staunchly anti-communist Yoon Suk-yeol administration, have strengthened trilateral cooperation with the U.S. and Japan—even at the expense of economic ties with China, as seen during the THAAD missile defense deployment. Progressive parties in South Korea, though sometimes labeled “populist” by conservatives, have taken a more independent foreign policy stance; for example, during Moon Jae-in’s presidency, South Korea declined to join the U.S.-led Quadrilateral Security Dialogue targeting China. At the time, Foreign Minister Kang Kyung-wha noted that aligning with one specific country did not serve Korea’s national interests—stating that while the U.S. alliance was the “anchor” of South Korea’s security, China was its largest trade partner.

The Philippines similarly maintains both the U.S.–Philippines Mutual Defense Treaty and the Visiting Forces Agreement with the U.S., while also signing a Belt and Road MOU with China. Its shifts between pro-China and pro-U.S. policies are closely tied to domestic party turnover. Under the liberal, pro-U.S. Liberal Party, the Philippines pursued the South China Sea arbitration case, straining relations with Beijing. A dramatic pivot occurred under President Duterte, whose administration temporarily suspended the Visiting Forces Agreement in protest against U.S. human rights criticism of his anti-drug campaign. Duterte also downplayed the South China Sea dispute and strengthened economic cooperation with China. His party, PDP–Laban, is viewed as a left-leaning populist party that advocates for public healthcare and free education.

Thailand is another key Belt and Road partner. It signed multiple bilateral cooperation agreements with China in 2017, including on rail infrastructure. A U.S. ally since joining the Southeast Asia Treaty Organization in 1954, Thailand reaffirmed its defense partnership with the U.S. in a 2012 joint vision statement. However, after the 2014 military coup, which ended years of political instability and street protests, the U.S. criticized the new Prayut government on value-based grounds, cooling bilateral relations. In the 2019 elections, the pro-military Palang Pracharath Party won the most seats and nominated Prayut to continue as prime minister. Scholars note the party has a populist character, promoting welfare policies such as debt relief, low-cost housing, birth subsidies, and minimum wage hikes—initiatives that benefit from Chinese economic cooperation.

In Europe, countries like Italy, Greece, and Hungary also follow a hedging approach. As NATO and EU members, they have nonetheless signed Belt and Road MOUs with China, provoking dissatisfaction in Washington and Brussels. Notably, all three countries joined the BRI under so-called “populist” governments.

Italy is the first and so far only G7 nation to sign a Belt and Road MOU with China, doing so in 2019 under the leadership of the Five Star Movement. Widely regarded as a populist party, its rise was seen as a challenge to liberal democratic norms. In the early stages of the COVID-19 pandemic, Foreign Minister Luigi Di Maio emphasized the importance of cooperating with China, calling it a key outcome of BRI engagement. However, Italy’s party politics are highly fluid. With the return of the mainstream Democratic Party and technocratic prime minister Mario Draghi, Italy reaffirmed its Western alignment. Sino-Italian relations cooled, and official rhetoric around the BRI all but disappeared.

Some European left-wing populist parties even have roots in communist ideology—such as Greece’s Coalition of the Radical Left (SYRIZA). Facing a debt crisis and in urgent need of external support, Greece saw Chinese economic engagement as vital. Under SYRIZA, relations with the EU—especially Germany—were tense over austerity demands. China stepped in with investment, most prominently in the Port of Piraeus. In 2017, Greece also blocked an EU statement at the UN Human Rights Council criticizing China’s human rights record. These parties often deviate from Western liberal norms and prioritize tangible national economic interests over values-based diplomacy.

Hungary presents a similar case. The ruling Fidesz party, in power since 2010, is a right-wing populist party. Under Viktor Orbán’s leadership, Hungary’s relations with the EU have frayed over issues like the rule of law, minority rights, and the Ukraine conflict. In 2022, the European Parliament even declared Hungary no longer a “full democracy.” Within this context, Hungary cannot rely solely on the EU and the West for economic support. The Orbán government has pursued an “Eastern Opening” strategy, seeking closer economic ties with China, such as through the construction of the Hungary–Serbia railway. Hungary has also backed China on sensitive issues like Hong Kong and Xinjiang, blocking EU condemnations.

(2) The U.S.-Aligned Model

The second type of country is also a U.S. security ally and maintains deep economic ties with China, yet follows Washington’s lead in balancing against Beijing or leans toward the United States in its diplomacy. Countries that decisively choose sides in the China–U.S. rivalry are mainly found in the Asia-Pacific, with Japan and Australia being the most representative cases. Both are governed by long-dominant mainstream establishment parties whose foreign policy aligns with their entrenched ideological orientation—treating the U.S. as a natural ally and viewing Communist-led China as a security threat.

In Japan, the conservative Liberal Democratic Party (LDP) has ruled for most of the postwar era and has been tightly bound to the U.S.–Japan alliance since the Cold War. One of Japan’s largest postwar social movements—the 1960 “Anpo Struggle”—was essentially a contest between the LDP and leftist parties like the Japan Socialist Party and the Japanese Communist Party over the U.S.–Japan Security Treaty. Following the Cold War, Japan’s left-wing parties fell into decline, leaving the LDP with fewer domestic constraints and a more pro-American foreign policy stance. The only significant deviation occurred from 2009 to 2012 during the brief rule of the Democratic Party of Japan, which sought to improve relations with China and floated more independent foreign policy ideas such as an “East Asian Community.” However, the LDP quickly returned to power and has spent the past decade tightening Japan’s alignment with the U.S., relaxing military constraints, endorsing the U.S. Indo-Pacific Strategy, and even supporting a “Taiwan card” approach to counter China. Despite the stabilizing role of economic ties, Japan has never formally supported China’s Belt and Road Initiative or joined the Asian Infrastructure Investment Bank. Instead, in 2022, it passed an “Economic Security Promotion Act,” which may further politicize and securitize its economic and technological cooperation with China.

China is also Australia’s largest trading partner in terms of goods, imports, and exports. Nonetheless, the two countries’ diplomatic relationship has deteriorated over the past decade. Australia insists that China poses a security threat in the Asia-Pacific and has actively joined U.S.-led strategic balancing mechanisms like the Quadrilateral Security Dialogue (QUAD) and AUKUS (the Australia–U.K.–U.S. security pact), even agreeing to acquire U.S. nuclear-powered submarines. It has also expressed wariness over China’s security cooperation with Pacific Island nations such as the Solomon Islands. Under the conservative Liberal Party government of Scott Morrison, China–Australia relations hit a low point. Though the Labor government under Anthony Albanese has softened its tone, it has not fundamentally reversed course. In fact, both Labor and the Liberals are mainstream Western parties with largely aligned foreign policy orientations. They share bipartisan consensus on key issues such as rejecting the BRI and supporting the QUAD and AUKUS.

There are also some Western countries with strong economic ties to China that, while not fully choosing sides, lean toward the United States in the China–U.S. dynamic. For example, Germany has no military presence in the Asia-Pacific and is geographically distant from China—so there’s little reason for it to explicitly take sides. Nevertheless, whether under the Social Democrats (SPD), Christian Democratic Union (CDU), or the Greens, German foreign policy tends to be values-driven. As a result, Germany—and the broader EU mainstream—has adopted a “Sinatra Doctrine” approach of “not choosing sides, but not equidistant either.” That is, while asserting strategic autonomy, it leans toward the U.S. on the basis of shared values, and formally labels China a “systemic rival.” These European countries will neither “decouple” from China at America’s urging nor explicitly join the Belt and Road, but they will at times take positions on China’s domestic issues, often to Beijing’s irritation.

(3) China-Leaning Model

Some countries have clearly chosen or leaned toward China in the China–U.S. rivalry. These states have not only joined China’s Belt and Road Initiative (BRI) and maintained close economic ties but also frequently support China in political and diplomatic arenas, including through various forms of security cooperation. These countries often have frictions with the United States and are frequently viewed by Washington as failing to meet Western democratic standards. In contrast, their ruling parties tend to have strong relations with the Chinese Communist Party (CCP).

Currently, China and Russia maintain an exceptionally close relationship. Their “Comprehensive Strategic Partnership of Coordination for a New Era” includes annual head-of-state meetings, regular prime ministerial summits, legislative exchanges, and five vice-premier-level intergovernmental cooperation committees. They also cooperate through security-focused mechanisms such as consultations between the General Offices of their central committees, strategic security dialogues, and law enforcement exchanges. In areas like arms transfers and joint military exercises, the two also engage in high-level security collaboration. Vladimir Putin’s United Russia party has long been the dominant ruling party in Russia and enjoys a mutually appreciative relationship with the CCP. While the two parties differ ideologically, both oppose the West’s monopolistic definitions of concepts such as “democracy” and “human rights.” Unlike the West’s relatively rigid values-based diplomacy, China and Russia do not require political or ideological alignment as a precondition for cooperation. Instead, they emphasize the right of each nation to choose its own form of democratic practice suited to its national conditions.

Pakistan is another example of a country deeply aligned with China. Designated an “all-weather strategic cooperative partner,” Pakistan actively participates in the BRI through the China–Pakistan Economic Corridor and maintains close security ties with China through joint exercises and arms sales. The U.S. once played a major role in aiding Pakistan, particularly during the early Cold War and the War on Terror, even naming it a Major Non-NATO Ally. However, the bilateral relationship has long been fraught. U.S. counterterrorism operations inside Pakistan have often violated its sovereignty, and Washington frequently criticizes Pakistan for being insufficiently democratic and poorly governed. Meanwhile, anti-American sentiment runs deep within Pakistan, which notably declined to participate in the U.S.-led “Summit for Democracy” in 2021. At the time, Prime Minister Imran Khan publicly praised the Chinese political system for its achievements in development, anti-corruption, and pandemic control—emphasizing the appeal of China’s governance model. Khan’s party, Pakistan Tehreek-e-Insaf (PTI), has often been characterized as populist by analysts. This ideological attraction has undoubtedly helped cement the China–Pakistan partnership.

Conclusion

The practice of “hedging” between two rival great powers is a product of both the international system and domestic political conditions. It relies on a structure in which the two dominant powers offer different public goods—security and economic opportunity—and refrain from using force or coercion to compel alignment. When countries enjoy the space to choose, their perceptions of which great power is “richer” or “better” profoundly shape their selection of economic partners and security allies.

Differences among ruling parties further influence these choices. Populist parties, for instance, tend to prioritize economic interests and are more willing to set aside values-based constraints. Domestic political polarization and frequent leadership changes also allow some countries to maintain a relative balance in their relations with both China and the U.S. As a result, the evolving landscape of party politics serves as a key barometer for shifts in these states’ foreign alignments. China, therefore, should tailor its approach to different parties’ foreign policy preferences, strengthening engagement even with parties that are not embraced by the Western mainstream.

The current phenomenon of hedging by U.S. allies underscores how China’s economic rise has begun to challenge the American alliance system. In recent years, even formal allies of the U.S. have proactively expanded economic ties with China—prompting concern and competition from Washington. Yet the U.S., constrained by its diminished capacity and willingness to provide global development opportunities, finds it difficult to offer a true substitute for what China can bring to the table.

For China, strong economic partnerships and growing military capabilities alone have not yet translated into broad acceptance of its leadership role in global politics and security. Many countries still see the U.S. as “better” than China—a perception shaped largely by ideology and historical narratives. The U.S. continues to anchor its alliances in the notion of “shared values,” hindering China’s ability to convert its hard power into appeal among the “new middle-ground” states.

To overcome this, China must now address the problem of being “vilified” in the international sphere—just as it previously addressed being “beaten” militarily and “starved” economically. In response to the ideological offensive centered on “freedom and democracy,” China’s external messaging should emphasize that each country has the right to modernize along its own path and that each political party can adopt its own values. Beyond defending against criticism, China must also actively project its own “good”—ultimately working to establish international discourse power commensurate with its national strength and global status.

Just as aesthetic standards vary by person, era, and culture, perceptions of a country as “good” or “bad” are the outcome of ongoing normative interactions. This suggests that the current global discourse structure is changeable—albeit slowly. China has already begun to act. In 2021, it proposed the Global Development Initiative to reinforce its strengths. In 2022, it introduced the Global Security Initiative to challenge the U.S.-led world order. In 2023, it launched the Global Civilization Initiative, aiming to break Western monopoly over normative judgments of good and bad. Notably, this last initiative was unveiled at a dialogue among political parties, underscoring the growing importance of party politics in global affairs.

Looking ahead, China must adopt differentiated strategies tailored to the types and regions of “new middle-ground” countries. For Asia-Pacific hedgers, it should consolidate neighborly ties and deepen win–win cooperation, nudging them closer. For European hedgers, it should seek common ground while expanding mutual benefit and connectivity to prevent realignment toward the U.S. For Asia-Pacific countries aligned with the U.S., China should aim to downplay the “China threat” narrative and recalibrate bilateral ties. For pro-American European countries, China should deepen cooperation and dialogue on the basis of mutual respect, striving to keep them neutral. For countries already leaning toward China, China should maintain current levels of economic, political, and security cooperation, while jointly promoting “pluralist” norms internationally—challenging the dominance of Western values.

Editor: Zhiyu Wang