superiority to China-as Britain did to the United States at accommodating Hitler should not be allowed to tarnish the the turn of the twentieth century.Managing the balance of practice of strategic restraint as an ingredient critical to the naval forces in China's regional waters may well prove to be peaceful management of power transitions.Indeed,as the the core strategic issue before the United States and China Anglo-American case makes clear,the readiness of both over the coming decade or two.Both powers must be on reigning hegemon and rising challenger to practice guard to avoid an unintended spiral of hostility. reciprocal restraint is central to ensuring that power shifts occur without dangerous rivalry. China,in particular,seems prone to the pernicious effects of blowback that infected Germany prior to World War I. Mutual accommodation between China and the United Internationally,should China expand its strategic States has already demonstrated its beneficial effects.In capabilities too quickly or prove too threatening in its early 2o10,tensions between the two countries were rising neighborhood,it would likely provoke a countervailing rapidly.The United States was disgruntled over the value of coalition led by the United States.The formation of this the yuan,China's censorship of Google,and its countervailing coalition would in turn stoke nationalist unwillingness to confront Iran over its nuclear program. sentiment in China,leading to the same international- China complained about U.S.pressure on the currency domestic feedback loop that stoked Germany's unchecked issue,arms sales to Taiwan,and President Obama's naval buildup and the naval arms race with Britain.Chinese meeting with the Dali Lama.Mutual recrimination leaders need to be especially mindful of avoiding the abounded.Then both sides backed away from their dangers of nationalist blowback. confrontational policies.Washington ceased public castigation of Beijing's monetary policy.Beijing soon An alternative pathway to conflict could entail the impact of thereafter agreed to raise the value of the yuan.President unforeseen economic shocks on Chinese and U.S.grand Hu Jintao went to Washington for a summit on nuclear strategy.As the inter-war period amply demonstrated, nonproliferation and direct talks with Obama.It was not economic duress can cause both strategic excess and the long before Beijing agreed to new sanctions on Iran and converse-dangerous under-balancing.China,the United struck a deal with Google about its continued operations in States,and the broader international community seem to China. have handled reasonably well the "Great Recession"of 2008-2010,avoiding the steep and enduring declines in To be sure,these were the easy issues.The stakes will be economic performance of the sort that produced strategic much higher when core geopolitical issues are on the line. dysfunction during the 193os.At least to some extent,the In addition,both parties need to find the right balance in international community seems to have learned the lessons pursuing the diplomacy of restraint,avoiding both being of the 193os and avoided the sauve qui peut attitudes that too solicitous and too firm.As the next section discusses, fragmented the collective staying power of the status quo the domestic politics of foreign policy may be the most states during the inter-war period.Nonetheless,the significant obstacles on this front. potential for future economic shocks to complicate the coming power transition remains very real. The Centrality of Domestic Politics Grand strategy,in democracies but especially in non- The Centrality of Reciprocal Restraint democracies,is often seen to be a realm of policy relatively Policies of accommodation have been given a bad name by insulated from the distortions of domestic politics.It is the history of the 193os and appeasement of Nazi Germany anything but,as made clear by the sequence of events by Europe's status quo powers.But the grievous mistake of leading up to the outbreak of World War I and World War NEW AMERICA FOUNDATION PAGE I3new america foundation page 13 superiority to China – as Britain did to the United States at the turn of the twentieth century. Managing the balance of naval forces in China’s regional waters may well prove to be the core strategic issue before the United States and China over the coming decade or two. Both powers must be on guard to avoid an unintended spiral of hostility. China, in particular, seems prone to the pernicious effects of blowback that infected Germany prior to World War I. Internationally, should China expand its strategic capabilities too quickly or prove too threatening in its neighborhood, it would likely provoke a countervailing coalition led by the United States. The formation of this countervailing coalition would in turn stoke nationalist sentiment in China, leading to the same international￾domestic feedback loop that stoked Germany’s unchecked naval buildup and the naval arms race with Britain. Chinese leaders need to be especially mindful of avoiding the dangers of nationalist blowback. An alternative pathway to conflict could entail the impact of unforeseen economic shocks on Chinese and U.S. grand strategy. As the inter-war period amply demonstrated, economic duress can cause both strategic excess and the converse – dangerous under-balancing. China, the United States, and the broader international community seem to have handled reasonably well the “Great Recession” of 2008-2010, avoiding the steep and enduring declines in economic performance of the sort that produced strategic dysfunction during the 1930s. At least to some extent, the international community seems to have learned the lessons of the 1930s and avoided the sauve qui peut attitudes that fragmented the collective staying power of the status quo states during the inter-war period. Nonetheless, the potential for future economic shocks to complicate the coming power transition remains very real. The Centrality of Reciprocal Restraint Policies of accommodation have been given a bad name by the history of the 1930s and appeasement of Nazi Germany by Europe’s status quo powers. But the grievous mistake of accommodating Hitler should not be allowed to tarnish the practice of strategic restraint as an ingredient critical to the peaceful management of power transitions. Indeed, as the Anglo-American case makes clear, the readiness of both reigning hegemon and rising challenger to practice reciprocal restraint is central to ensuring that power shifts occur without dangerous rivalry. Mutual accommodation between China and the United States has already demonstrated its beneficial effects. In early 2010, tensions between the two countries were rising rapidly. The United States was disgruntled over the value of the yuan, China’s censorship of Google, and its unwillingness to confront Iran over its nuclear program. China complained about U.S. pressure on the currency issue, arms sales to Taiwan, and President Obama’s meeting with the Dali Lama. Mutual recrimination abounded. Then both sides backed away from their confrontational policies. Washington ceased public castigation of Beijing’s monetary policy. Beijing soon thereafter agreed to raise the value of the yuan. President Hu Jintao went to Washington for a summit on nuclear nonproliferation and direct talks with Obama. It was not long before Beijing agreed to new sanctions on Iran and struck a deal with Google about its continued operations in China. To be sure, these were the easy issues. The stakes will be much higher when core geopolitical issues are on the line. In addition, both parties need to find the right balance in pursuing the diplomacy of restraint, avoiding both being too solicitous and too firm. As the next section discusses, the domestic politics of foreign policy may be the most significant obstacles on this front. The Centrality of Domestic Politics Grand strategy, in democracies but especially in non￾democracies, is often seen to be a realm of policy relatively insulated from the distortions of domestic politics. It is anything but, as made clear by the sequence of events leading up to the outbreak of World War I and World War