History offers few examples of a rising power finding its place in the international order without a war with the dominant power. Conflict is only avoided when the dominant power willingly makes space for the challenger, as Britain made way for America in the late nineteenth century. Will America do the same for China? Should it?

As America confronts these questions, it too faces a choice between influence and order. Like China, it wants as much influence as it can get, with as little disorder as possible, so it has to balance its desire for Asia to remain peaceful against its desire to remain in charge. Washington has not faced this choice before. Since Nixon went to China, US primacy has been synonymous with order, and the more influence America has had, the more stable Asia has been. Now China’s rise means that the region might be more peaceful if America settles for a more modest role. If instead America tries to retain primacy in the face of China’s power, it will provoke a struggle that upsets the region. It would be sacrificing Asia’s peace to preserve its own primacy.

America could easily find itself doing just that. After being in charge for forty years, many Americans cannot imagine that Asia can be peaceful except under American leadership. Conceding even a share of power to another country looks risky, and especially conceding power to China. It is easy to see any desire by China to expand its influence as inherently threatening, and the more repressive and authoritarian China’s government appears, the more threatening it looks. No one can be comfortable about a regime that represses dissent at home exercising more power abroad. But what is the alternative? Forty years ago Washington – and Canberra – decided to accept the Chinese Communist Party as the legitimate government of China. Since then, and partly as a result, China has grown to become a very powerful country indeed. As America continues to deal with China and to benefit from its growth, it faces the consequences of those decisions. Some of those are unpalatable. While continuing to accept the communists as the legitimate government of China internally, many Americans would now prefer to deny that China’s government can legitimately exercise its power internationally.

Unfortunately, Americans do not get to make that kind of choice now. They cannot separate China’s internal government from the exercise of its international power. China’s power, controlled by China’s government, must be dealt with as a simple fact of international politics. If Americans deny China the right to exercise its power internationally within the same limits and norms that they accept for themselves, they can hardly be surprised if China decides not to accept the legitimacy of American power and starts pushing back. These days it can push back pretty hard.

America, therefore, has to decide whether its reasons for trying to prevent China exercising its growing power on the international stage are strong enough to justify the resulting mayhem. That depends on whether China is willing to exercise its power within the rules accepted by the international community as a whole – broadly those set out in the Charter of the United Nations. So far the evidence suggests that it will. The fact that China’s government is repressive at home makes us uneasy, but it does not automatically mean it will behave unacceptably abroad. The mere fact that China wants to expand its influence as its power grows does not show that it intends to break the rules and use that power improperly. In particular, the fact that China’s ambitions might be contrary to American interests does not make them inherently illegitimate – unless you believe, as many Americans do, that acceptable international conduct is defined as the acceptance of American primacy.

Americans find that easy to believe because they have got so used to exercising primacy and they don’t want to give it up. It has become a matter of national identity, which makes it very hard to relinquish. What’s more, they do not yet accept that they will have to fight to keep it. Most Americans, even those who know Asia well, do not really accept that China poses a serious challenge to their power and role in Asia. They remind you that America’s eclipse in Asia has been predicted many times before, and the doomsayers have always been wrong. They say this time will be no different: America will bounce back from its present troubles, stronger than ever.

This is half right. It is true that America’s present problems will pass. The wars in Iraq and Afghanistan have been wasteful and demoralising, but they will not bring America to its knees. America’s economic problems are serious and debilitating, but it remains a remarkably innovative and vibrant place with an immense capacity for recovery and reinvention. If China’s challenge to America depended on American weakness, there would be little to worry about. But the story of Asia’s power shift is not about America. It is about China. This is not a story of American weakness, but of Chinese strength. Even if the War on Terror and the global financial crisis had never happened, even if America’s budget was in healthy surplus and its financial system in perfect shape, China’s economic transformation would still pose the biggest threat to America’s place at the apex of global power since it reached there in 1880.

China’s challenge is different because never before has there been a country with the potential to overtake America economically. Japan could not do it: with only one-third America’s population, Japan’s workers would have needed to be three times as productive as America’s to overtake it, and that was never going to happen. The Soviet Union’s bigger population gave it a better chance, but its economy never approached America’s level of productivity. China is different because its population is much bigger than America’s and its economy works much better than the Soviet Union’s.

Even so, all of us find it hard to imagine that America’s economy could ever be overtaken. It seems a contradiction in terms: an America that was not the world’s richest and most powerful nation would not be America. This is not true – America as number two would still be America – but it will take most Americans some time to accept this, and the process will be a painful one.

Hugh White is professor of Defence and Strategic Studies at the ANU.

This is extracted from the Quarterly Essay 39, ‘Power Shift: Australia’s Future between Washington and Beijing’.