Under President Xi Jinping, China is modernizing its military and growing more assertive both regionally and globally. But while Chinese leaders will not shy away from confrontation with the United States or its regional neighbors, they also believe that to maintain stability and prosperity, they have no choice but to get along with the United States. Thus, the United States faces an acute strategic dilemma: a U.S.-China relationship characterized by a complex mix of competition and cooperation & and plagued by mutual suspicion and distrust. For example, how should the nation react to Chinese maritime territorial claims? Over-reaction risks escalation while under-reaction risks emboldening China, which could mistake U.S. moderation for weakness or declining commitment to the Asia-Pacific.