One-Sentence Summary
Allison delivered a “diagnostic report” to both Washington and Beijing: The US holds China’s “aorta,” while China grasps America’s “lifeline” — neither can emerge unscathed if the other suffers a “sudden collapse.”
I. Two Diagnostic Reports
| Category | US Chokepoints | China’s Countermeasures |
|---|---|---|
| Finance | SWIFT & USD clearing, global bank penalties | Digital yuan, CIPS, offshore RMB swap network |
| Tech | EDA, sub-7nm lithography machines, CUDA, AI GPUs | Rare earth magnets, battery chemistry, PV silicon wafers, mature-node production capacity |
| Supply Chain | Japan-SK-Taiwan chip alliance, BIS “Entity List” | 70% global rare earths, 60% EV batteries, 40% port throughput |
| Military | 11 carriers, 750 global bases, nuclear triad | A2/AD, hypersonic missiles, BeiDou |
| Market | World’s largest consumer market, USD commodities | Top goods importer, largest trade partner for 140+ nations |
II. Allison’s Three Hidden Trump Cards
- The Dollar Guillotine
- 85% of China’s 2024 trade settled in USD.
- One OFAC SDN update could sever Chinese banks’ overseas correspondent ties overnight.
- The Allied Supply Chain Cage
- TSMC 3nm, ASML EUV, Nvidia H100: all require U.S. licenses for China.
- 2024 Chip Defense Pact with Japan/SK/Australia/Philippines triggers supply cuts in 3 working days.
- Intelligence-Law Complex
- Dec 2023 CLOUD Act update: Any U.S.-listed or .com-domain firm faces extraterritorial jurisdiction.
- 60% of China’s AI unicorns rely on AWS/GCP/Azure clusters — one click to paralyze.
III. China’s Counterstrike Toolkit
- Rare Earths + Graphite Export Controls: Post-Aug 2023, U.S./EU military magnet costs spiked 300%.
- New Energy Dominance: 63% global EV battery share in 2024. U.S. 2030 EV goals depend on Chinese supply.
- Market Gravity: Tesla Shanghai produced 1.1M vehicles (50% global output) in 2024. “De-sinicization” adds 15% cost to U.S. reindustrialization.
IV. Thucydides Trap 2.0
At a June 2025 Beijing closed-door meeting, Allison outlined three scenarios:
- A. Hot War (Taiwan/S. China Sea clash): 15% probability, >$10T losses.
- B. New Cold War (Full decoupling): 35% probability, +1% annual global GDP loss.
- C. Coopetition (Guardrails + partial cooperation): 50% probability, requiring:
- 24/7 military hotline
- Critical goods “whitelist” auto-exemptions
- Quarterly “supply chain trauma triage” summits.
V. Final Word
At 85, Allison still circles the globe to prove:
“War is never inevitable — only miscalculation is. Whoever deciphers the other’s ‘non-negotiable redlines’ and ‘tradable interests’ first can keep Thucydides confined to history books.”