Growing geopolitical tensions in East Asia, particularly between China and Japan, have increased concern that the world may be on the verge of a new crisis that could quickly and inadvertently spiral out of control. At the very least, the world looks set for a prolonged period of peacetime security competition between major powers for the first time since the Cold War. The main driver of this security competition is China’s innovative strategy to revise the regional order in Asia. As a senior Chinese diplomat put it to me, while the United States is rebalancing to Asia, China “is trying to rebalance the status quo.” Beijing is avoiding outright aggression but is digging deep into the coercive diplomatic tools available to it to get its way. China’s seizing of the Scarborough Shoal and its declaration of an Air Defense Identification Zone in the East China Sea are two of the most prominent (and in China’s view successful) examples. If this trend continues, Japan, the United States and others will have to step up their balancing efforts and regional security competition will intensify. The temptation when analyzing the strategic environment is to draw comparisons to America’s 20th century experiences, whether that is the Cold War or the run-up to World War I. Both are misplaced and cloud unique features of today’s challenge. Geopolitical competition is on the rise but it is occurring in a world that is highly interdependent and globalized. This distinguishes our moment – one of “interdependent competition” – from the Cold War when the United States and the Soviet Union had little to do with each other economically or culturally. Moreover, America’s allies today are closely tied to China, unlike relations between the Soviet Union and Western Europe.