China's approach to gaining coercive leverage in the limited wars that it has planned to fight against nuclear-armed adversaries differs from the choices of other states. A theory of strategic substitution explains why China relied on threats to use information-age weapons strategically instead of nuclear threats or conventional victories in the post–Cold War era. Information-age weapons (counterspace weapons, large-scale cyberattacks, and precision conventional missiles) promise to provide quick and credible coercive leverage if they are configured to threaten escalation of a conventional conflict using a “brinkmanship” or “calibrated escalation” force posture. China pursued information-age weapons when it faced a leverage deficit, defined as a situation in which a state's capabilities are ill-suited for the type of war and adversary that it is most likely to fight. China's search for coercive leverage to address those defi- cits became a search for substitutes because its leaders doubted the credibility of nuclear threats and were unable to quickly redress a disadvantage in the conventional military balance of power. A review of original Chinese-language written sources and expert interviews shows that China pursued a coercive cyberattack capability to address a leverage deficit after the United States bombed China's embassy in Belgrade in 1999. China's low dependence on information networks shaped its initial choice of a brinkmanship posture for large-scale offensive cyber operations. China switched to a calibrated escalation posture in 2014, following a dramatic increase in its vulnerability to cyberattacks.

Chinese views of nuclear escalation are key to assessing the potential for nuclear escalation in a crisis or armed conflict between the United States and China, but they have not been examined systematically. A review of original Chinese-language sources and interviews with members of China's strategic community suggest that China is skeptical that nuclear escalation could be controlled once nuclear weapons are used and, thus, leaders would be restrained from pursuing even limited use. These views are reflected in China's nuclear operational doctrine (which outlines plans for retaliatory strikes only and lacks any clear plans for limited nuclear use) and its force structure (which lacks tactical nuclear weapons). The long-standing decoupling of Chinese nuclear and conventional strategy, organizational biases within China's strategic community, and the availability of space, cyber, and conventional missile weapons as alternative sources of strategic leverage best explain Chinese views toward nuclear escalation. China's confidence that a U.S.-China conflict would not escalate to the use of nuclear weapons may hamper its ability to identify nuclear escalation risks in such a scenario. Meanwhile, U.S. scholars and policymakers emphasize the risk of inadvertent escalation in a conflict with China, but they are more confident than their Chinese counterparts that the use of nuclear weapons could remain limited. When combined, these contrasting views could create pressure for a U.S.-China conflict to escalate rapidly into an unlimited nuclear war.

Whether China will abandon its long-standing nuclear strategy of assured retaliation for a first-use posture will be a critical factor in future U.S.-China strategic stability. In the past decade, advances in U.S. strategic capabilities, especially missile defenses and enhanced long-range conventional strike capacity, could undermine China's nuclear retaliatory capability, which is based on a relatively small force and second-strike posture. An exhaustive review of Chinese writings on military affairs indicates, however, that China is unlikely to abandon its current nuclear strategy of assured retaliation. Instead, China will modestly expand its arsenal, increase the sophistication of its forces, and allow limited ambiguity regarding its pledge not to use nuclear weapons first. This limited ambiguity allows China to use the threat of nuclear retaliation to deter a conventional attack on its nuclear arsenal, without significantly increasing the size of its nuclear forces and triggering a costly arms race. Nevertheless, China's effort to maintain its strategy of assured retaliation while avoiding an arms race could backfire. Those efforts increase the risk that nuclear weapons could be used in a crisis between the United States and China, even though China views this possibility as much less likely than the United States does.