As President Barack Obama begins his second term in office, China poses a major policy challenge to the United States largely because of the unpredictable trajectory of both China’s domestic transformation and foreign relations. While there has been much attention paid to China’s rapid economic rise and growing international clout, two other scenarios have been overlooked: domestic revolution and foreign war. While some might view these events as “black swans”—low probability, high-impact developments—the Obama administration should be proactive and think through its policies options should these events unfold.

There are many serious problems in China that could trigger a major crisis, including slowing economic growth, widespread social unrest, rampant official corruption, vicious elite infighting, and heightened nationalism in the wake of escalated tensions over territorial disputes with Japan and some Southeast Asian countries. Either event would be very disruptive, severely impairing global economic development and regional security in the Asia-Pacific; a combination of the two would constitute one of the most complicated foreign-policy challenges for President Obama’s second term.

There are two particularly undesirable outcomes. One is a situation in which the vast majority of the Chinese public becomes both anti–Communist Party leadership and anti-American. The other is a situation in which the new party boss, Xi Jinping, derives his popularity from a strong endorsement of Chinese militarism.

The scenario of abrupt bottom-up revolution occurring in China has recently generated much debate within that country. One of the most popular books in elite circles today is the Chinese translation of Alexis de Tocqueville’s 1856 classic The Old Regime and the Revolution. In speeches given after becoming party general secretary, Xi warned that the party could collapse if the leadership failed to seize the opportunity to reform and improve governance.

The new leadership is known for its unprecedented predominance of “princelings” in power—leaders who come from families of high-ranking officials. Four of the seven Politburo Standing Committee members, including Xi, are princelings. Many prominent party leaders and their families have used their political power to convert state assets into private wealth; this includes transfers to family relatives who live, work, or study in the United States and other Western countries. This situation is not only undermining elite cohesion and the factional balance of power, but is also generating cynicism among the Chinese public regarding any promises on the part of the leadership to tackle corruption. Furthermore, it may add ammunition to the sensational accusation that the United States provides harbor to corrupt Communist Party officials.

To avert this first scenario we should, while engaging with the Chinese leadership, more explicitly articulate to the Chinese people both the longstanding goodwill that the United States has toward China and America’s firm commitment to democracy, human rights, media freedom, and the rule of law, which we believe are fundamental to the long-term stability of any country.

If the first scenario of domestic revolution can be seen as a failure of the Xi leadership to adopt effective political reforms to prevent crisis, then the second scenario—that of China in war—may be considered one possible “successful” attempt by Xi to consolidate power. This does not necessarily mean that the Chinese leadership intends to distract domestic tensions with an international conflict; contemporary Chinese history shows that the practice of trying to distract the public from domestic problems by playing up foreign conflicts has often ended in regime change. Yet Xi may be cornered into taking a confrontational approach to foreign policy in order to deflect criticism of his own strong foreign connections.

Even more important, we need to pay attention to the emergence of militarism among some military officers. Chinese analysts have observed that these military princelings are interested in bolstering the military’s power in the upcoming Xi era. Such a move would have the potential to increase the risk of both military interference in domestic politics and military conflicts in foreign relations.

It is not in the U.S.’s interest to see China’s transition to a constitutional democracy proceed in a manner overwhelmingly destructive to China’s social stability or its peaceful relations with any of its neighboring countries, which would risk leading the United States into war. Clarifying to the Chinese public that the U.S. neither aims to contain China nor is oblivious to their national and historical sentiment would help reduce anxiety and possible hostility across the Pacific. Second, enhanced contact between U.S. and Chinese civilian and military policymakers can help us better understand the decision-making processes and domestic dynamics within China. It can also aid us in heading off a regional conflict. Finally, when done within a broader strategy with all our allies and neighbors in the region, it could reassure China that the United States is not only firmly committed to its regional security framework in the Asia-Pacific, but also genuinely interested in finding a broadly acceptable solution to the various disputes.