The United States and China are today much more powerful than any other state and the distribution of capabilities in the international system is now bipolar. This new era of US–China bipolarity differs from the US–Soviet rivalry of the second half of the twentieth century. The most important difference is not economic interdependence, ideology, institutions, the role of nuclear weapons, or political leaders, but geopolitics. Based on a new geostructural realist theory, this chapter focuses on explaining and predicting balancing and stability in the new bipolar system. Geostructural realism contends that the US and China are unlikely in the near future to pursue an arms race characteristic of the US–Soviet pattern of behavior, but there is a relatively higher risk of a limited war between the superpowers in the twenty-first century than during the previous bipolar era.