This essay presents a theoretical approach toward war and peace, reviews basic conditions for world leadership, discusses four modes of global power transitions, illuminates the likely emergence of the future superpowers, and summarizes the differences and common interests between the United States, the incumbent world leader, and China, a potential contender for the global leadership in the 21st century. The theoretical background is power‐transition theory, which predicts war when superpowers are close in power and peace when power preponderance exists. Power parity need be also considered in the context of common interests and preferences of superpowers. Conflict abates when the nations share fundamental rules of the game in world affairs. Four historical modes of transitions – co‐dominion, deterrence, confrontation, and cooperation – were identified. Of the four historical transitions, each time, the challenger surpassed the hegemon in economic power, and deterrence and confrontation by the hegemon against the challenger did not prevent the challenger from assuming global leadership in the long term. Among the newly rising nations (BRICs), China is discussed as a potential contender for world leadership. The economic and financial interdependence between the United States and China is currently the driving force in their relations. It shapes their political arrangements, necessitating coordination and cooperation in policy issues. While economic collaboration and interdependence drive the relations between the two, they are not sufficient conditions for a peaceful transition, until their political and security relations are solidified and their preferences coalesce substantively.