On Wednesday, Chinese President Xi Jinping offered a not so subtle warning that he intends to challenge the U.S. in the coming years.

Speaking at China's Communist Party Congress, which takes place every 5 years in Beijing, President Xi promised to exert China's increasing power on the international stage. But while Xi claimed he would respect other nations, some of his words suggest otherwise, namely his threat to Taiwan that "We will never allow anyone, any organization, or any political party, at any time or in any form, to separate any part of Chinese territory from China," and his celebration of what he sees as a U.S. retreat from international leadership.

I suspect China will focus on contesting U.S. interests in three main areas: the South China Sea, cyberspace and intellectual property rights, and global power-politics.

In the South China Sea, Xi has already seized control over vast stretches of water. Constructing artificial islands or building on existing formations, the Chinese leader has developed an effective area-denial capability with which it could strangle vast trade flows. I say "vast" for a reason; the Center for Strategic and International Studies estimates that one-third of all global trade, amounting to $3.7 trillion in 2016, passes through the South China Sea.

Yet while most of this trade is China's exports and imports, Xi's control over those waters gives him means to extract concessions from nations like Thailand, Vietnam, Singapore, and Japan. Put simply, China can tell those nations: "If you don't want an economic disaster; agree to X deal with us, or vote X way at the United Nations, or oppose the U.S. on X issue."

In cyberspace and intellectual property, Xi has presided over an industrial-secret-stealing machine. The great success of Chinese hackers has damaged the prosperity-potential of U.S. companies and thus the U.S. economy, and weakened U.S. national security. To address this concern in America's favor, diplomacy won't be enough: President Obama and Xi previously agreed a deal to reduce cyber-espionage targeting intellectual property, but the Chinese ignored it. In the coming years, President Trump must be willing to contest China with our own cyber-offensives.

Finally, on economic power-politics, China is using new institutions such as the Asia Investment and Infrastructure Bank (AIIB) to invest heavily in foreign nations. But the bank isn't a beneficent organization, it's a means of exerting Chinese control in other spheres.

In the same way, pretending to support the Paris climate accords, Xi is cultivating European governments against the U.S. Earlier this summer, the German Ambassador to Washington told me, "If we lose American leadership, others will step in. The recent [economic] conference in Beijing was a reminder that China is ready to step into a possible vacuum that the U.S. might be leaving." Even America's closest ally, Great Britain, won't challenge China on issues like Xi's breach of treaties in relation to Hong Kong, or his aggression in the South China Sea.

Ultimately, U.S. policy must be governed by a sense of proportion in relation to these challenges. Pursuing peace and shared economic growth, the U.S. should accept China's rising influence rather than, as with the Soviets in the Cold War, challenging it at every avenue. But where America interests are threatened, policymakers will need to embrace a realist policy of containment and deterrence. As a first step, Trump should work to establish a new security architecture in the Pacific and Indian Oceans; winning nations like India and Vietnam into a mutually beneficial U.S.-led effort to uphold international order and stability.