Is power really a zero-sum game? Launching the nukes would be bad for whoever they blew up, but bad for whoever launched them, too, particularly if whoever they launched them at launched their own.

If the US were to release all the wrongly-convicted brown-skinned people, would that be good for China and bad for the US? Maybe it would be good for the US not to incarcerate innocent people who could be living productive, meaningful lives. They might even buy more Chinese factory output. And, likewise, if China stopped abusing its Uyghur citizens, that would certainly be good for that segment of Chinese society, and arguably for the rest. There must be plenty of Han who are (or would be if they knew) troubled by China's abuses, and maybe wonder if they're next. But it's hard to see how that would benefit the US.

The fact is, neither China nor the US is monolithic. Anything that changes has winners and losers within each country. Private prisons would hate losing their massively profitable inmates. States would welcome the drop in drain on their budgets (provided their contracts with the private prisons did not mean it would incur penalties and cost them even more).