The logic of US-China competition

The logic of US-China competition

The logic of US-China competition
Joe Biden addresses a joint session of Congress, with VP Kamala Harris and House Speaker Nancy Pelosi in the background, Washington, April 28, 2021. (Reuters)
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In his recent address to the US Congress, President Joe Biden warned that China was deadly serious about trying to become the world’s most significant power. But he also declared that autocrats would not win the future; America would.
If mishandled, the US-China great power competition could be dangerous. But if America plays it right, the rivalry with Beijing could be healthy.
The success of Biden’s China policy depends partly on China, but also on how the US changes. Maintaining America’s technological lead will be crucial and will require investing in human capital as well as in research and development. Biden has proposed both.
At the same time, the US must cope with new transnational threats such as climate change and a pandemic that has killed more Americans than all the country’s wars, combined, since 1945. Tackling these challenges will require cooperation with China and others.
Biden, therefore, faces a daunting agenda and is treating the competition with China as a Sputnik moment (anxiety in the West about the perceived technological gap between the US and Soviet Union after the launch of the Sputnik 1 artificial satellite in 1957).
Although he referred in his address to former American President Franklin D. Roosevelt and the Great Depression, and avoided misleading Cold War rhetoric, an apt comparison is with the 1950s, when then President Dwight Eisenhower used the shock of the Soviet Union’s satellite launch to galvanize US investment in education, infrastructure, and new technologies. Can America do the same now?
China is growing in strength but also has significant weaknesses, while the US has important long-term power advantages.
Start with geography. Whereas the US is surrounded by oceans and friendly neighbors, China has territorial disputes with India, Japan, and Vietnam. Likewise, US advantage. America is now a net energy exporter, while China depends on oil imports transported across the Indian Ocean — where the US maintains a significant naval presence.
Furthermore, the US wields financial power as a result of its global institutions and the dollar’s international hegemony. While China aspires to a larger global financial role, a credible reserve currency depends on currency convertibility, deep capital markets, honest government, and the rule of law — all of which China lacks.
The US has demographic advantages, too: Its workforce is increasing, while China’s has begun to decline.
America has also been at the forefront of key technologies, and US research universities dominate global higher education rankings. At the same time, China is investing heavily in research and development, now competes well in some fields, and aims to be the global leader in artificial intelligence (AI) by 2030. Given the importance of machine learning as a general-purpose technology, China’s advances in AI are particularly significant.
Moreover, Chinese technological progress is no longer based solely on imitation. While former US President Donald Trump’s administration correctly punished China’s theft and coercive transfer of intellectual property, and unfair trade practices, a successful US response to China’s technological challenge will depend more on improvements at home than on external sanctions.
As China, India, and other emerging economies continue to grow, America’s share of the world economy will remain below its level of around 30 percent at the beginning of the century. In addition, the rise of other powers will make it more difficult to organize collective action to promote global public goods.
Nonetheless, no country — China included — is about to displace the US in terms of overall power resources in the next few decades.
Rapid Asian economic growth has encouraged a horizontal power shift to the region, but Asia has its own internal balance of power. China’s strength is balanced by Japan, India, and Australia, among others, with the US playing a crucial role. If America maintains its alliances, China will have slim prospects of driving it from the Western Pacific, much less dominating the world.
But competing with China is only half the problem facing Biden.
American technology expert, Richard Danzig, said: “Twenty-first-century technologies are global not just in their distribution, but also in their consequences. Pathogens, AI systems, computer viruses, and radiation that others may accidentally release could become as much our problem as theirs. Agreed reporting systems, shared controls, common contingency plans, norms, and treaties must be pursued as means of moderating our numerous mutual risks.”
In some areas, unilateral American leadership can provide a large part of the answer to the problem of providing public goods. For example, the US Navy is vital to policing the law of the sea and defending freedom of navigation in the South China Sea. But when it comes to new transnational issues, such as climate change and pandemics, success will require the cooperation of others.
While American leadership will be important, the US cannot solve these problems by acting alone, because greenhouse gases and viruses do not respect borders or respond to military force.

No country — China included — is about to displace the US in terms of overall power resources in the next few decades.

Joseph S. Nye Jr.

In the domain of ecological interdependence, power becomes a positive-sum game. America cannot simply think in terms of its power over others but must also consider its power with others. On many transnational issues, empowering others can help America to achieve its own goals; the US benefits if China improves its energy efficiency and emits less carbon dioxide. So, America has to cooperate with China while also competing with it.
Some worry that China will link cooperation on tackling climate change to US concessions in traditional areas of competition, but this ignores how much China has to lose if Himalayan glaciers melt or Shanghai is flooded.
It was notable that Chinese President Xi Jinping participated in Biden’s recent global climate conference despite bilateral tensions over US human-rights criticisms of China.
A key question when gauging the success of Biden’s China policy will be whether the two powers can cooperate in producing global public goods, while competing strongly in other areas. The US-China relationship is a cooperative rivalry, in which the terms of competition will require equal attention to both sides of the oxymoron. That will not be easy.

  • Joseph S. Nye Jr. is a professor at Harvard University and author of "Do Morals Matter? Presidents and Foreign Policy from FDR to Trump" (Oxford University Press, 2020). Copyright: Project Syndicate
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