The intensification of competition between the United States and China has received great attention in recent years. American directione China has become more passive during this period, as anger mounts over the disruptions caused by the COVID-19 pandemic, Beijing’s trampling of Hong Kong’s autonomy, human rights abuses in Xinjiang, and job losses in China.
Amid this focus on great-power competition, two broader trends in the US-China relationship have received relatively less attention. The first is the widening gap in the overall national power of America and China compared to every other country in the world. The second is the continued heavy interdependence between the United States and China, even in the midst of their growing rivalry. Even on economic issues, where rhetoric and actions around decoupling get the most attention, trade and investment data still stubbornly point in the direction of deep interdependence. These trends will influence how competition between the United States and China is conducted in the coming years.
Separation from the packaging
As America’s unipolarity in the international system wanes, a renewed focus has been placed on the role of major powers in the international system, including the European Union, Russia, India and Japan. Each of these powers has a large population and significant economic or military weight, but as my Brookings Institution colleague, Bruce Jones, did noteNothing has everything. Only the United States and China possess all of these qualities.
The United States and China will likely continue to mobilize a disproportionate weight in the international system moving forward. Their growing role in the global economy is largely fueled by both countries technology sectors. These two countries have unique features. These include world-class research expertise, deep pools of capital, abundant data, and highly competitive ecological innovation systems. Both benefit disproportionately from the effect of clustering around technology hubs. For example, of the approximately 4,500 companies engaged in artificial intelligence in the world, about half of them operate in the United States and a third of them operate in China. According to a widely cited study by PricewaterhouseCoopers, the United States and China are preparing for an acquisition. 70% of $15.7 trillion in windfall profits Artificial intelligence is expected to add to the global economy by 2030.
The United States and China are reinvesting their economic gains to varying degrees in the research and development of new and emerging technologies that they will continue to drive forward. While the US and China’s stay at the forefront of innovation has not been given up indefinitely, it also isn’t clear which other countries might replace them or on what timeline. Total, China’s economy Relative to the steep growth pace of recent decades, it is likely to ease in the coming years, but is unlikely to unravel.
At the same time, the bilateral competition between the United States and China is also increasing. However, increased bilateral friction – at least for now – has not unraveled the deep bonds that have built up between the two forces over decades.
In the economic sphere, trade and investment relations remain important, even as both countries continue to take steps to reduce vulnerabilities from the other side. For example, Chinese regulators have been asserting greater control over when and where Chinese companies raise capital; last in Beijing probe From Didi Chuxing provided by the car booking app, however, the latest example. China’s top leaders have stressed the need for more technological “self-sufficiency”, and are pumping billions of dollars of state capital into this direction. Meanwhile, US officials are seeking to restrict US investments from going into Chinese companies linked to the military or surveillance sectors. Securities and Exchange Commission audit From initial public offerings of Chinese companies and their focus on ensuring Chinese companies meet US accounting standards could lead to some Chinese companies currently listed Removal from US stock exchanges. Both countries have sought to decouple supply chains around sensitive technologies with national security and, in the US case, human rights dimensions. US officials have sought to raise awareness of the risks facing US companies doing business in them Hong Kong And Xinjiang.
However, trade and investment ties between the United States and China remain strong. In 2020, China was the largest commodity trading partner of the United States, the third largest export market, and the largest source of imports. Supported exports to China estimated 1.2 million jobs In the United States in 2019. Most of the American companies operating in China reported their presence committed For China market in the long run.
American investment firms were increase their sites In China, after a global trend. Black stoneAnd JP Morgan Chase, Goldman Sachs, and Morgan Stanley All have increased their exposure in China, matching similar efforts before UBSAnd Nomura HoldingsAnd Swiss credit, And Axa. rhodium group estimates That US investors own $1.1 trillion in shares issued by Chinese companies, and that there are up to $3.3 trillion in two-way US-China stocks and bonds at the end of 2020.
One of the points of economic relations between the United States and China that has deteriorated in recent years is the influx of China investment in the United States. This was in large part a product of China’s tighter capital controls, the Chinese government’s increased scrutiny of its overseas companies’ investments, and enhanced US scrutiny of Chinese investments for national security concerns.
Another area of interdependence between the United States and China is knowledge production. As American-Chinese technologist Matt Sheehan note, “With the rise of Chinese talent and capital, technological know-how between the United States and China is now being exchanged between private companies and among individuals.” Leading technology companies in both countries are building research centers in the other countries. Ali BabaAnd Baidu, And Tencent They all opened research centers in the United States, just like An appleAnd MicrosoftAnd Tesla, and other major US tech companies that rely on engineering talent in China.
In Scientific Collaboration, The Nature Index rank Joint research between the two countries as the world’s most fertile academically. Scientific cooperation between the United States and China grew at an average rate of more than 10% per year between 2015 and 2019. Even after the global spread of COVID-19, American and Chinese experts have cooperated more over the past year than the previous year. Five years combined. This has led to more than 100 common articles in leading scientific journals and frequent co-appearances in science-focused workshops and webinars.
China is also the largest source of international students in the United States. In the year 2019-20, it’s over 370,000 Chinese students In the United States, they represent 34% of international students at colleges and universities. So far, many of the best Chinese students have stayed in the United States after graduation and contributed to the scientific, technological and economic development of America. It remains to be seen if this trend will continue.
The scale of US and Chinese interests involved is likely to lead to sobriety over time in Washington and Beijing regarding how the relationship is managed. It is unlikely that the focus of US policy for the foreseeable future will be to “defeat” China or force the collapse of the Chinese Communist Party. Instead, the focus will be on taking steps at home and with partners abroad to enhance America’s long-term competitiveness against China. At the same time, US leaders will continue to push their Chinese counterparts to better treat their fellow citizens. Such efforts serve to define America’s self-identity as champions of values.
The dense networks formed by the commercial, financial, scientific, and academic ties between the United States and China will make it difficult for one side to harm the other without harming itself in the process. Just like Jo Nai did written, “America could separate security risks like Huawei from its 5G communications network, but trying to reduce all trade with China would be very costly. Even if economic disintegration were possible, we cannot separate environmental interdependence that is governed by the laws of biology and physics, not politics” .
President Joe Biden is likely to use the challenges posed by China as impetus for his domestic resilience agenda. He is not, however, a pro, and is unlikely to limit his flexibility by drawing the world in permanent black and white dividing lines. The Biden team understands that it will be difficult to make progress on serious global challenges such as climate change, pandemics, and an overall global economic recovery without engaging with non-democratic countries.
Significant near-term improvements in US-China relations are unlikely, unless there is an unexpected moderation in Beijing’s behavior. At the same time, the relationship is unlikely to turn into outright hostility, except for an unexpectedly dramatic event, such as a Chinese act of aggression against an American security partner.
Relations between the United States and China will be tense and tense. Neither side is likely to make concessions in the service of smoother relations. At the same time, the balance of interests on both sides is likely to dominate antagonistic impulses, putting the relationship in a state of intense competition that co-exists with a mutual awareness that both sides will be affected – for good or for bad – by their ability to deal. common challenges.