The many economic and technological strengths of China and the United States should be enhanced by coopetition strategies that will promote positive sum bargaining payoffs and diminish the ever-present threat of negative sum outcomes for China and the U.S. in shaping their strategic interests.
Promoting alliances and reducing antagonisms will be difficult to foster while the Trump Administration continues to promote the imaginary benefits of autarky (emphasising economic independence, rule of law according to national interpretation and assertive self-sufficiency) and engages with China in recriminations over technology, technology transfer and national and corporate security.
Strategic competition between U.S. and China incorporates highly visible areas of tension in the South and East China Seas, bilateral trade tensions over the scale of Chinese exports to the U.S. and the struggle for technological supremacy in 5G and AI (exemplified by the disputes over U.S. national security and Huawei and TikTok).
Global risks in the time of pandemic
In 2020, the hierarchy of global risks has elevated the existential threats posed by further (even more lethal) pandemics and the ever increasing evidence of Climate Change and global warming (the growing frequency of extreme weather events (illustrated by wildfires in California. the melting of the Arctic summer Ice, loss of species and habitats). The accompanying water, food and energy insecurity propels migration and regional conflict. How China and the U.S. respond to these overlapping crises will shape the future of global security cooperation.
The COVID-19 global pandemic is maintaining its deadly and unrelenting grip in many countries and regions (but conspicuously not China) The prognosis remains uncertain and profoundly insecure with extraordinary economic contraction occurring on both sides of the Atlantic and across the globe. Global GDP may decline by a barely imaginable $15-20 trillion during 2020 to 2023.
Across the globe, many developing and fragile economies are increasingly vulnerable to the pandemic with escalating global poverty, famine, disease and social and economic misery intensifying violent extremism and regional conflicts.
The roles played by China and the U.S., and associated international organisations, in mitigating these disasters will determine global stability and security in the 2020 decade.
To understand the scale and catastrophic impact of the global economic contraction, 2019 nominal global GDP is estimated at $90 trillion with the 16 principal contributors to this total (national GDP above $1 trillion) comprising: the United States $21.5, China $14.2, Japan $5.2, Germany $3.9, India $2.9, UK $2.8, France $2.7, Italy $2.0, Brazil $1.9, Canada $1.7, Russia $1.6, South Korea $1.6, Spain $1.4, Australia $1.4, Mexico $1.3 and Indonesia $1.1.
On November 3, the convulsive U.S. Presidential Election will take place. The most acrimonious and divisive U.S. Presidential election since 2000 will shape the changing contours in the crucial Sino-U.S. relationship, bilaterally and globally.
Although the reporting of COVID-19 death tolls and infections in China and the U.S. is fraught with political and medical controversy, COVID-19 deaths in the U.S. (above 200,000) are strikingly larger than the official estimate of less than 5,000 for China. Notwithstanding methodological disagreements and arguments over underreporting, with a population of 1.4 billion China has clearly hugely outperformed the U.S. (with 331 million inhabitants) in managing and suppressing the spread of the COVID-19 virus.
The 2020 economic consequences of COVID-19
As autumn unfolds and the winter months approach, China’s economic resilience (increasingly reflected in consumer spending as well as factory output) promises to deliver a third quarter growth rate of some 5 percent. By contrast, the consensus among economists is that the U.S. will experience declining growth of more than 4 percent in 2020.
The uncertainty accompanying economic activity in the U.S. (and the UK) will depend on the delicate balancing of the speed and intensity of the second wave of infections and the realistic development and implementation of vaccines and prophylactic treatments.
Convergence and divergence in China and U.S. in an abnormal world
The agreements signed at Bretton Woods, New Hampshire of the U.S., in 1944 laid the foundations for Western post-war global institutions in trade, security and development. At the end of this decade, China began its remarkable economic and political ascendancy culminating in its own increasingly global investment and financial institutions.
In 2020, there is a paramount need for the pre-eminent international organisations in Asia and the West to foster new mechanisms for collectively sharing information to promote optimal decision-making in support of fragile human existence and practical and holistic security.
In the cybersphere, 2020 has intensified the technological R&D competition between China and the U.S. in all dimensions of AI and digital computing and gaming (as evidenced by the ongoing bitter debate over the future of TikTok and WeChat in the U.S.).
China continues to invest domestically and abroad in the production and trade in goods, energy flows and strategic minerals (including rare earth elements such as lithium).
China’s growing infrastructure investment in roads, rail and ports (the New Silk Road) across Central Asia, Pakistan and Afghanistan and the Middle East, demonstrates the potency of China’s economic ambitions over land and sea.
The Strategic Straits (notably Malacca but also Bab-El Mandeb and Hormuz) highlight the corridors vital to support China’s oil, gas and electrical energy needs (and the planned reduction in coal production and consumption).
The interplay between China, the U.S. and Russia over energy competition (incorporating increasing U.S. self-sufficiency with LNG production and exports, the China-Russia pipelines and the continuing dependency of Western Europe on Russian gas) reveals a crucial dimension of strategic competition. Elsewhere, the Arctic and the High North embodies a region of growing economic importance and international tension for China, the U.S. and Russia in strategic and resource competition.
Environmental destruction is the source of holistic insecurity created by the disruption and migration of species and people from fragile habitats (sowing the seeds of pandemics, violence and hunger) and accelerating noncooperative nationalism and dangerous insecurity.
These challenges demonstrate the need for China and the U.S. to support the urgent revival and reinvigoration of global leadership and international cooperation. Without this leadership and cooperation, the present disastrous pandemic will accelerate into a catastrophic collapse of global security and the impoverishment of billions of the global population.
The Asian Infrastructure Investment Bank (Beijing), Asian Development Bank (Manila), Shanghai Cooperation Organisation (Beijing)) and the BRICS Investment Bank;
Relevant UN development agencies (Food and Agriculture Organisation and the World Food Program), the IMF, World Bank, OECD, World Health Organisation, the International Organisation for Migration, the Intergovernmental Panel on Climate Change, the International Energy Agency and notably NATO.
The author is former Senior Defence Economist and Adviser to the Secretary General, NATO (2001-2014) and Lead for Economic Security, NATO Strategic Foresight Analysis Programme (2014-2020)