Cooperation, Competition and Understanding Coopetition

The many economic and technological strengths of China and USA 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 USA 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 mutual recriminations over technology, technology transfer and national and corporate security.

Strategic competition between US 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 USA and the struggle for technological supremacy in 5G and AI (exemplified by the disputes over US 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 USA respond to these overlapping crises will shape the future of global security cooperation.

The Cataclysmic Cost of the SARS-CoV-2 Pandemic

The SARS-CoV-2 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 USA, and associated international organisations, in mitigating these disasters will determine global stability and security in the 2020 decade.

The Sixteen Trillion Economies

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:  

• 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 
• Indonesia $1.1

40 Days and Counting

In 40 days [article written on 24th September 2020] on November 3, the convulsive US Presidential Election will take place. “40 days” has religious, symbolic and cultural meaning (for example, the Christian calendar and the Arabic proverb that explains that 40 days is required to understand a people with whom you live).

The most acrimonious and divisive US Presidential election since 2000 will shape the changing contours in the crucial Sino-US relationship, bilaterally and globally. 

The Unequal Spread and Impact of SARs-CoV-2

Although the reporting of Covid-19 death tolls and infections in China and the USA is fraught with political and medical controversy, Covid-19 deaths in the USA (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 USA (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 3rd quarter growth rate of some 5%. By contrast, the consensus among economists is that the USA will experience declining growth of more than 4% in 2020. 

The uncertainty accompanying economic activity in the USA (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 US in an Abnormal World

The Changing Balance of International Economic Power and the Rise of China

The agreements signed at Bretton Woods, New Hampshire USA, 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[1] and the West[2] to foster new mechanisms for collectively sharing information to promote optimal decision-making in support of fragile human existence and practical and holistic security. 

The Cyber and Technological Challenge

In the cyber sphere, 2020 has intensified the technological R&D competition between China and the USA 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 USA).

Energy, Strategic Minerals and Tradeable Goods

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 USA and Russia over energy competition (incorporating increasing US 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 USA and Russia in strategic and resource competition.

Climate Change and Environmental Destruction

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 USA 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. 

 

[1] The Asian Infrastructure Investment Bank (Beijing), Asian Development Bank (Manila), Shanghai Cooperation Organisation (Beijing)) and the BRICS Investment Bank;

[2] 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)