America and China: Long-Term Friends or Enemies?
US President Donald Trump and Chinese President Xi Jinping at a bilateral meeting. (Pablo Martinez Monsivais/AP)
By John F. Copper

America and China: Long-Term Friends or Enemies?

Jan. 24, 2019  |     |  0 comments

Since the beginning of Donald Trump’s presidency, relations between the United States and China have witnessed extremes in friendliness and cordiality on the one hand and hostility and antagonisms on the other hand. The recently coined term frenemy describes the relationship.

In 2018, especially toward the middle of the year, US-China relations turned hostile over the issues of the US trade deficit with China and China’s alleged pinching of US intellectual property and technology. Some observers opined this situation would worsen and would lead to permanent alienation and even war.

In counterpoint, these two problems seem likely to be resolved and the tension between the US and China reduced immeasurably. The US and China will become cordial again and their relationship will be a working one to the benefit of both.

Which is it?

The key question that needs to be asked and answered is: What are the long-term trends relevant to the two countries being friends or foes? Hence, one must look at national power drifts, especially the ingredients of power and influence, to predict how America and China will get along, or not, in the future and how that will affect them and the international system.

One thing that is immediately clear is that the two, the US and China, are the dominant world powers and that will be even more true in the future. Nobody else is seriously in the game.

How so? By almost all of the metrics used to gauge world power status, the bloc or nations competing with the US and China, namely the European Union, Japan and Russia, are falling behind. Moreover, there is little hope any of the three will be able to reverse this trend.

Economic growth as measured by the gross domestic product (GDP) of a bloc or nation is the most commonly cited criteria for anticipating future world power rankings. The Economist predicts Western Europe’s growth in 2019 to be 1.7 percent. (Germany, which is said to be the dynamo of Europe’s growth) will see a 1.8 percent increase. Japan is forecast to record only 1.4 percent growth. Russia will see 1.8 percent expansion.

The United States, which owns the world’s largest economy, is expected to grow at a rate of 2.2 percent. China is second in economic size. Its growth is projected to be 6.2 percent, more than threefold the world power wannabes.

Perceptions also matter. According to a World Bank survey (in 2017), 42 percent of people in the world see the US as the world’s top economic power while 32 percent opine it is China. Only 9 percent think it is the European Union and 7 percent view it as Japan.

Looking ahead, the International Monetary Fund projects China will have the planet’s largest economy in 2030. The US will be number 2. Japan will be number 4. Russia will be number 7; Germany will be 8. Projecting further into the future, in 2050, China will be number 1 by a bigger margin, Japan will be number 7, Russia will be 8th, Germany will rank 10.

According to Defense News, in security spending, the usual way of measuring a nation’s military strength, the US leads others by a big margin, double Europe. China, as a nation, is the second largest. Russia is roughly one-tenth the US and below Saudi Arabia. Japan is around one-fifteenth the US

Says Statista, funding research and development, another important metric of global power, the United States and China together account for half of the world’s spending. China budgets two and a half times Japan and four times Germany for R&D. The European Union lags both the US and China, though not too far; however, its increases are only around 2 percent, below the US, Russia and Japan’s increases and far lower than China’s, which is in the range of 17 to 18 percent.

In spending on research that is critical to future national power, especially in areas such as artificial intelligence and quantum computers, China leads. The US is second. Others are way behind.

The US and China own all of the large Internet companies. (11 are in the America, 9 are in China.)

Land, population, political systems and diplomacy — the traditional measures of national power — are not seeing any meaningful trends. The US and China are the largest countries in the world in terms of land area in a climate zone where human activity is meaningful, though Russia and Canada are bigger. In population China is first in the world; the US, following India, is third. There is some discussion about the current failings of democratic systems and the Beijing “consensus” winning the race; but it seems too early to arrive at conclusions about this since governance is changeable.

Taking cognizance of the above it seems clear the global system is dominated by two powers. In other words, it is a bipolar one.

The question then is: Which power, the US or China will be the stronger, or the predominant one, in the future? They are and will be in the future competing with each other for global power status.

One can best formulate an answer to this question by examining at the advantages and disadvantages each has vis-à-vis the other and trends therein.

First, China’s assets or advantages.

China has much larger financial assets than the United States measured in foreign exchange on hand — over USD 3 trillion (not counting individual and family savings). The US has a debt approaching USD 22 trillion. Over USD 6 trillion is owned to foreigners, China being the largest holder.

China’s large financial holdings means it will gain further sway over global institutions and increase its control over the global financial system as a whole. It means China can provide more foreign aid and investments to other countries and thus influence developing countries. As I detail in my recent three-volume book on the subject, entitled China’s Foreign Aid and Foreign Investment Diplomacy, China is fast doing both.

China has recently become the world’s largest nation in manufacturing and trade. Both give China a leg up in global economic influence. Also, China continues to grow in both realms.

Having money also enables China to fund increasingly larger defense budgets and obtain more modern weapons. Likewise, it is able to pay for more scientific research and translate research into new products and thereby sustain a favorable trade balance.

Looking at the advantages and disadvantages the US and China have vis-à-vis the other suggests their contest for power is quite asymmetric. This means they can cooperate on many fronts without competition becoming a source of conflict.

China can also afford to send its students abroad to America’s and Europe’s best (and most expensive) colleges and universities. Its students in the US number more than 350,000 or around one-third of the total foreign student population in America. Furthermore, most are studying engineering and the hard sciences, which analysts of national power say contributes more than students studying social sciences and the humanities that are the majority in the United States.

Chinese nationalism, which is largely a reaction to China’s “century of humiliation” at the hands of the West and its citizens’ desire to excel in response to this, while its leaders use patriotic sentiment to win support for their strategies to improve China’s power status in the world, is an advantage to China in competing with the United States.

Chinese even say that the racial discrimination they face in the United States when their students apply for admission to America’s best colleges and universities, the race bias practiced by Hollywood in making TV shows and movies, and the liberal Western media castigating China and Chinese, make them more driven to work hard and succeed.

What are America’s advantages?

The US economy, measured in absolute terms, is the largest in the world. It is almost half against China’s nominal gross domestic product. According to the Wall Street Journal, GDP per capita in the US is USD 62,000 annually, compared to China’s just over USD 10,000. This means that the US does not need to grow as fast as China since its population is already rich and China’s is not, and China must sustain higher growth rates to keep its citizens happy.

The US is growing faster than other developed countries. America can thus afford to spend more (and does) on defense and R&D. Further, since its currency is the main international tender, it can extend aid and credits simply by printing more dollars. Other nations cannot do this.

Arguably the largest asset the United States possesses vis-à-vis China is the fact it has allies throughout the world that would help America in the event of a power struggle with China or in case of a war. The US has military alliances and bases throughout the planet (800 in 70 countries according to Politico magazine). The UK, France and Russia combined have bases in 30 countries. China has very few, perhaps not even one that is meaningful.

Projected increases in America’s defense spending under President Trump are also bigger than China’s. America’s military training is better, and its armed forces have been at war recently and thus are more seasoned fighters than China’s (which have not been involved in conflict for some time).

Thus, the military power balance between the US and China favors America by a significant margin. Most experts believe this will not change for ten years or perhaps much longer. China’s leaders have confirmed this.

Another realm where the United States excels, even dominates, is in soft power, which Joseph Nye, Jr. defines in his book Soft Power: The Means to Success in World Politics, as the “ability to get what one wants through attraction rather than coercion or payments.”

America exerts global influence through its prominent role in films, music, fashion, music, the arts, sports, the media and promoting the English language. All of these contribute to America’s soft power that far exceeds that of other countries. China is but number 21 in a US News and World Reports list of countries ranked by soft power.

America’s influence in the media is especially strong. Its companies constitute the three largest in the world: Alphabet (Google), Comcast and Disney. America has 8 of the 10 largest (the non-US two are in Japan and Holland).

The US and China also face distinct disadvantages in dealing with the other.

China’s economy is in the unenviable position of being sandwiched and squeezed between countries that are more developed and have a higher level of technology and productivity and less developed countries that have considerably cheaper labor. China has coped well so far; but that cannot be ensured in the future.

President Trump imposing tariffs on China’s imports has hurt China’s economy seriously. Exports have dropped. Its stock market has fallen. Citizens’ confidence has been affected adversely. Future growth seems uncertain. Certain companies, including some of China’s biggest and best, have suffered.

Chinese politics have become less stable. Political (and social) tranquility as well as the Chinese Communist Party’s credibility depends on continued good GDP growth and that is now being questioned.

For the US, its financial situation, especially its large debt, creates serious worry. Continually increasing its debt is patently unsustainable. Yet the problem continues to get worse. America’s financial problems suggest a dim future.

The costs of its legal system, crime, welfare and illegal immigration are very burdensome and are getting worse. This makes the interest on the national debt a heavy weight on the economy and the society. Soon America will not be able to afford its defense spending or devote more money to R&D.

America is badly divided politically, and decision-making is dysfunctional. Many feel the system is unfair; some say it is in a state of collapse.

Looking at the advantages and disadvantages the US and China have vis-à-vis the other suggests their contest for power is quite asymmetric. This means they can cooperate on many fronts without competition becoming a source of conflict.

Even more poignantly, Henry Paulson, former secretary of the treasury and author of Dealing with China: An Insider Unmasks the New Economic Superpower, says their need to cooperate to make the international system work is compelling. In other words, their relationship is “too big to fail.”

One may conclude that the two-pole system made up of a powerful US and a robust China, the two being far ahead of other powers, or bipolarity, worked during the Cold War; out of control conflict did not occur. Arguably it is a better system than a multipolar one, notwithstanding the fact many in the Western media and a host of national leaders favor multipolarity. Top international relations theorists such as Kenneth Waltz (author of The Theory of International Politics) and many other realist thinkers say multipolarity is the least stable system while bipolarity is the most stable. Unipolarity, of the immediate post-Cold War days, of course, has few supporters.

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