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But even if SNAP cuts or additional requirements passed through the House, Senate Agriculture Committee Chairwoman Sen. Debbie Stabenow (D-Mich.) said they won’t make it through her chamber.

“The Chairwoman has been very clear. We are not going to cut SNAP benefits in the 2023 Farm Bill,” a staffer said in a statement. “Imposing new, harsh, bureaucratic work requirements ignores the rigorous requirements that are already in place, and it would only strip benefits away from those who need them.”

Food assistance programs make up about three-quarters of the must-pass farm bill’s expenditures, which must be reconsidered and approved every five years, along with subsidies for farmers and conservation programs.

This year’s debate over SNAP benefits is setting the stage for a fight much like the one that accompanied the 2018 farm bill, when Republicans insisted on increasing work requirements to receive SNAP benefits. Democrats resisted, and the bill was ultimately passed without the requirements.

A former chair of the House Agriculture Committee is optimistic that Congress will pass the next farm bill on-time. Representative Frank Lucas, an Oklahoma Republican, says he believes it is possible to finish the 2023 Farm Bill in 2023.

Lucas; “One of the most important things we had to do was pass a piece of legislation dealing not only with the debt ceiling but setting spending levels for the next few years. The allocation process in the House and Senate is going on. As we wait for those final numbers in the House, Chairman Thompson is now moving us in the direction of not just hearing here in D.C., but also field hearings around the country laying the groundwork.”

Even amid today’s tumultuous politics, Bennet expressed confidence that he and his colleagues would produce a farm bill that reflects the collaborative legacy of the Agriculture Committee.

“I absolutely believe we will reject partisanship in the Agriculture Committee. We’ve done it before. I think we’re going to do it again,” the senator added.

Leaders of the Senate and House Agriculture committees say the bill effectively removes a key barrier to passing a new farm bill by taking the issue of Supplemental Nutrition Assistance Program work requirements off the table.

The bill would increase the maximum age for SNAP work requirements from 49 to 54, but also add exemptions for the homeless, veterans and young people under 24 who have left the foster care system. The Congressional Budget Office estimates 78,000 people will gain benefits in an average month due to the new SNAP exemptions, which more than offset the impact of the increased age limit.

Despite the more-than-challenging circumstances, Senate Ag Committee Chairwoman Debbie Stabenow is confident the farm bill will pass.

“We will get one,” Stabenow told Michigan Farm News during a recent visit to Michigan State University to celebrate its selection as one of 12 USDA Regional Food Business Centers.

Don’t look now, but the divided Congress could pass a major climate change bill.

No, it’s not version 2.0 of the Inflation Reduction Act, the Democrats’ sweeping climate and health-care package. Rather, the farm bill — the five-year reauthorization of hundreds of billions of dollars in agriculture and food programs — could help farmers tackle the climate crisis while feeding the nation.

Some past farm bill cycles have taken years, and some think this one will, too. But many insiders say the evidence points toward swift negotiations and passage. GOP lawmakers typically spend time advocating for cuts to SNAP and stringent work requirements—and that effort has already begun—but newly appointed House Agriculture Chairman G.T. Thompson (R-Pennsylvania) has pushed back on some of his fellow Republicans’ rhetoric and expressed openness to climate-ag programs he once railed against.

Meanwhile, veteran Senate Agriculture Chairwoman Debbie Stabenow announced that she will not seek reelection next year; with this as her last farm bill cycle, she will likely up the ante on passing a farm bill that cements her legacy.

The stakes are high as Congress begins serious discussions to reauthorize the farm bill, which expires at the end of September 2023. Among other things, this legislation represents a major opportunity to enable private landowners, farmers, ranchers, and rural communities to take action to address the crises of climate change and nature loss.

In fact, in a divided Congress where House majority leadership has staked out an obstructionist position on most climate action, the must-pass farm bill may represent the only meaningful opportunity to make progress on these issues in the 118th Congress. Conversely, if extreme positions prevail and Congress strips away farm bill program investments made in the 2022 Inflation Reduction Act, America will take a massive step backward on climate, conservation, and rural prosperity.

The future of American food production is up for grabs this year.

With the nation’s farm bill expiring this September — along with a wide array of crucial programs that put food on American plates — lawmakers are on the clock to craft a farm bill that can pass the divided Congress.

(Mark Zandi is chief economist of Moody’s Analytics, where he directs economic research. Moody’s Analytics, a subsidiary of Moody’s Corp., is a leading provider of economic research, data and analytical tools. Dr. Zandi is a cofounder of Economy.com, which Moody’s purchased in 2005. Dr. Zandi is on the board of directors of MGIC, the nation’s largest private mortgage insurance company, and is the lead director of policyMap, a data visualization and analytics company, used by policymakers and commercial businesses. He is a trusted adviser to policymakers and an influential source of economic analysis for businesses, journalists and the public. Dr. Zandi frequently testifies before Congress and conducts regular briefings on the economy for corporate boards, trade associations, and policymakers at all levels. Dr. Zandi is the author of paying the price: Ending the Great recession and Beginning a New American Century, which provides an assessment of the monetary and fiscal policy response to the Great recession. His other book, Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis, is described by The New York Times as the “clearest guide” to the financial crisis. Dr. Zandi is host of the Inside Economics podcast. Dr. Zandi earned his BS from the Wharton School at the University of pennsylvania and his phD at the University of pennsylvania., “The Debt Limit Drama Heats Up,” pg online @ https://www.moodysanalytics.com/-/media/article/2023/debt-limit-drama.pdf //um-ef)

The Limit, Save, Grow Act of 2023 would cut into near-term economic growth if passed into law. Compared with a scenario that includes a clean debt limit increase and no other significant changes to fiscal policy under current law, real GDp in the year ending in the fourth quarter of 2024 would be 0.65 percentage point lower (see Table 2).5 That is, in the Clean Debt Limit scenario, real GDp is expected to grow 2.25% in the year compared with 1.6% if Speaker McCarthy’s legislation becomes law. While the economy skirts recession in both scenarios, recession risks are uncomfortably high, with a consensus of economists and many investors and business executives expecting a downturn beginning late this year or early next. The timing of the government spending cuts in the Limit, Save, Grow Act is thus especially inopportune as it would meaningfully increase the likelihood of such a downturn. Indeed, under the legislation, GDp growth is so weak that employment declines in the first three quarter of 2024, and the unemployment rate rises by more than a percentage point to 4.6% by the fourth quarter of 2024. Compared with the Clean Debt Limit scenario, by year-end 2024, employment is 780,000 jobs lower, and the unemployment rate is 0.36 percentage point higher. The significant government spending cuts in the Limit, Save, Grow Act are substantial headwinds to nearterm economic growth. The cuts reduce nondefense outlays by $120 billion in fiscal 2024 compared with the Clean Debt Limit scenario, equal to about half a percentage point of GDp. The multipliers on this spending—the change in GDp a year after a change in spending—are estimated to be just over 1, as the programs suffering budget cuts are essential government services and tend to benefit lower-income households that quickly spend any support they receive from the government. Adding to the economic headwinds created by the legislation is the considerable uncertainty created by having to address the debt limit again a year from now. Given that 2024 is a presidential election year, that future debt limit drama may well be even more heated than the current one. This is sure to weigh on investor, business and consumer confidence and thus economic activity.

(Sam, “How spending cuts will hit the U.S. economy,” pg online @ https://www.politico.com/newsletters/morning-money/2023/05/30/how-spending-cuts-will-hit-the-u-s-economy-00099190 //um-ef)

The economy is still at risk of a recession. The budget cuts included in President Joe Biden and House Speaker Kevin McCarthy’s deal to raise the debt ceiling aren’t deep enough to push it over the edge. Republicans insisted for months that any deal to raise the debt limit must come with sharp reductions in government spending. The U.S. economy needed a strong dose of fiscal discipline to reverse the inflation that’s been a hallmark of Biden’s economy for more than a year, they argued. But there was no appetite from either party to address big ticket items like Social Security, Medicare or defense spending. And once it became clear that the White House would largely block any raid on funds appropriated through Biden’s landmark legislative accomplishments — the Inflation Reduction Act and CHIPS — it assured that the macroeconomic impact of any deal would be negligible. Brian Riedl, a senior fellow at the Manhattan Institute and former chief economist to retired Ohio Republican Sen. Rob Portman, on Sunday said the headline caps on regular, non-emergency discretionary spending have so many “caveats and asterisks [that] may render these figures mostly meaningless.” (That underscores why the deal has raised the hackles of many policymakers on the GOP’s right flank — including Florida Gov. Ron DeSantis.) The cuts amount to “a rounding error” of GDP, Riedl told MM. Moody’s Chief Economist Mark Zandi, whose warnings of potential damage to the economy from the GOP’s proposed cuts were trumpeted by the White House last month, said the deal’s macro effects would be muted. “It’s not nearly as draconian as the Limit, Save, Grow Act,” Zandi said in an interview. The limits on discretionary spending could cost the economy about 120,000 jobs — raising the unemployment rate by about a tenth of a percentage point — and reduce gross domestic product by less than one-fifth of 1 percent, he said. That’s a far cry from the millions of job losses and sharp economic contraction the White House claimed would be imminent if the GOP got everything it wanted. While Biden and McCarthy’s deal will put weight on a vulnerable economy, it’s not going to create enough drag to push it into a recession, Zandi said. “The timing is inopportune given how fragile the economy is, and how high recession risks are, but I don’t think this is what does the economy in,” he said. To be sure, the economy is still in danger. Ratings services could downgrade Treasury securities even if Biden signs a debt limit deal in time. That will make borrowing costs more expensive and could send markets reeling. Funds could flow out of banks once Treasury issues new debt, potentially creating even more havoc for a sector that withstood turmoil this spring.

(Jeannie Baumann, Reporter, “House GOP Spending Freeze Would ‘Devastate’ Medical Research,” pg online @ https://news.bloomberglaw.com/pharma-and-life-sciences/house-gop-spending-freeze-would-devastate-medical-research //um-ef)

Health research funding will face some of the steepest cuts in a decade if the House Republicans’ agreement sets next year’s spending at 2022 levels, potentially slashing billions of dollars in medical research. House Republicans agreed to hold fiscal 2024 government funding to their fiscal 2022 levels as part of the deal reached by Rep. Kevin McCarthy (R-Calif.) to secure the speaker’s role after a historic 15 votes stretched over several days. Such a move would lead to about a 7% cut from funding total for fiscal 2023. Democrats will have plenty of opportunities to chip away at those efforts, however. “Going back to ’22 spending levels, that’s obviously hard,” Sudip Parikh, chief executive officer of the American Association for the Advancement of Science, said. “Our US previous investments put us on the cusp of all these amazing treatments—mRNA, CRISPR, gene therapy. Those treatments are going to be discovered and developed somewhere, whether it’s here in the US or somewhere else. I hope it’s here in the US.” Spending caps usually mean curbs for discretionary programs, since about two-thirds of the budget encompasses mandatory funding of defense, Social Security, and Medicare. In the health care area, discretionary dollars fund federal programs in public health, and research on medicine, health outcomes, and physical sciences. “Generally, any kind of cuts to the top lines are not good for research,” said Ellie Dehoney, vice president of policy and advocacy at Research!America.

The idea of the nation's power grids becoming the next battleground for cyber warriors could make hacking into consumers’ credit card accounts and personal information seem like child’s play. While U.S. power companies are likely targeted by foreign governments and others in increasingly sophisticated breaches, actually shutting off the lights and causing chaos is far more complicated than many pundits make it seem. Dan Scali, senior manager of industrial control systems at Mandiant, a cybersecurity consulting arm of FireEye (), explained that while cyber criminals may gain access to power and utility data systems, it doesn’t necessarily mean the result will be a power outage and a total takedown of power grid control systems. In other words, the power grid is controlled by more than just a panel of digital buttons. “Losing the control system is bad from the perspective that it takes you out of your normal mode of operations of being able to control everything from one command center, but it doesn’t mean you’ve lost control or all the lights go out [in the city],” Scali explained. While many of the systems have been modernized to include digitized control panels, if a hacker were to infiltrate the system, a utility worker could still have the ability to manually control the machines by flipping a switch, pushing a button, or tripping a breaker. As the world saw with the recent attack in Ukraine, which caused a blackout for 80,000 customers of the nation’s western utility, the biggest problem may be ensuring the power grid’s control systems are not vulnerable to cyber break ins. The January attack in Ukraine was likely caused by a corrupted Microsoft Word attachment that allowed remote control over the computer, according to the U.S. Department of Homeland Security. Scali said there was no evidence from the incident in Ukraine that the hacker’s malware was able to physically shut down the power. “It wiped out machines, deleted all the files. Kill disk malware made it impossible to remotely control things. It caused chaos on the business network, and the area where control system operations sat. But the attacker, we believe, would have had to actually used the control system to cause load shedding, which caused the power to go out, or trip breakers to cause the actual problem. Malware itself didn’t turn the power out,” Scali said. He said what most likely happened in that incident was the hacker stole user credentials and logged into the system remotely. The bottom line: Yes, a similar event could happen in the U.S. And corporate America is concerned. A recent survey released in January on the state of information security, conducted by consulting firm Pricewaterhouse Coopers, showed cybersecurity as one of the biggest concerns among the top brass at U.S. power and utilities firms. Part of the problem, Brad Bauch, security and cyber sector leader at PwC said, is the interconnectedness of the industry’s tools. “Utilities want to be able to get information out of [their] systems to more efficiently operate them, and also share that information with customers so they have more real-time information into their usage,” he explained. While allowing access to their own consumption data allows the companies to give their customers more of what they want, it also opens up a host of access points for hackers, making the systems more vulnerable than they otherwise would be. But to say that the power grid is susceptible to cyber hackers is a bit of an oversimplification.

A perennial preoccupation of U.S. diplomacy has been the perceived need to reassure allies of our reliability. Throughout the Cold War, U.S. leaders worried that any loss of credibility might cause dominoes to fall, lead key allies to "bandwagon" with the Soviet Union, or result in some form of "Finlandization." Such concerns justified fighting so-called "credibility wars" (including Vietnam), where the main concern was not the direct stakes of the contest but rather the need to retain a reputation for resolve and capability. Similar fears also led the United States to deploy thousands of nuclear weapons in Europe, as a supposed counter to Soviet missiles targeted against our NATO allies. The possibility that key allies would abandon us was almost always exaggerated, but U.S. leaders remain overly sensitive to the possibility. So Vice President Joe Biden has been out on the road this past week, telling various U.S. allies that "the United States isn't going anywhere." (He wasn't suggesting we're stuck in a rut, of course, but saying that the imminent withdrawal from Iraq doesn't mean a retreat to isolationism or anything like that.) There's nothing really wrong with offering up this sort of comforting rhetoric, but I've never really understood why U.S. leaders were so worried about the credibility of our commitments to others. For starters, given our remarkably secure geopolitical position, whether U.S. pledges are credible is first and foremost a problem for those who are dependent on U.S. help. We should therefore take our allies' occasional hints about realignment or neutrality with some skepticism; they have every incentive to try to make us worry about it, but in most cases little incentive to actually do it.

The United States is the most globally competitive nation in the world for the first time since the 2008-2009 global financial crisis, according to a new report. Singapore, Germany, Switzerland, and Japan rounded out the top five. The latest Global Competitiveness Report, conducted by the World Economic Forum, uses a new methodology that aims to better account for the effects of the so-called Fourth Industrial Revolution. WEF, as it’s known, credits three things for U.S. supremacy among 140 economies: market size, innovation ecosystem (including idea generation, entrepreneurial culture, openness, and agility), and stability. The study measured each nation using 98 indicators. “These developments—the Fourth Industrial Revolution and the consequences of the Great Recession—are redefining the pathways to prosperity and, indeed, the very notion of prosperity, with profound implications for policy-making,” wrote WEF founder and executive chairman Klaus Schwab in the report’s preface. “Concerned leaders are grappling for answers and solutions, aiming to go beyond short-term, reactionary measures.” It’s not all sunshine for the U.S., though. According to WEF, there are indications of a weakening social fabric in the States—the nation scored 63.3 out of 100, down from 65.5—and worsening security thanks to a homicide rate that’s five times the average of other advanced economies. What’s more, the U.S. was just 40th place for checks and balances (score: 76.3 out of 100), 15th for judicial independence (79.1 out of 100), and 16th for corruption (75 out of 100). But the American innovation economy is strong. “Once the preserve of the most advanced economies, innovation has become an imperative for all advanced economies and a priority for a growing number of emerging countries. And yet the vast majority of them are struggling to make innovation a meaningful engine of growth,” the report’s authors write. “The results show that there are only a few innovation powerhouses in the world, including Germany, the United States and Switzerland.”

Discontinuities, Productive Incoherence, and the Global Crisis The years leading up to the global crisis, and the crisis itself, precipitated significant and sustained change in the conditions facing EMDEs. Most important among these are an emerging attitude of intellectual uncertainty, pragmatism, and empiricism in the economics profession; a new landscape within which the BWIs operate, where they must negotiate to achieve and sustain influence that now seems precarious, and where they confront demands for governance reforms from increasingly assertive former clients, and potential and actual competition from and cooperation with EMDE institutions; the lack of recovery in Europe, and the fragility of the recovery in the United States; the serious and deepening financial fragilities and slowdowns in growth in EMDEs; and the tarnished image of the Anglo- American financial model. The discontinuities that have emerged in the financial governance landscape can only be understood in the context of these unique circumstances.13 The global crisis spurred expansion in the membership and scope of existing transnational financial governance networks. The Leaders' G-20 replaced the Leaders' G-8 in 2008, and the mandate and membership of the Financial Stability Forum (FSF) was broadened (and the body was renamed the Financial Stability Board, or FSB). It is true that these net¬works have proven to be unimaginative, timid, and impotent, even if they are more inclusive than their predecessors (Helleiner 2014b; Blyth 2013a; Payne 2010; Vestergaard and Wade 2012b).14 Nonetheless, these groups should not be dismissed prematurely, since their future is not fore¬ordained. Indeed, they may emerge over time as forums in which EMDE policymakers are able to promote serious dialogue, build relationships and coalitions, learn from one another, and refine their capacities to maneuver on the international stage and within multilateral institutions (Woods and Martinez-Diaz 2009). Both the continuity and discontinuity views of the G-20 and FSB (and financial governance more generally) are represented in Helleiner's work. The Status Quo Crisis (Helleiner 2014b) sustains the continuity view. Hel¬leiner argues there that the central roles of the U.S. Federal Reserve and the U.S. dollar have not just been unchallenged but have actually been strength¬ened by the crisis. In this account, formation of the G-20 and the FSB (and other initiatives) has not altered the global financial governance architec¬ture to any appreciable degree. Helleiner's book nevertheless concludes with brief speculation about the potential for transformation over the medium term. In other work, both prior to and following his 2014 book, Helleiner speculates that the pressures unleashed by the crisis could ultimately result in more decentralized and fragmented international financial governance. Not least, he and Pagliari argue that current trends in financial regulation point in the direction of "cooperative regulatory decentralization" (see Helleiner 2009; Helleiner and Pagliari 2011). More recently and less equivocally, Hel¬leiner (2016b) argues that policymakers are in fact "stumbling incremen¬tally" toward such a regime—one that involves both increased multilateral cooperation and deepening decentralization—and that the G-20 and the FSB have begun to make more meaningful commitments. The global crisis has had more immediate and significant effects on the IMF. These effects have been complex and uneven (Grabel 2011). On the one hand, the crisis has restored the IMF's relevance, coffers, and central role as first responder to financial distress, just when long-standing critics might have hoped for new institutional arrangements to manage crises that would have displaced or demoted the Fund. In important respects, IMF assistance to countries in distress has followed its well-rehearsed script: many condi- tionality programs continue to stress contractionary macroeconomic policy adjustments, privatization, and liberalization (Gabor 2010; Kentikelenis, Stubbs, and King 2016; Nelson 2014a; Weisbrot 2015). Moreover, EMDEs have secured only very modest commitments for increases in their IMF voting shares. Today the United States and Europe continue to exercise dispropor¬tionate influence at the institution (Lesage et al. 2013). The other side of the ledger is not blank, however. Today there are prom¬ising signs that the neoliberal ideas and prescriptions of important economists and departments at the Fund are being challenged by the global crisis in ways that most observers did not anticipate. In response, IMF economists are learning to live with significant departures from the old script. Most notable in this regard, Fund leadership, research staff, and staff working with countries in distress have moved further and more consistently in the direction of normalizing the use of controls over capital inflows, and even on outflows (Grabel 2011; 2015b; 2017; Chwieroth 2015; 2014; Gal¬lagher 2014; Moschella 2014). There is also evidence of change—uneven and inconsistent though it may be—concerning the IMF's approach to fis¬cal policy during the crisis (Ban 2015; Grabel 2011). Fund economists have developed conditionality programs that, while still harsh, display greater flexibility than was the norm during previous crises. While the Fund con¬tinues to advocate fiscal retrenchment, it also now routinely emphasizes the need for "pro-poor spending" to protect the most vulnerable during crises. The IMF's crisis response strategy is marked by ad hoc measures that reflect important ambiguities within the institution. Strikingly absent here is the unyielding attachment to a global strategy of neoliberalism that marked its interventions over the past several decades. The IMF's geography of influence during the global crisis has been trans¬formed substantially as well. Some of its former clients have emerged as important lenders. At the same time, the institution's client base has largely shifted to the European periphery, and in Europe the IMF appears to be the weakest leg of the European "Troika." Indeed, there is substantial evi¬dence of tension between the IMF and European authorities over important matters such as debt sustainability in Greece—which became particularly evident during the summer of 2015, when a third assistance package for the country was being negotiated—and the most severe forms of austerity in peripheral European economies.15 In a different vein, but in keeping with the idea of discontinuities at the IMF, in 2015 China achieved a long-sought goal of having the IMF include its currency in the SDR. In addition, though the formal voice of EMDEs at the IMF has increased only trivially, the crisis has opened channels for several of these countries, particularly China, to increase their informal influence. Moreover, we find increasing inconsis¬tency between the rhetoric coming from the institution, its research, and its actual practice. As we will see, the rhetoric-research-practice gap reflects something more than public relations imperatives. The gap reveals increas¬ing contestation and even confusion within the Fund. Of equal if not greater importance, productive incoherence is also evi¬denced in the emergence of a far more heterogeneous financial governance architecture. As noted, the East Asian crisis renewed interest in the creation of alternative institutions of financial governance. The drive toward institutional innovation was given far greater force during the global crisis, while the resources necessary to sustain such experiments only became avail-able to rapidly growing EMDEs following the Asian crisis. New innovations have now emerged at the transregional, regional, subregional, bilateral, and national levels. Today we encounter a range of new and expanded reserve pooling arrangements and development and infrastructure banks. Existing institutions evolved in significant ways during the global crisis and have continued to do so (as we will see in the discussion of the Chiang Mai Initiative Multilateralisation, the Arab Monetary Fund, the Development Bank of Latin America, the China Development Bank, and Brazil's National Eco¬nomic and Social Development Bank). At the same time, new arrangements have arisen to rectify perceived failings in the global financial architecture, particularly the shortage of infrastructure financing. The new arrangements are exemplified in twin BRICS initiatives, the New Development Bank and the Contingent Reserve Arrangement, and also in the Eurasian Fund for Stabilization and Development and in the China-led Asian Infrastructure Investment Bank and the One Belt, One Road Initiative/Silk Road Fund. These and other innovations are emblematic of developments and aspi¬rations across EMDEs. The new willingness and ability to undertake innovation in financial governance may turn out to be one of the most important legacies associated with the global crisis, especially when compared with prior crises. The new arrangements do not coalesce around a singular, grand global architecture that might replace the BWIs. Instead, we are observing productive incoherence in the expansion of disparate and, in some cases, overlap¬ping and interconnected institutions that complement the BWIs. Taken together, they are "thickening" and diversifying the financial landscape in EMDEs and introducing the possibility of a transition to a more complex, decentralized, multitiered, pluripolar global financial and monetary system (Armijo and Roberts 2014; Chin 2010; Grabel 2013a; 2013b; Huotari and Hanemann 2014; Mittelman 2013; Riggirozzi and Tussie 2012). The expan¬sion of these initiatives is widening policy space for development. They also generate opportunities for experience-based learning and the creation of new partnerships and coalitions, and in turn enable EMDE "forum shop-ping." In sum, the initiatives are substantially complicating the terrain on which the BWIs operate. We might also understand these institutions, how¬ever small in scale, in terms of their potential to increase robustness and even what Nassim Taleb (2012) terms "anti-fragility" of the global financial governance architecture. This would involve a collection of institutions that enjoy some degree of autonomy from each other, where crises are less likely to generate contagion across countries, and where each crisis might allow for learning that induces new innovations that are better able to prevent and limit the scope of future crises. What I call the productive redun¬dancy that is a feature of the emerging financial governance landscape is central to the achievement of these goals.

Finally, the latter set of supposedly existential normative or ideological threats consists of many elements, including Beijing’s possible overturning of the so-called global liberal international order, Chinese influence operations aimed at U.S. society, the export of China’s political values and state-directed economic approach, and its sale of surveillance technologies and other items that facilitate the rise or strengthening of authoritarian states. These threats all seem hair-raising at first glance. But while significant, they are greatly exaggerated and do not rise to the level of constituting an existential threat.

Beijing has little interest in exporting its governance system, and where it does, it is almost entirely directed at developing countries, not industrial democracies such as the United States. In addition, there is no evidence to indicate that the Chinese are actually engaged in compelling or actively persuading countries to follow their experience. Rather, they want developing nations to study from and copy China’s approach because doing so would help to legitimize the Chinese system both internationally and more importantly to Beijing’s domestic audience.

Many observers are pessimistic about deteriorating US-China relations and believe the two countries are heading towards a cold war. Even worse, some argue that the situation might be more dangerous than the US-Soviet Union Cold War, and that a hot war might break out between the two. This argument is unconvincing. First of all, deterrents to a flare-up are much stronger in US-China relations than in US-Soviet relations. Although economic and people-to-people ties between China and the US are declining, they are still close compared to US-Soviet ties. It is hard to decouple two closely intertwined economies and societies. Take two examples. China is expected to become the world's largest consumer market, a temptation hard to resist for exporters, including those from the US. And in education, more than 300,000 Chinese students study in the US, bringing in huge revenues for the US education industry. Many universities go to great lengths to woo international students. Recently Harvard and the Massachusetts Institute of Technology even sued the government over its new visa restrictions, now aborted, on international students. Second, even if there is decoupling, the pain would not be too great and can be kept out of the national security sphere if properly handled. In fact, for national security reasons, a modest degree of isolation will make both sides more secure and comfortable. For instance, if China’s information technology equipment cannot capture Western markets, the US will be more relaxed. If China cannot get advanced technologies from the US and its technological progress slows down, the US will be less anxious. In the same vein, China feels assured knowing that if the Trump administration does impose a travel ban on Communist Party members, it would be abandoning one of the tools available to the US to promote “peaceful evolution” in China. Economic decoupling is undeniably more painful for China than for the US. But unlike Japan during WWII, which was hit hard by the US oil embargo because of its lack of natural resources, China has no such problems. Given its large domestic market, losing the US as a major customer is not a disaster for China, and can be compensated through more dynamic economic activities at home. China can also make up for being freezed out of technological exchanges by turning to indigenous innovation. As for the US, it can import goods from other developing countries, albeit less cheaply. The relative loss is acceptable when weighed against the heightened perception of economic independence and security. Third, the ideological confrontation between China and the US is less intense than that during the Cold War. Unlike the obsession with ideology in those days, the line between capitalism and socialism is blurred today. The market economy has become universally recognised as the best way to promote economic growth and, politically, many countries have embraced democracy. Even North Korea calls itself the Democratic People’s Republic of Korea. Although ideological hawks in the US still long for the day when the beacon of freedom will light up the world, after many years of fighting bloody wars overseas, most American people are not interested in promoting democracy abroad. Meanwhile, China just wants to preserve its political system and has no interest in exporting it to other countries, as the Soviet Union did. Thus, ideological antagonism in China-US relations can easily be eased by calculations of realistic interests, which create conditions for compromise and cooperation. Fourth, both China and the US have many options other than war to achieve their policy goals. While they have no allies to serve as a buffer, given the nature of the potential conflict in the South China Sea or Taiwan Strait, both countries are adept at operating in grey zones and fighting psychological, public opinion or diplomatic warfare below the threshold of war. The forced closure of the Chinese consulate in Houston by the US government is just the latest act of brinkmanship. In addition, given China’s huge economic and financial interests in the US, the latter can wield the stick of sanctions when use of force is highly risky or not worth it. When both sides have many tools and options, why would they rush to war to achieve their goals? Last but not least, the imbalance of power will act as a deterrent. Some say the US and Soviet Union did not fight a hot war because they were evenly matched. It was not the case, actually. At the beginning of the Cold War, the Soviet Union was at a relative military disadvantage. Moreover, a country needs the will to fight before going to war, even if it is stronger militarily than its adversary. Having fought years of meaningless wars, the US is weary of war. China, too, abhors war. Having a clear understanding of US strength, especially when its own economy is slowing down and it is facing various domestic challenges, China would not wish to recklessly start a war with the US. In summary, the possibility of a hot war between China and the US is very small. The greatest danger for China is not a cold or hot confrontation with the US, but policymakers’ interpretation of the momentary hostility towards Beijing of a portion of the American population and the larger world. An erroneous interpretation could end China’s march to further opening up, and see it turn instead towards self-isolation.

“Made in China 2025,” a policy blueprint unveiled by Premier Li Keqiang in 2015 to develop Chinese technological capabilities in growth industries such as artificial intelligence and robotics, has especially raised the ire of Washington hawks. Indeed, it’s become the central target in the ongoing trade war.

But much of the fear over China’s technological rise is unfounded. Fundamentally, China is like most emerging economies around the world: still trying hard to close the enormous technological gap with advanced economies led by America.