The relationship between the US and China is stable---but barely in check

The relationship between the United States and China is undoubtedly the most consequential of all relationships for the global order today. Together, the United States and China account for more than 45 per cent of global output and nearly a quarter of world trade. Despite the diversion of US trade from China because of the trade and technology wars initiated under President Trump — but also prosecuted under President Biden — their economies remain closely linked through trade and international financial ties. Importantly, they have deeply interdependent economic relations with the East Asian economies on which the whole Asia Pacific region’s economic prosperity is built. They have more common interest in cooperation on meeting the global threat of climate change than any other two countries on the planet.

At the same time, these two superpowers are shaping up to an awkward and unstable military-strategic face-off across the Pacific. In this week’s lead article, David Lampton and Thomas Fingar point out that ‘[no] foreign policy challenge is more important [for the United States], or difficult, than finding a way to simultaneously deter and engage China without provoking unwanted behaviours’. They also acknowledge that ‘… this requires understanding the perceptions and priorities now shaping Beijing’s actions’.

The current dynamic in bilateral relations between the two big powers is dangerous. Leaders on both sides are shoring up their domestic support by demonising the other as an existential threat. China has blundered into aligning with miscreant states like Russia, North Korea and Iran, while the United States has stumbled into a strategy of economic and political containment against China that is driving Beijing further away from it and ‘in the wrong direction’.

The problem, as Lampton and Fingar see it, is that Beijing is now captured by a mindset where domestic and international security imperatives trump development and modernisation imperatives in national policy. This is a syndrome that infects other parts of the world, including the United States, in a way that serves to validate Chinese fears and policy responses.

This dynamic ‘is not good for China, the United States or the world. Washington cannot achieve immediate or fundamental changes in China’s behaviour but ill-considered actions can make things worse’, Lampton and Fingar correctly note.