Stencil graffiti representing the agreement of two countries (USA - CHINA). Photographer's own design.
Despite trade wars, bilateral trade between the the US and China surged in 2021 Image Credit: Supplied

During the four decades of the Cold War, the United States had a grand strategy focused on containing the power of the Soviet Union. Yet by the 1990s, following the Soviet Union’s collapse, America had been deprived of that pole star. After the Sep. 11 terrorist attacks, US President George W. Bush’s administration tried to fill the void with a strategy that it called a “global war on terror.”

But that approach provided nebulous guidance and led to long US-led wars in Afghanistan and Iraq. Since 2017, the US has returned to “great-power competition,” this time with China.

As a grand US strategy, great-power competition has the advantage of focusing on major threats to America’s security, economy, and values. While terrorism is a continuing problem that the US must treat seriously, it poses a lesser threat than rival great powers. Terrorism is like jujitsu, in which a weak adversary turns the power of a larger player against itself.

America's endless wars

While the 9/11 attacks killed more than 2,600 Americans, the “endless wars” that the US launched in response to them cost even more lives, as well as trillions of dollars. While President Barack Obama’s administration tried to pivot to Asia — the fastest growing part of the world economy — the legacy of the global war on terror kept the US mired in the Middle East.

A strategy of great-power competition has two problems. First, it lumps together very different types of states. Russia is a declining power and China a rising one. As the world sadly discovered in 1914, on the eve of World War I, a declining power (Austria-Hungary) can sometimes be the most risk-acceptant in a conflict. Russia still retains enormous resources that it can employ as a spoiler in everything from nuclear-arms control and cyber conflict to the Middle East.

A second problem is that the concept of great-power rivalry provides an insufficient alert to a new type of threat America faces. National security and the global political agenda have changed since 1914 and 1945, but US strategy currently underappreciates new threats from ecological globalisation.

Global climate change will cost trillions of dollars and can cause damage on the scale of war; the COVID-19 pandemic has already killed more Americans than all the country’s wars, combined, since 1945.

Pentagon's humongous budget

Yet, the current US strategy results in a Pentagon budget that is more than 100 times that of the US Centers for Disease Control and Prevention, and 25 times that of the National Institutes of Health.

Former US Treasury Secretary Lawrence H. Summers and other economists recently called for the establishment of a $10 billion annual Global Health Threats Fund, which is “minuscule compared to the $10 trillion that governments have already incurred in the COVID-19 crisis.”

Meanwhile, US policymakers are debating how to deal with China. Some politicians and analysts call the current situation a “new Cold War,” but squeezing China into this ideological framework misrepresents the strategic challenge America faces.

The US and the Soviet Union had little bilateral commerce or social contact, whereas America and its allies trade heavily with China and admit several hundred thousand Chinese students to their universities. The Chinese system is not Marxist-Leninist but a form of state capitalism based on a hybrid of public and private firms.

Since America cannot tackle climate change or pandemics by itself, it has to realise that some forms of power must be exercised with others. Addressing these global problems will require the US to work with China at the same time that it competes with its navy.

A good great-power-competition strategy requires careful net assessment. Underestimation breeds complacency, while overestimation creates fear. Either can lead to miscalculation.

Competition with China

China is the world’s second-largest economy, and its GDP (at market exchange rates) may surpass that of the US by the 2030s. But even if it does, China’s per capita income remains less than a quarter that of the US, and the country faces many economic and demographic problems. Its economic growth rate is slowing, the size of its labour force peaked in 2011.

If the US, Japan, and Europe coordinate their policies, they will still represent the largest part of the global economy and will have the capacity to organise a rules-based international order.

As former Australian Prime Minister Kevin Rudd argues, the objective for great-power competition is “managed strategic competition.”

That will require America and its allies to avoid demonising China. They should instead see the relationship as a “cooperative rivalry” that requires equal attention to both sides of the description at the same time. On those terms, we can cope successfully, but only if we realise that this is not the great-power competition of the twentieth century.

Joseph S. Nye, Jr. is a professor at Harvard University and author of Do Morals Matter? Presidents and Foreign Policy from FDR to Trump

Project Syndicate