Competition between China and the U.S. does not have to result in a win-lose situation, but this requires both countries to renegotiate current trade policies. The current negotiations can provide a win-win deal for both countries. Factors that contribute to a nations global power are its economic policies, military strength, and technological development. The U.S. is currently the hegemon because of its strong economy, superior military, support for innovation, and altruistic approach to foreign relations. China’s rise as a global power will use these factors to challenge the U.S. domination and become the new global leader (Pillsbury, 2018, pp. 143-144).
As China’s economy strengthens it will have the resources to modernize its military to in efforts to protect its natural resources and sea-lanes. China has a hybrid economic structure where the government subsides private companies that its government has interest in (Pillsbury, 2018, p. 149). Such subsidies are used for research and development in the industries in which China sees as opportunistic. Due to these factors, competition between foreign companies becomes largely one sided. These companies also conduct economic espionage and steal intellectual property, challenging U.S. and foreign companies (Pillsbury, 2018, p. 189).
In the March 2018 address to China by President Xi, he stated that China was not interested in “seeking hegemony or [would] engage in expansion” (Fong, 2018). This doesn’t necessarily mean China doesn’t aspire to become the global leader eventually. As Michael Pillsbury outlines in his book “The Hundred-Year Marathon” China’s leaders would avoid using such rhetoric that might alarm the world of their true intentions (Pillsbury, 2016). China does not want to be perceived as threatening while they build and grow. An example of this is the slow build up and militarization of islands in the South China Sea. China is using this as a way to secure the natural resources within the area such as fishing, oil, and minerals. It also helps secure the sea-lanes surrounding China and provide a military buffer zone for Mainland China (Pillsbury, 2018, p. 143).
Another concern is how the government subsidies Chinese companies. This practice makes it nearly impossible for foreign companies to compete in those industries. One example of this is the information and communication company Huawei. Huawei is becoming a global leader in this industry, but their relationship with the Chinese government raises security concerns to the U.S. and many European countries (Bey, 2018 June 28). The fear is that the products and services provided by the company could be used to collect information on their customers (Pillsbury, 2016, p. 173). What is also of great concern is the development of 5G technology and artificial intelligence (Bey, 2018 June 28). Both have military applications and could rival the U.S. in the near future. Therefore, as China continues to rise, “the U.S. will continue to expand investment restrictions on Chinese technology companies wishing to enter the U.S.” (Bey, 2018 June 28).
Despite these challenges and the recent threat of a trade war between the two countries, the use of military force or violence is unlikely as the two countries begin to discuss trade reform. The countries are using and will continue to use the World Trade Organization (WTO) to settle trade disputes. The U.S. has already “successfully litigated WTO disputes targeting unfair trade practices and upholding our right to enforce U.S. trade laws” (“President Donald J. Trump is Confronting China’s Trade Policies”, 2018). Leveraging the WTO will ultimately help ensure both countries achieve fair trade deals and compliance with the organizations’ intellectual property and environmental policies. If China commits to prevent intellectual property theft and encourage U.S. technology companies to compete in the Chinese market, it would benefit its people by allowing them access to more products. Finally, the U.S. would benefit by having access to the new market.
- Bey, M. (2018, June 28). Huawei’s Success Puts It in Washington’s Sights. Retrieved July 26, 2018, from https://worldview.stratfor.com/article/huaweis-success-puts-it-washingtons-sights-china-technology
- Fong, L. (2018, April 15). What would Chinese hegemony look like? A lot like US Leadership. Retrieved July 26, 2018 from https://www.scmp.com/week-asia/opinion/article/2141661/what-would-chinese-hegemony-look-lot-us-leadership
- Pillsbury, M. (2016). The hundred-year marathon: Chinas secret strategy to replace America as the global superpower. New York, NY: Griffin.
- President Donald J. Trump is Confronting China’s Unfair Trade Policies. (2018, May 29). Retrieved July 27, 2018, from https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-confronting-chinas-unfair-trade-policies/