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Preface

      In October 1993, President Bill Clinton was preparing to host the first-ever summit of leaders of the top powers of the Asia Pacific region: China, Japan, South Korea, Indonesia, and a dozen others, along with the United States. I briefed him at the White House on the main recommendations of the Asia Pacific Economic Cooperation (APEC) forum’s Eminent Persons Group, which I chaired: that the upcoming meeting agree to establish a “community of Asia Pacific nations” that would seek to achieve “free and open trade and investment in the region by 2020.” The President agreed with those proposals and led their unanimous approval at the summit a month later, accelerating the integration and expansion of the most dynamic region of the world economy.¹

      Before deciding to do so, President Clinton asked the question that is even more central to US and global economic policy today than it was then: will China simply take the huge opportunities that have been offered to it, to benefit from an open world economy and access to the world’s most important markets, and then “tell us bye-bye when they no longer need us?” Like seven other US presidents before and after him, Clinton decided to gamble on engaging with China – at a time when the United States, basking in the glow of winning the Cold War, was near the peak of its global economic power and leadership position, and China was still in the early stages of its stunning rise.

A number of Americans, including former President Trump, now believe that was a huge mistake and want to reverse the policy. They fear that China will overtake the United States as a regional and even global power, and represents an existential threat to its world leadership, perhaps even its national security. They argue that “the China shock” and many of China’s policies are severely damaging the US economy. They worry that the American model of market economics and democratic politics may give way to China’s state capitalism and authoritarian rule. They conclude that China must be confronted and contained. The trade wars from 2017 could be just the start of prolonged and escalating hostilities between the economic superpowers.

      China is indeed rising rapidly. Its economy is already larger than that of the United States on some measures, and is growing at least twice as fast. It is the world’s largest trading country and, by far, holder of foreign exchange reserves. It has accounted for a quarter to a third of total world growth for more than a decade – far more than the United States. Its technological capability is growing rapidly and already rivals the United States in such keys areas as the Internet and artificial intelligence (AI).

      Unless it experiences unforeseen setbacks, China will achieve and maintain economic power roughly equivalent to that of the United States for the foreseeable future. It thus represents the first real challenge to American supremacy since the United States became the world’s dominant economy a century ago; the Soviet Union was never an economic factor, and Japan was both much smaller and a reliable ally. China clearly wants to translate its increased power into a much greater role in the world economy (and more broadly) but it is unclear whether it will use that power to provide constructive global economic leadership.

      The United States is not a declining power in any generalized sense. However, its global economic leadership has been waning for a quarter of a century, for both internal and external reasons, and President Trump abdicated much of what remained during his tenure. Its will to maintain that role is in doubt and much domestic reform will be needed to restore it. It will be critical whether President Biden and his successors can credibly regain at least part of America’s traditional role, and whether their policy agendas will succeed in supporting such a reversal, as the rest of the world legitimately questions whether Trump or Biden most accurately approximates the country’s international stance on a sustained basis.

      The coronavirus pandemic, and their respective responses to it, underline the competition between the two economic superpowers. China clearly responded more effectively to the pandemic itself, registering far fewer infections and deaths, and suffered much less setback to its economic growth. But its lack of transparency surrounding the origins and transmission of the disease, and its limited cooperation with international efforts to combat it, sullied rather than enhanced its global status, and thus its leadership aspirations.

The United States must in any event reject any efforts to contain China. Even if it were desirable, containment cannot succeed, as President Trump demonstrated: China is too large and too dynamic to be suppressed and few, if any, other countries would join the United States

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