Examine the emerging strategic competition between China and the US and its impact on global order.

Introduction

Writing in The Atlantic in September 2015, Harvard scholar Graham Allison warned of the "Thucydides Trap": of sixteen cases in the past 500 years in which a rising power challenged a ruling one, twelve ended in war. The emerging strategic competition between China, the rising power, and the United States, the established one, is the defining feature of 21st-century international politics. By 2016, it had spread from trade and technology to the South China Sea, global finance and ideas about development and governance. Its course will shape whether the global order remains open and rules-based, fragments into rival blocs, or descends into conflict.

Overview

After President Nixon's opening to China in 1972 and diplomatic recognition in 1979, the US followed a policy of engagement, supporting China's entry into the WTO in 2001 in the hope that economic growth would make China a "responsible stakeholder". China's economy grew at about 10 per cent a year for three decades. By 2014, the IMF estimated that China had become the largest economy in the world in purchasing power terms. Under Xi Jinping, from 2012, China became more assertive, launching the Belt and Road Initiative (2013) and the AIIB (2015), while the US launched its rebalance to Asia (2011).

Dimensions of the emerging competition

1. Economic weight.

China's rise as the world's largest trading nation and manufacturing power challenged US economic leadership and gave China leverage over many countries. (Reference: IMF, World Economic Outlook, October 2014; WTO, World Trade Statistical Review 2016.)

2. Trade and investment rules.

The US promoted the Trans-Pacific Partnership (2016), which excluded China, while China backed the Regional Comprehensive Economic Partnership and bilateral deals, competing to write Asia's trade rules. (Reference: TPP Agreement, February 2016; RCEP negotiations, launched 2012.)

3. Financial institutions.

China founded the Asian Infrastructure Investment Bank, which the UK and other US allies joined in 2015 despite US objections, and the BRICS New Development Bank. (Reference: AIIB Articles of Agreement, June 2015; UK Treasury announcement, 12 March 2015.)

4. Currency.

The IMF added the Chinese yuan to its Special Drawing Rights basket on 1 October 2016, a symbolic step towards a more international role for China's currency. (Reference: IMF press release, 30 September 2016.)

5. Military and maritime.

China's naval build-up and island-building in the South China Sea met US freedom-of-navigation operations, making the sea a site of direct military rivalry. (Reference: US Department of Defense, Asia-Pacific Maritime Security Strategy, 2015; CSIS Asia Maritime Transparency Initiative.)

6. Technology and cyber.

The two competed in telecommunications, computing and cyberspace; after major hacks such as that on the US Office of Personnel Management, Presidents Obama and Xi reached a cyber agreement in September 2015. (Reference: The White House, Fact Sheet on President Xi Jinping's State Visit, 25 September 2015.)

7. Regional influence in Asia.

Both sought influence over Southeast Asia, South Asia and Central Asia through aid, trade and security ties, with China's BRI and the US rebalance as rival strategies. (Reference: NDRC, BRI Vision and Actions, 2015; Hillary Clinton, "America's Pacific Century", 2011.)

8. Ideas and development models.

China's model of state-led growth without political conditions, sometimes called the "Beijing Consensus", competed with the Western model of free markets and democracy. (Reference: Joshua Cooper Ramo, The Beijing Consensus, Foreign Policy Centre, 2004.)

Impact on the global order

1. Power transition and the risk of conflict.

The shift of power from the US to China raises the danger of miscalculation, especially over Taiwan and the South China Sea. (Reference: Graham Allison, "The Thucydides Trap", The Atlantic, September 2015.)

2. Multipolarity.

The rise of China, alongside India and others, moves the world from US unipolarity towards a multipolar order with several centres of power. (Reference: US National Intelligence Council, Global Trends 2030: Alternative Worlds, 2012.)

3. Reform of old institutions.

Pressure from China and emerging economies forced reform of the IMF quotas, agreed in 2010 and finally implemented in January 2016, giving China a larger voice. (Reference: IMF press release on the effectiveness of the 2010 quota reforms, 27 January 2016.)

4. Rise of parallel institutions.

New China-led bodies, such as the AIIB, the BRI and the NDB, create a parallel set of institutions alongside the Bretton Woods system. (Reference: AIIB annual reports; New Development Bank Agreement, 2014.)

5. Fragmenting trade regimes.

Rival trade agreements and later tariff wars threaten to divide the global economy into competing blocs, weakening the WTO. (Reference: WTO, World Trade Report; IMF, Geoeconomic Fragmentation and the Future of Multilateralism, 2023.)

6. Cooperation on global issues.

Despite rivalry, the two powers cooperated on climate change, announcing joint targets in November 2014 that helped make the Paris Agreement (2015) possible. (Reference: US-China Joint Announcement on Climate Change, Beijing, 12 November 2014.)

7. Pressure on the Global South.

Developing countries face pressure to choose between US security ties and Chinese economic ties, but they also gain bargaining power by playing the two against each other. (Reference: Pew Research Center, global attitudes surveys on the US and China, 2015–2016.)

8. Arms competition.

Military modernisation on both sides, including missiles, missile defence and space capabilities, risks a new arms race and complicates arms control. (Reference: SIPRI Yearbook 2016; US Department of Defense, China Military Power Report 2016.)

Implications for Pakistan

For Pakistan, the competition offers opportunities through CPEC and Chinese investment, but also risks if the US views Pakistan as part of a Chinese camp, especially as the US deepens ties with India. Pakistan should keep its strategic partnership with China while maintaining economic and security cooperation with the US, presenting itself as a bridge rather than a pawn.

Conclusion

A saying attributed to Confucius holds that "the cautious seldom err." The emerging competition between China and the US touches every field: economics, finance, technology, the military, regional influence and ideas. It is pushing the world towards multipolarity, reforming old institutions and creating new ones, while raising the risk of conflict. Whether the two powers escape the Thucydides Trap will depend on caution, communication and a willingness to share leadership of the global order. For countries like Pakistan, a peaceful competition is far better than a new Cold War.