Asia & the Pacific

The U.S. position in the global value chain puts it at a disadvantage, and Washington's confrontational policies are making things worse.

Power transitions affect a state’s ability to exercise economic statecraft. As a dominating and a rising power approach parity, they face structural incentives to decouple their economies. This decoupling affects business-state relations: high-value businesses within the dominant power tend to oppose their state’s economic statecraft because of its costs to them, whereas low-value businesses within the rising power tend to cooperate because they gain from it. 

China leverages its market in a form of “predatory liberalism” that weaponizes the networks of interdependence created by globalization. ne response to China’s bullying would be for its targets to form an alliance to retaliate against China’s high-dependence trade should Beijing act against any alliance members. 

Stephen Walt analyzes the priority that the United States should place on competing with China by asking and answering five questions.

The European Union is planning to adopt semiconductor export controls, restrictions on outbound investment in China, and new rules to reduce the European market share of Chinese renewables. This strategy brings Brussels' into closer alignment with Washington and is likely to increase tensions with Beijing significantly.

U.S. export controls on China’s semiconductor industry are just the opening salvos in a series of unprecedented export controls on China planned by the Biden administration. After controls on semiconductors, the Commerce Department is moving on to the next emerging technology it worries China could weaponize—quantum computing.

Joseph S. Nye argues that history shows that globalization is largely driven by technological changes that reduce the importance of distance, and that will not change.

Joseph Nye writes: From an American perspective, it is just as dangerous to underestimate Chinese power as it is to overestimate it. While hysteria creates fear, discounting China's recent progress and future ambitions could lead the United States to squander its own long-term advantages.

Ivan Arreguin-Toft analyzes the West's information technology asymmetry of capability, which has given way to asymmetry of vulnerability. While democracies worldwide remain threatened, they also contain the means to restore themselves.

Economic interdependence has long been considered important to international peace. Questions about harmful effects of the free flow of capital, however, are arising. China and Organization for Economic Co-operation and Development countries are increasingly involving their business firms in security and intelligence work, causing a security dilemma dynamic that increases economic competition.