Perplexing US-China Relations:
US-China relations are highly complex and challenging, making it difficult to fully comprehend. Senator’s question, “What the hell is going on in US-China relations?” reflects the intricate nature of the relationship.

COVID-19 as a Revealing Factor:
COVID-19 is likened to a bolt of lightning that illuminates aspects of the US-China relationship that were previously obscured. The crisis offers insights into deeper issues and opportunities within the relationship.

Three Key Ideas for Navigating the Relationship:
Allison proposes three big ideas as building blocks for thinking about how to navigate the challenging US-China relationship. These ideas are derived from observations made during the COVID-19 crisis.

Thucydides and the Thucydidean Rivalry:
The Thucydidean rivalry describes a pattern in history where a rising power threatens to displace a ruling power, often leading to conflict. The United States is the current ruling power, and China is the rising power, creating a potential for a Thucydidean rivalry between the two nations.

Mutual Existential Threats:
Existential threats are those that pose a fundamental challenge to the survival or well-being of a nation. Mutual existential threats are those that both nations face and cannot defeat alone, such as pandemics, climate change, and nuclear war. The COVID-19 pandemic is an example of a mutual existential threat that requires cooperation between the United States and China to address effectively.

Rivalry Partnership:
The concept of a rivalry partnership acknowledges that while the United States and China are rivals, they also have common interests and must work together to address shared challenges. This concept emphasizes the need for both competition and cooperation in the relationship between the two countries.

Key Insights:
The coronavirus crisis has highlighted the need for the US and China to recognize their shared existential threats and work together to address them. The Song Dynasty’s “rivalry partnership” with the Liao tribe offers a historical example of how rivals can cooperate in some areas while competing in others. The US and China currently find themselves in a complex relationship of rivalry and partnership, similar to the “co-opetition” seen in the business world.

US-China Relations in the Context of the Thucydides Trap:
The coronavirus crisis has intensified the focus on the Thucydides Trap, which suggests that a rising power (China) is likely to challenge a ruling power (US), potentially leading to conflict. Both China and the US have engaged in efforts to demonize each other, further exacerbating tensions. The performance of both countries in handling the crisis will impact their self-perception, as well as how others perceive them and their systems of government.

The Potential for a Teaching Moment:
The crisis could potentially serve as a teaching moment, emphasizing the need for cooperation and transparency in addressing global health threats. Increased transparency and collaboration in surveillance and alarm systems can help prevent future pandemics. The presence of experts from both countries in each other’s countries can facilitate early detection and response to emerging threats.

The Risk of War:
Graham Allison emphasizes the risk of war between China and the United States despite both countries having pressing domestic issues and understanding the catastrophic consequences of war.

Thucydides Trap:
Allison highlights the Thucydides Trap, a historical pattern of conflict between a rising power and a dominant power, as a potential scenario between China and the United States.

Internal Focus of China:
Steve Orleans observes that China’s strategic view is primarily focused on maintaining the power of the Chinese Communist Party, rather than external expansion.

Taiwan as a Flashpoint:
Allison points to Taiwan as a potential flashpoint for conflict, considering the possibility of Taiwan moving towards independence and China’s likely forceful response.

The Challenge of Compromise:
Both China and the United States face challenges in finding a diplomatic solution regarding Taiwan, with neither side willing to compromise easily.

The 1914 Parallels:
Allison draws parallels between the current situation and the events leading up to World War I, highlighting how seemingly minor events can lead to disastrous outcomes.

The Blame Game in the US Election:
Orleans expresses concern that the upcoming US election campaigns may intensify anti-China rhetoric, potentially pushing the two countries closer to conflict.

Managing the Rivalry:
Allison acknowledges the possibility of managing the rivalry between China and the United States, but emphasizes the need for both sides to avoid escalating tensions and finding common ground.

Perception and Misperception in the US-China Rivalry:
China’s economic growth and increasing global influence have created a perception in the US that China is encroaching on American positions and prerogatives. This perception is often exaggerated and hyped beyond reason, especially during election seasons.

Politics and the US-China Rivalry:
Domestic politics in both the US and China play a significant role in shaping the rivalry between the two countries. Politicians often feel compelled to take a tough stance on China in order to avoid being perceived as soft on national security. This can lead to a cycle of escalation in which each side tries to outdo the other in terms of toughness, making it difficult to find common ground and resolve differences.

The Thucydides Trap:
The Thucydides Trap is a theory in international relations that suggests that when a rising power challenges an established power, it often leads to conflict. This theory is based on the historical example of the Peloponnesian War between Sparta and Athens. The US and China are currently in a similar situation, with China’s rise challenging America’s global dominance. The Thucydides Trap suggests that this could lead to conflict between the two countries, unless they are able to find ways to manage their rivalry peacefully.

US-China Relations:
Graham Allison expresses concern about the growing demonization of China, which could cause lasting damage to the relationship between the two countries. Steve Orleans predicts that China will be a central issue in the upcoming US presidential campaign, with Republicans blaming China for the COVID-19 pandemic and Democrats trying to distance themselves from Trump’s handling of the situation.

Racism and Xenophobia:
Allison acknowledges the existence of racism and xenophobia in the US, including negative attitudes towards Chinese Americans and Chinese students. He recounts an incident where a Chinese American research assistant working for him faced mistreatment due to his ethnicity. Allison emphasizes the importance of condemning racism and xenophobia and welcoming Chinese students and Chinese Americans in the US.

Trump’s Rhetoric on China:
Allison commends President Trump for heeding advice from his wife and Senate Majority Leader McConnell to stop using terms like “Chinese virus” and “Wuhan virus.” He believes that Trump’s subsequent phone call with Chinese President Xi Jinping led to a positive change in tone and a halt to the spread of misinformation.

Wuhan Lab Leak Theory:
Steve Orleans addresses the theory that the COVID-19 pandemic originated from an infected animal improperly disposed of from the Wuhan Level 4 virology lab. He notes that this theory has been promoted by some individuals and groups but lacks substantial evidence.

Graham Allison’s Perspective on Covid-19 Origins:
The exact origins of Covid-19 are still unknown and need scientific investigation. There are three possible origins: Manufactured in a bioweapons lab. Escaped from a bio research lab. Natural occurrence from a virus in nature. Allison recommends joint scientific investigation between the US and China to determine the facts. Allison dismisses China’s narrative that the virus originated in an American bioweapons lab.

US Response to the Pandemic and China’s Influence:
The US response to the pandemic has left some allies and partners disappointed. China has taken advantage of this to spread influence through medical aid and consulting.

Allison’s Opinion on US Recovering Its World Leadership Role:
While China acted swiftly and effectively to contain the virus, the US has faced difficulties in controlling its spread. As a result, Apple stores are open in Wuhan and Shanghai, while they remain closed in many US cities.

Economic Rivalry:
China’s economy has grown exponentially, becoming larger than the US economy by most metrics, including production of goods.

Manufacturing Dominance:
China has become the world’s manufacturing center, supplying a wide range of products, including face masks and pharmaceutical ingredients.

Thucydides Trap Implications:
The Thucydides Trap, where a rising power challenges a dominant power, is creating an uncomfortable situation for the US and China.

Chinese Assistance:
China has provided aid to the US, such as sending face masks, to show goodwill and gain influence.

Reputation Building:
Both the US and China are attempting to bolster their reputations during the pandemic.

US Actions:
The US has taken actions that have damaged its reputation, such as diverting protective equipment from other countries.

US War History:
The US has a history of starting wars slowly and improving over time.

Long-term Rivalry:
The rivalry between the US and China is expected to continue for a long time, with both countries gaining and losing reputational ground.

Chinese Propaganda:
Chinese propaganda aims to deflect attention from the government’s mishandling of the pandemic’s early stages.

The 2008 Financial Crisis:
The 2008 financial crisis was caused by excesses and risks in the financial market, leading to the possibility of a second Great Depression.

Collaborative Stimulus Spending:
The U.S. and China collaborated in joint stimulus spending to prevent a Great Depression during the 2008 financial crisis. China’s contribution was significant and may have been as important as or even more significant than the U.S.’s contribution.

Current Stimulus Spending:
The U.S. and China are currently engaged in large-scale stimulus spending to combat the economic impact of the coronavirus pandemic. China has been more reserved in its stimulus spending compared to the U.S.

Potential Collaboration:
Collaboration between the U.S. and China in stimulus spending could help mitigate the severe economic impact on the rest of the world, especially developing countries.

The U.S. National Debt:
The U.S. national debt was considered a significant threat to national security during the Obama administration. The current orthodoxy is that deficits don’t matter due to the U.S. having the reserve currency. Leaving large debts to future generations may have negative consequences for their opportunities and the country’s future.

Interest Rates:
Low interest rates may make the operating deficit seem smaller, as the cost is essentially passed on to future generations.

Thucydides Trap and the China-US Relationship:
The Thucydides Trap refers to the tension between a rising power (China) and an established power (US), which can lead to conflict. Kevin Rudd, former Australian Prime Minister, observed that 50% of Washington’s conversations focus on maintaining the US as the number one power, while in Beijing, the focus is solely on China’s progress, not on becoming number one. China’s leaders are more concerned with staying in power and solving domestic problems than competing for global dominance.

China’s Dream and Economic Goals:
China’s dream is to make China great again, restoring its historical position of strength and influence. Xi Jinping and the Chinese people are driven by this vision of national rejuvenation. China’s economic goals include increasing per capita GDP and becoming a leading manufacturer and trading partner.

Impact on the US and Economic Implications:
China’s economic success has impacted the US, leading to concerns about job losses, trade imbalances, and technological competition. The US is considering policies to divert critical supply chains back to the US, potentially leading to higher prices and lower quality goods. Disrupting supply chains without considering the costs can have negative consequences for both economies.

Economic Dependency and Trade:
China’s low-cost, high-quality manufacturing has made it a dominant player in global supply chains. Completely unraveling these supply chains would be costly and impractical. A balanced approach is needed, identifying key areas where dependency on foreign suppliers should be minimized.

Decoupling from China:
Decoupling from China could lead to lower quality and higher prices for consumers. The rest of the world, particularly Europe and Asia, is unlikely to join the U.S. in completely decoupling from China. Countries prioritize their economic relationship with China, which is essential for their prosperity, over their security relationship with the U.S. Decoupling from China could lead to a recession and political instability in other countries.

Challenges in Managing U.S.-China Relations:
Managing U.S.-China relations is a complex task. The two countries have different political systems, economic interests, and historical experiences. There is a risk of conflict between the two countries, especially in the Asia-Pacific region. Communication and cooperation between the two countries are essential to avoid conflict.

The Importance of Engagement:
Engagement with China is necessary to address common challenges, such as climate change and global health. Engagement can also help to build trust and understanding between the two countries. The U.S. and China should work together to find common ground and avoid conflict.