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Foreign Policy

A Conflict We Can’t Afford

Sep 18, 2021

It has been argued that globalization precipitated WWI. Many are now comparing the WWI era to the present day, with a focus on the brewing tensions between China and the U.S. But the world has transformed since the days of propeller warplanes and the advent of industrialization, and any conflict that might occur between China and the U.S. would take place under vastly different economic, strategic, and geopolitical parameters. Global poverty has declined significantly, and relative global stability and long-term peace between countries has become the norm. In 1910, as the integration of the 20th century came to its zenith, the global extreme poverty rate was 73%. Today it is less than 10%. One could argue that when the Guns of August roared to life on the European continent, the horrors and societal costs that came from the conflict, including the loss of life, shattered political systems, destroyed economies, and the decades of global upheaval that followed, was not fully realized when the war started. Had it been, would the war have evolved the same way, or even occurred? In the 21st century, with the historical purview of not only both World Wars, but also the economic and societal upheavals of the 19th and 20th centuries, as well as a half century of global detente that was the Cold War, the leaders and societies of today have a more precise understanding of the cost of conflict, and why we must avoid it. The tumultuous relationship between China and the United States is no exception.

There are multiple reasons why the likelihood of a conflict between China and the U.S. is low. Economic integration, geopolitical circumstances, and societal concerns in the 21st century must all be considered.

Economically Interconnected

Extensive and intertwining global supply chains are the new Mutually Assured Destruction (MAD), which decrees no conflict can occur. The doctrine from the Cold War fits well with modern supply chains, extending across boundaries, geographies, culture, and languages.

 If a conflict occurred between the United States and China, not only would the major supply chains of the world be affected and most likely collapse, but the economic repercussions would filter down to every part of the globe, thereby ensuring decades of economic and social regression. This includes Apple and TSMC, which are the two most powerful tech companies in the world. Not because of the revenue they generate, but because of their importance and critical need to both the United States and China. Looking at Apple, the company supports 2.4m jobs in the U.S., and 5m+ in China. With Amazon and its online marketplace, over 40% of the sellers on the platform are from China. If you go to a Wal-Mart in the U.S., 70-80% of its suppliers are either in China or Chinese companies. We should be thankful that the supply chains of so many industries weave throughout Asia and have China as a primary center. This ensures the cooperation and collaboration of a wide range of actors, including governments.

Business leaders in particular would push against any such conflict. If one were to happen their businesses would not only collapse, but also devastate the U.S. and global economies. Add to this China holding $2.1 trillion in U.S. assets, and U.S. entities holding $1.2 trillion in Chinese assets, a conflict amounts to economic suicide by either side. This “coupling” is actually imperative to global stability and peace. It is through this integration that we check and balance each other, and that the cost of any conflict, no matter how small, is so great that the likelihood of it occurring is extremely low. 

U.S. universities, who rely on the revenue from overseas students, also have a strong influence in our system and would stand to lose substantially from conflict with China. Each year roughly 370K+ Chinese students study in the U.S., almost all paying full out of state tuition rates. In 2019 alone that was $15.9B into university coffers. With the pandemic still ongoing, many U.S. colleges and universities are reeling from the loss of this revenue. University administrators and tenured professors, owed large salaries and benefit packages, would have them reduced, endowments would become a shell of their former selves, and the flow of prestige and value that U.S. universities have around the world would end.

Geopolitical Realities

Looking through a political lens, the U.S. faces tough domestic and geopolitical pressure when it comes to entering a potential conflict. With the utter collapse of Afghanistan and the scenes of mobs running for planes at the Kabul airport, the public is not interested in going to another country or region to fight. American society does not want more conflict.

On the international front, any conflict would force states in Asia and other regions to pick between the two countries. Kishore Mahbubani, the well-known Singaporean diplomat, shared an anecdote. Prime Minister Lee Hsien Loong was once asked to choose between the U.S. and China, and his response was: “Don’t ask us to choose, you may not like the answer.”

With the fall of Afghanistan after $3 trillion spent and 20 years, the realization in the region is that the United States is no longer the power it was. Potential allies are questioning how U.S. intelligence and other NATO powers didn’t foresee this outcome, or seemingly attempt to mitigate it. If they couldn’t foresee this with all the intelligence apparatus’ and 20 years occupying that land, how can they possibly know about China’s abilities, and accurately predict and forecast events? Many in Asia are discussing that in successive generations, with conflicts in Asia that included Vietnam, Afghanistan, and Iraq, the U.S. has always withdrawn and left intense chaos in the country and region. It remains to be seen how the dust will settle, but the assumption in the United States that its allies will rally to its flag in a conflict with China is far from a bankable outcome.

Finally, we have a domestic U.S. and global societal push against conflict and “forever wars” which is only becoming stronger. In my parents’ generation it was Vietnam, my generation it is “The War on Terror.” We’ve already had our version of Vietnam, and are not interested in another. The age of conflict is over. Add to this the $7 trillion bill for the “War on Terror,” along with the loss of life primarily from the lower classes in the U.S.; there is no interest in fighting in faraway lands any longer.

The forces of the 21st century, namely globally integrated supply chains, the threat of an economic collapse, and societal preference for peace over conflict, are powerful deterrents against a war between the U.S. and China. Economic, political, and societal forces will continue driving the U.S. and China, and ultimately the world, closer together. 

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