US-China Relations - Growing Similarities, Growing Tensions

Talal Abu-Ghazaleh

The United States and China are often seen as rivals with differing outlooks on the global economy. However, a closer examination reveals that many of their disputes originate from their growing similarities, with the US implementing industrial strategies to advance its own national goals, while China maintains its state led economic approach.

China has played the game of globalization on its terms, shielding and boosting its industries while tapping into foreign markets. The Chinese government has supported key sectors for commercial and national security reasons, like telecommunications, semiconductors and AI, as well as limiting foreign entry into its market while taking advantage of other nations openness and growing needs for its goods. This strategy has led to economic growth and technological progress, that has also sparked resentment and pushback from China’s trade partners.

Although the US wants to be seen as a proponent and enforcer of global economic regulations, free trade, open markets and fair competition, it has in recent times adopted measures similar to those of China by imposing tariffs, curbing foreign investments and backing domestic industries.

It has also raised concerns about China's trade practices as being unfair; intellectual property theft and threats to national security; which is clearly driven by feelings of insecurity and a desire to uphold U.S. dominance amidst China's growing influence. I would even say that the U.S. does not know how to deal with this giant’s spectacular growth which is now breathing downs its neck, ready to take pole position on the world stage by being an on-par competitor in virtually every sphere of economic activity.

The trade conflict between these two nations has negatively impacted their economies and disrupted worldwide supply chains, leading to fragmentation and uncertainty, within the innovation landscape, with this rivalry heightening the potential for conflicts and instability on a global scale.

Having been a leading member of the World Trade Organization (WTO) Panel on Defining the Future of Trade and the Chair of the Business Action to Support the Information Society, I see that there is a pressing need for new regulations to oversee the world economy as both countries pursue their own agendas. These should allow for flexibility and diversity in policies while discouraging harmful competitive strategies, ensuring a fair playing field for all stakeholders while maintain healthy supply chains which the world  relies on.