Journal of Political Risk, Vol. 9, No. 2, February 2021
By Randall H. Cook
By all accounts, the U.S.-China strategic competition is alive and well. The news that China displaced the United States in 2020 as the world’s preferred destination for Foreign Direct Investment (FDI) was followed closely by publication of a new “Longer Telegram” proposing a U.S. whole of government strategy to contain PRC Premier Xi Jinping’s ambition to realign the geopolitical structure with China as the new fulcrum. The Biden Administration has sharply changed tack from its predecessor on a range of policies. But on China, there is remarkable continuity. The Trump Administration reset the U.S. strategic paradigm and there will be no going back. Complex interdependent engagement is out; realist bipolar competition is the name of the new (but really, a back to the future sort of) game.
This framing tends to draw commentators and policy makers into some familiar debates and blind alleys. Shouldn’t the U.S. oppose Chinese influence everywhere and always? Isn’t every Chinese advantage necessarily a U.S. loss? If the U.S. has fallen behind in the FDI race, this conventional wisdom holds, then the U.S. must “do something” to win back the FDI flow. While this elegant approach to ‘keeping score” in the geopolitical competition is intuitively appealing, it fails to account for a real world that, in fact, remains dynamic and complex. Worse, it leads to a reactive approach to interpreting events and choosing strategies that ultimately will disadvantage the U.S. in the ways that matter most. Continue reading