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Economics, Essays, Foreign Affairs, Politics

Foreign Affairs Essay: ‘Underestimating China’

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FOREIGN AFFAIRS MAGAZINE (April 11, 2025):

Success in great-power competition requires rigorous and unsentimental net assessment. Yet the American estimation of China has lurched from one extreme to the other. For decades, Americans registered blistering economic growth, dominance of international trade, and growing geopolitical ambition, and anticipated the day when China might overtake a strategically distracted and politically paralyzed United States; after the 2008 financial crisis, and then especially at the height of the COVID pandemic, many observers believed that day had come. But the pendulum swung to the other extreme only a few years later as China’s abandonment of “zero COVID” failed to restore growth. Beijing was beset by ominous demographics, once unthinkable youth unemployment, and deepening stagnation while the United States was strengthening alliances, boasting breakthroughs in artificial intelligence and other technologies, and enjoying a booming economy with record low unemployment and record high stock markets.

The rise and fall of great powers often begins with flawed self-diagnosis.

A new consensus took hold: that an aging, slowing, and increasingly less nimble China would not overtake an ascendant United States. Washington shifted from pessimism to overconfidence. Yet just as past bouts of defeatism were misguided, so is today’s triumphalism, which risks dangerously underestimating both the latent and actual power of the only competitor in a century whose GDP has surpassed 70 percent of that of the United States. On critical metrics, China has already outmatched the United States. Economically, it boasts twice the manufacturing capacity. Technologically, it dominates everything from electric vehicles to fourth-generation nuclear reactors and now produces more active patents and top-cited scientific publications annually. Militarily, it features the world’s largest navy, bolstered by shipbuilding capacity 200 times as large as that of the United States; vastly greater missile stocks; and the world’s most advanced hypersonic capabilities—all results of the fastest military modernization in history. Even if China’s growth slows and its system falters, it will remain formidable strategically.

Such a commitment is not just a policy, but a signal of the capabilities of the United States, its allies, and partners. The Chinese Communist Party is inordinately focused on perceptions of American power, and a critical input in that equation is its estimation of Washington’s ability to pull in the allies and partners that even Beijing openly admits are the United States’ greatest advantage. Accordingly, the most effective U.S. strategy—the one that has most unsettled Beijing in recent years and can deter its adventurism in the future—is to build new, enduring, and robust capacities with these states. A sustained, bipartisan commitment to an upgraded alliance network, coupled with strategic cooperation in emerging fields, offers the best path forward to finding scale against the most formidable competitor the United States has ever encountered.

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KURT M. CAMPBELL is Chairman and Cofounder of The Asia Group. He served as Deputy Secretary of State and Indo-Pacific Coordinator at the National Security Council during the Biden administration.

RUSH DOSHI is an Assistant Professor at Georgetown University and Director of the China Strategy Initiative at the Council on Foreign Relations. He served as Deputy Senior Director for China and Taiwan Affairs at the National Security Council during the Biden administration.

Essays, Foreign Affairs, Politics

Foreign Affairs Essay: ‘The Post-Neoliberal Delusion’

FOREIGN AFFAIRS MAGAZINE (February 10, 2025): Although there are many explanations for Donald Trump’s victory in the 2024 U.S. presidential election, voters’ views of the U.S. economy may have been decisive. In polling shortly before the election, more than 60 percent of voters in swing states agreed with the idea that the economy was on the wrong track, and even higher numbers registered concern about the cost of living. In exit polls, 75 percent of voters agreed that inflation was a “hardship.”

These views may seem surprising given various economic indicators at the time of the election. After all, unemployment was low, inflation had come down, GDP growth was strong, and wages were rising faster than prices. But these figures largely missed the lasting effects that dramatic price increases had on many Americans, which made it harder for them to pay for groceries, pay off credit cards, and buy homes. Not entirely unreasonably, they blamed that squarely on the Biden administration.

Biden arrived in office in 2021 with what he understood as an economic mandate to “Build Back Better.” The United States had not yet fully reopened after nearly a year of restrictions necessitated by the COVID-19 pandemic, which had suppressed activity in the service sector. Biden set out to restructure the country’s post-pandemic economy based on a muscular new approach to governing. Since the 1990s, Democratic economic policy had largely been shaped by a technocratic approach, derided by its critics as “neoliberalism,” that included respect for markets, enthusiasm for trade liberalization and expanded social welfare protections, and an aversion to industrial policy. By contrast, the Biden team expressed much more ambition: to spend more, to do more to reshape particular industries, and to rely less on market mechanisms to deal with problems such as climate change. Thus, the administration set out to bring back vigorous government involvement across the economy, including in such areas as public investment, antitrust enforcement, and worker protections; revive large-scale industrial policy; and support enormous injections of direct economic stimulus, even if it entailed unprecedented deficits. The administration eventually came to dub this approach “Bidenomics.”

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JASON FURMAN is Aetna Professor of the Practice of Economic Policy at Harvard University. He was Chair of the White House Council of Economic Advisers from 2013 to 2017.

Essays, Foreign Affairs, Politics

Foreign Affairs Essays: ‘China’s Trump Strategy’

FOREIGN AFFAIRS MAGAZINE (February 6, 2025): In the months since Donald Trump won the U.S. presidential election in November, policymakers in Beijing have been looking to the next four years of U.S.-Chinese relations with trepidation. Beijing has been expecting the Trump administration to pursue tough policies toward China, potentially escalating the two countries’ trade war, tech war, and confrontation over Taiwan. The prevailing wisdom is that China must prepare for storms ahead in its dealings with the United States. 

Trump’s imposition of ten percent tariffs on all Chinese goods this week seemed to justify those worries. China retaliated swiftly, announcing its own tariffs on certain U.S. goods, as well as restrictions on exports of critical minerals and an antimonopoly investigation into the U.S.-based company Google. But even though Beijing has such tools at its disposal, its ability to outmaneuver Washington in a tit-for-tat exchange is limited by the United States’ relative power and large trade deficit with China. Chinese policymakers, aware of the problem, have been planning more than trade war tactics. Since Trump’s first term, they have been adapting their approach to the United States, and they have spent the past three months further developing their strategy to anticipate, counter, and minimize the damage of Trump’s volatile policymaking. As a result of that planning, a broad effort to shore up China’s domestic economy and foreign relations has been quietly underway.

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