The Balance of Power between the U.S. and China: Cause for Alarm or Fuel for Alarmism?

It seems a question as old as old as time by this point, but its salience grows with each passing moment: "When will China surpass the U.S.?"

And this question inevitably is followed by the question: "And what will that mean for Sino-U.S. relations?"

Work by a prominent international relations scholar suggests that, within the context of systemic theory, the international system is a product of the simultaneous activities of individual actors (states) whose individual behavior is prompted by the international system. States work to change the system, which results in change, and this change in turn impels a response by the other actors in the system.

Systemic theory, therefore, expects states will engage in active and reactive behaviors -- i.e., if country X increases its arms production, this prompts behavior from country Y who desires to maintain a suitable balance of military capabilities between itself and X. X has introduced change to the system by upsetting the previous balance of military capabilities, which prompts Y to respond.

Provided this abstract generalization bears some resemblance to reality, one would expect that giant powers like the U.S. and China will engage in similar behavior.

(Im-)Balance of Power across the Pacific

It's too early to say, but, to a certain extent, the Trump Presidency could in part be a manifestation of underlying concerns within the U.S. that the U.S.'s economic and military power is on the decline. The below figure displays four important bilateral U.S.-China metrics.

Though Chinese citizens seem less convinced of their own prowess, attitudes in the U.S. are more split (upper left). From 2008 to 2015, Americans display less certainty in their own economic power than do Chinese citizens. Meanwhile, more Americans than Chinese citizens seem to think China is the leading economic power. These numbers may suggest that Americans are more aware than the Chinese of the changing power dynamic between their two countries.

And as the upper right and lower quadrants of the above figure demonstrate, the balance of economic power and military expenditures is clearly tilting toward China's favor. Though the U.S. still has greater economic power (measured via the natural log of the ratio of the U.S.'s GDP/capita to China's GDP/capita) and a more favorable balance of military expenditures (measured via the natural log of the ratio of U.S. military expenditures as a percentage of its GDP to China's military expenditures as a percentage of its GDP), in terms of total military expenditures, China has surpassed the U.S. since 2009.

Will the U.S. Respond?

At some point, the U.S. likely will respond, and in some ways, it already has responded. But the tilting balance of economic power and military spending cannot help but prompt more than mere accommodation of China's growth -- it impels a more robust response in the form of increasing U.S. economic growth and military spending: two issues that had significant salience during the 2016 presidential election. Fear of U.S. decline likely motivated voters to favor a candidate that promised a return to an era of growth and power (not to mention security). As China continues to outpace the U.S. (and eventually surpass it), Americans' insecurity will surely increase. Whether this insecurity is the product of genuine cause for alarm or the consequence of alarmism isn't entirely clear; however, it would be wise to avoid undue fear. To date, China, though a rising power, seems content with economic growth and has so far not displayed aggressive behavior. Though its military spending is certainly on the rise, China's overall military capabilities are far behind those of the U.S. China's military spending likely has more to do with ensuring the security of its position within the Asia-Pacific region than with military conquest and hostility toward the U.S.

What this means in terms of future actions taken by the U.S. (and the current and future administrations) is anyone's guess. Systemic theory predicts the U.S. will respond in such a way to balance against China, but theory is no crystal ball that divines the future with absolute certainty. The question is not "will the U.S. respond," but "how?" An arms race is a possible (though unsavory) route, but the U.S. could also take steps to accommodate China while also ensuring its own interests are protected. The path forward will likely see a blending of both of these strategies, but, again, the exact makeup of this blend is anyone's guess.

To obtain the data and R code for this post, see my GitHub repository for this analysis.