A review of this book by Graham Allison, professor of government at the Harvard Kennedy School, comes at a pertinent time. His book explores the question of whether the United States, the incumbent dominant superpower, will go to war with China, the rising superpower. At this time of writing, an ongoing trade war unleashed by the U.S. President, Donald Trump, against China is escalating, and senior U.S. officials have recently made hostile accusations against China as tensions between their navies are escalating in the South China Sea.
When Xi Jinping became the president of China in 2012, the late Singapore prime minister, Lee Kuan Yew, noted that Sino-U.S. competition was accelerating, the author, Allison, notes. When Trump unveiled his National Security Strategy in December 2017, he labelled China a rival of the United States, as I wrote in The Calcutta Journal of Global Affairs in May 2018. Allison quotes Lee Kuan Yew as saying, “The size of China’s displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.” China, the world’s second largest economy, is expected by many economists to overtake the United States in GDP in a few decades.
The book raises the question whether the United State and China will fall into a Thucydides’ trap, a term coined by Allison after the ancient Greek historian Thucydides, the author of the historical classic, The History of the Peloponnesian War. This war was fought between Sparta, the dominant military power in the Greek world, and Athens, the rising power in Greece. A bitter war lasted from 431 BCE to 404 BCE, when Athens surrendered to Sparta. Two superpowers are caught in a Thucydides’ trap, when an established superpower feels threatened by a rising superpower, leading to war.
Besides the Peloponnesian war, Allison lists sixteen cases of rivalry between two powers in history, of which twelve resulted in war while only four avoided war.
One instance of the Thucydides’ trap cited by Allison involved Germany against Britain in the early twentieth century, culminating in the First World War. At that time, Germany was aggressively building up its naval fleet, which made Britain, then the world’s dominant sea power, uneasy. Currently, under Xi’s command, the People’s Liberation Army Navy is expanding its blue water capabilities with new aircraft carriers and muscling into the South China Sea, which is being contested by the United States, which owns the world’s most powerful navy.
One example of two countries avoiding war, cited by Allison, are the tensions between the United States and Britain over Venezuela in the late-nineteenth century. In 1895, a territorial dispute arose between Venezuela and British Guiana. The U.S. Secretary of State, Richard Olney, demanded that Britain accept arbitration on behalf of its territory, British Guiana. Britain initially rejected Olney’s demands, and then the U.S. president, Grover Cleveland, responded with a thinly veiled threat of war. Subsequently, Britain agreed to arbitration.
The confrontation over Venezuela in the late-nineteenth century finds a mirror in the current rivalry between the United States and China over the same Latin American nation. Relations between the United States and Venezuela have been poor since 2001. In 2017 and 2018, the Trump administration imposed a slew of sanctions on the government and various individuals of Venezuela, including the Venezuelan First Lady, Cilia Flores. In contrast, China and Venezuela are strong allies, with the South American country being a major oil exporter to China and heavily dependent on Chinese money to keep its troubled economy afloat.
The book lists several scenarios which may spark war between China and the United States. The current Sino-U.S. trade war at this time of writing is eerily similar to one particular scenario cited in the book, the escalation of economic conflict to military war. This scenario occurs with the U.S. president complaining of China’s huge trade surplus with the United States, and demands China reduce its trade surplus. The United States threatens to impose sanctions on some Chinese goods, to which China responds by “delaying” some U.S. food exports to China. Beijing sells some of the U.S. Treasury bonds it owns, causing turbulence in the bond markets and a rise in interest rates. Global markets react as investors sell off U.S. stocks. Major stock indices around the world fall dramatically. U.S. financial markets suffer a series of cyber glitches while the IT networks of some U.S. banks are hacked into, causing huge financial losses. The Federal Bureau of Investigation discovers malicious software was the cause of the cyber crashes. The FBI suspects China as the culprit but has no conclusive proof.
In response, the U.S. president orders a U.S. drone stationed in Japan to attack a cyber-warfare facility in China, while attempting to hide the drone’s U.S. identity. The Chinese, with their sophisticated intelligence capabilities, discover the drone was of U.S. origin, and retaliate by launching missiles at a U.S. military base in Japan, killing American soldiers and civilians. The Japanese public calls for their government and the United States to respond to the Chinese attack which they perceive as unprovoked. After that, military war spirals out of control. Allison believes that this scenario is “unlikely but not impossible.”
By a scary coincidence, actual events at this time of writing bear a high resemblance to this scenario, barring minor differences. Trump has been calling for China to reduce its huge trade surplus with the United States. In 2018, the Trump administration slapped tariffs on hundreds of billions of U.S. dollars of Chinese goods, to which China retaliated with tariffs on U.S. agricultural products. The NASDAQ and Dow Jones indices fell sharply on October 10, 2018 followed by declines in stock markets across Europe and Asia the next day. On October 11, Bloomberg and Reuters reported that China had sold US$ 3 billion of U.S. dollar bonds, while U.S. interest rates have been rising. On October 10, 2018, the U.S. Department of Justice announced that a Chinese spy, Yanjun Xu, was arrested and charged with conspiring and attempting to commit economic espionage and steal trade secrets from multiple U.S. aviation and aerospace companies. Such a serious allegation is bound to ratchet up tensions.
The book cites other possible scenarios—war provoked by a third party such as a conflict between China and Japan over the Senkaku islands, and a shift by Taiwan towards independence. An accidental collision at sea between U.S. and Chinese warships might also escalate to war, writes Allison. Leaked aerial photos taken by the U.S. Navy show a Chinese destroyer coming within forty-one metres of colliding with a U.S. warship in the South China Sea. The near-miss occurred on September 30, 2018.
On the bright side, Allison lists a range of factors that can prevent war. For instance, higher international authorities can resolve disputes without war, the book points out. Presumably this includes the United Nations.
During the face-off over Venezuela in the late-nineteenth century, Britain realised that the cost of war would be large and the likelihood of victory small, while it faced more serious threats like Germany closer to home. So Britain accommodated U.S. demands without sacrificing its core interests, leaving the Americas to the United States. Similarly, the likelihood of war between the United States and China is shrunk by the long geographical distance between them. In a standoff over Taiwan or the South China Sea, the United States may avoid war as an option since it might deem those areas are not part of its core interests by virtue of being so far away.
Thick economic interdependence raises the cost—and thus lowers the likelihood—of war, says Allison. He admits that the First World War broke out despite the British and German economies being strongly interwoven at that time. However, some argue that international supply chains are much more integrated between the United States and China presently, compared to Britain and Germany prior to the First World War, so the cost of war between the United States and China would be much higher than the First World War. The United States is the largest market for Chinese exports, while China is the largest creditor of the United States. Many supply chains for popular products like Apple iPhones involve both countries and others; hence the global community has a stake in pulling back the superpowers from the brink. Allison predicts,
War between the United States and China is not inevitable, but it is possible. The underlying stress created by China’s disruptive rise creates conditions in which accidental, otherwise inconsequential events could trigger a large-scale conflict. On current trajectories, a disastrous war between the United States and China in the decades ahead is not just possible, but much more likely than most of us are willing to allow.
I agree with Allison that war between these two superpowers is improbable but possible. Allison correctly points out that since the 1950s, China has embarked on short, limited border wars—with India in 1962, the Soviet Union in 1969, and Vietnam in 1979. These battles incurred relatively smallcasualties and did not escalate to total war, let alone nuclear exchange. My guess is that the Chinese leaders must have made their calculations and decided they could afford these minor wars without too much damage to China. Given these limited battles in modern history, a short war over the South China Sea or Taiwan or the Senkaku islands cannot be ruled out. The good sense of the American and Chinese leaders, as well as efforts by the international community, will prevent escalation to large-scale war.
If there is a naval battle, my bets are on the United States winning due to its overwhelming military superiority. I do not believe China will take defeat lying down, given the Chinese people’s painful historical memories of humiliating defeats like the Opium War. If China loses a battle with the United States, China will launch a second war against the United States to save face. The result of a second war will probably be such that both sides can spin the situation to claim some sort of victory. Then they will make up and resume the world’s most important economic relations between them.
While this book focuses on Thucydides’ trap, it does not take into account the “Kindleberger Trap,” a term credited to Joseph Nye, an emeritus professor at Harvard University and a former U.S. assistant secretary of defense. This trap was named after Charles Kindleberger, an American economic historian. In an article, “The Kindleberger Trap,” in Project Syndicate on January 9, 2017, Nye wrote,
As U.S. President-elect Donald Trump prepares his administration’s policy toward China, he should be wary of two major traps that history has set for him. The “Thucydides Trap,” cited by Chinese President Xi Jinping, refers to the warning by the ancient Greek historian that cataclysmic war can erupt if an established power (like the United States) becomes too fearful of a rising power (like China). But Trump also has to worry about the “Kindleberger Trap”: a China that seems too weak rather than too strong.
Charles Kindleberger, an intellectual architect of the Marshall Plan who later taught at the Massachusetts Institute of Technology, argued that the disastrous decade of the 1930s was caused when America replaced Britain as the largest global power but failed to assume Britain’s role in providing global public goods. It resulted in the collapse of the global system into depression, genocide, and world war. “Today, as China’s power grows, will it help provide global public goods?” Nye wonders.
At the global level, public goods—such as financial stability and freedom of the seas—are currently provided by the United States and the U.S.-led multilateral institutions like the World Trade Organization (WTO). The Trump administration has expressed disdain for the WTO, while the United States, Europe, India, Japan and Australia are suspicious of the Belt and Road Initiative, China’s project to connect with other regions through infrastructure projects like ports, roads and airports. This raises the question—who will take up the mantle of providing global public goods. Even if the world breathes a sigh of relief that the United States and China do not fight, the world may be hit by a severe financial crisis wrought by the Kindleberger trap. Allison writes,
What America needs most at this moment is not a new ‘China strategy,’ but instead a serious pause for reflection. If the tectonic shift caused by China’s rise poses a dilemma of genuinely Thucydidean proportions, then calls for a ‘more robust’ or ‘muscular’ pivot will amount to little more than taking an extra-strength aspirin to treat cancer. Constructing a strategy proportionate to this challenge will require a multiyear, multiminded effort.
I agree with Allison that the U.S. government needs many years, much thinking and sustained effort to formulate a long-term strategy to cope with a rising China. Allison recommends, “China and the U.S. would be better served by not passive-aggressive ‘should diplomacy’ (calling on the other to exhibit better behavior) or by noble-sounding rhetoric about geopolitical norms, but by unapologetically pursuing their national interests.” In high-stakes relationships, he writes, predictability and stability—not friendship—matter most.
Allison’s recommendations do not go far enough. The rise of China’s global economic clout through its Belt and Road Initiative will be accompanied by the emergence of a new form of capitalism very different from the Washington consensus. Trillions of U.S. dollars are estimated to be needed for the Belt and Road, much of which will be raised from the Chinese financial hubs of Hong Kong, Shanghai and Shenzhen. The United States must learn to adjust to the state capitalism of an authoritarian government, different from U.S. capitalism associated with democracy and the free market of ideas. It will be a formidable challenge for these two forms of global capital to coexist, for which I presently do not have an answer.
The book relies too much on Lee Kuan Yew for insights into China, quoting the late statesman many times. Although Lee’s views were respected internationally, the Cambridge-educated Lee sees China through Western spectacles. Allison should have sought more sources for a broader perspective on China.
Toh Han Shih holds a B.S. in physics from the California Institute of Technology, and a doctorate in physics from Oxford University. He also has a Master’s in Southeast Asian Studies from the School of Oriental and African Studies in London, and has completed a part-time Master’s of Economics at Hong Kong University. Han Shih is a Singapore-born writer with twenty years of experience in business journalism. He lives in Hong Kong. In December 2016, he published the book, Is China an Empire? Previously, he worked as a journalist at the South China Morning Post in Hong Kong for nearly ten years. From 2007 to 2008, he worked at Kroll, and in the late 1990s, he was a reporter at the Business Times in Singapore.
 Toh Han Shih, “Trump’s First Counter-Policy to China’s Belt and Road: Limits of U.S. Power To Confront Chinese Economic Strength,” The Calcutta Journal of Global Affairs 2, no. 1 (May 2018): 23-33.
 Joseph S. Nye, “The Kindleberger Trap,” Project Syndicate, January 9, 2017.