Although Professor Cheung's book came out some time ago, his assertion that the key to sustaining the stability of the international system lies in China shifting from a “developmental” economy to a “entrepreneurial” economy still rings true. Writing in the early days of the Trump administration, Cheung correctly anticipated that President Trump would pull the United States back from the role of global leader. As Cheung argued, by the time Trump became president in 2017, the era of unipolarity and so-called American hegemony was over. Stubborn insurgencies in Afghanistan and Iraq had demonstrated the limits of American power and fuelled domestic political pressures for a retrenchment. Thus, even before Trump's election the US had begun to disengage from the troubled Middle East and Southwest Asia and “pivot” to face the rise of a new power in East Asia – the People's Republic of China.
Given Trump's avowed goal of accelerating the withdrawal of the US and confronting China over trade, Cheung questioned whether China would partner with the US as an upholder of the open global order or would instead seek to construct some new Sino-centric global order. For Cheung, the answer lay in whether China could upgrade its role in the global economy from that of “the factory of the world” to one of global entrepreneurship and innovation. If China made such as shift, Cheung argued, then it would remain among the major beneficiaries of the open global economic system and hence would likely assume the role of a major stakeholder in sustaining and deepening an interdependent globalized economy.
At the time, Cheung was relatively optimistic. He anticipated that the “retreat” of American power under the nationalist, “America first” Trump administration would be offset by a more active but fundamentally status-quo China. Given developments since 2017, some might question whether Cheung was perhaps Pollyannaish and underestimated the danger that a retreating US would face from an assertive and increasingly revisionist China. The protracted Sino-American trade war, the weakening of ties between Washington and its long-time allies in Tokyo and Seoul, a seemingly erratic and often contradictory American policy toward China, and, more recently, a bitter war of words over the worldwide coronavirus pandemic, certainly make it tempting to dismiss Cheung's optimism.
Cheung's analysis, however, forces serious analysts to consider what the sound and drama of the past several years really signifies. As Cheung argued, the long-term trajectory of the Sino-American power balance remains largely unchanged. China is rising relative to the US. The United States, however, remains a global superpower. Moreover, all the talk in Washington about “decoupling” notwithstanding, the two economies remain deeply inter-dependent. The fundamental reality thus remains that China is inexorably emerging as a “second” global power. Given that US can, at best, slow its relative rise or, at worse, move in directions that might fulfil the dire predictions of proponents of the “Thucydides Trap,” Cheung's assertion that the key to the future of Sino-American relations lies in whether the Chinese leadership restructures China's economy and hence its relationship with the global economic system remains true.
At its core, the deterioration of Sino-American relations has less to do with shifts in relative power than the impact of the deepening of Sino-American economic interdependence and the domestic repercussion of that deepening on working Americans. Trump was able to capitalize on fears that the rise of the Chinese economy was hollowing out the American economy. Trump told voters that he would “make American great again” by forcing a redefinition of the Sino-American economic relationship and halting the “flood” of cheap Chinese imports that were “robbing” Americans of their jobs. In essence, Trump and his supporters viewed the Sino-American economic relationship as a zero-sum game in which gains by China were axiomatically losses for the US. That being the cases, then Cheung was correct that the key to averting conflict between the US and China lies in shifting the perception of their economic relationship from a zero-sum game to the positive sum, “win–win” game. As Cheung further argued, such a shift requires that China move way from its dependence on manufacturing and exports to a new innovation-driven economic model that would reduce its direct competition with the American industrial economy, increase the “backflow” of Chinese capital into the American economy, and accelerate the technical upgrading of American manufacturing. Cheung's analysis thus suggests that the deterioration of Sino-American relations in the years following Trump's election has been driven in part by domestic American politics and economic fears of a rising China, but also by Beijing's inability to shift the Chinese economy from developmentalism to entrepreneurialism.
