[Inside Chodong] US and China Shake Hands, But Optimism Is Premature

Reconciliation Mood Between U.S. and Chinese Leadership
Difficult to See This as a Sudden Shift

President Xi Jinping and Secretary of State Tony Blinken shook hands. Could the hegemonic competition between the ‘G2’?the United States and China?be easing? Is there now enough room for the wounds sustained by our companies amid the clash of giants to heal? At this point, no one can answer these questions, but it would be unwise to assume an optimistic outcome.

It is necessary to look at how past competitions over technological hegemony unfolded. In the 18th century, Britain led the world with the steam engine, enjoying decades of Pax Britannica. As railroads were laid and steel was freely used, France and Prussia challenged Britain. After the world wars, the United States took the helm of global hegemony. It developed power grids, considered one of the greatest engineering achievements of the last century, popularized automobiles, and refined chemical technologies. What is essential to securing hegemony is technology based on science and engineering. Throughout human history, dominant groups have relied on resources others lacked, and in modern society, the most important resource is technological competitiveness.

The Pax Americana continues into the 21st century. In the 1970s and 1980s, the Soviet Union and Japan expanded significantly, but the United States easily outpaced them. At times, it fostered a climate of fear (the Cold War) and did not hesitate to go to war when necessary. It forced adversaries to their knees by leveraging trade and financial orders accepted by the international community. The next challenger is China. What has changed is that the opponent’s foundational strength is formidable.

Initially, the United States likely underestimated China. It was the U.S. that led efforts to incorporate China into the World Trade Organization (WTO) system, aiming to tap into China’s vast market. The U.S. probably judged that by making China follow the rules it set in international trade, it could maintain its hegemonic status longer. Although the outcome is not yet decided, over time the U.S. has declined while China has grown. Following former President Donald Trump, the Biden administration has openly sharpened its stance against China, acknowledging that the current hegemonic competition is no easy matter. China also understands that to seize hegemony, it must create new rules favorable to itself and advance its science and technology beyond that of its rival.

Semiconductors, batteries, and pharmaceuticals?once purely commercial sectors?are now treated as security issues under U.S. leadership. It has become clear that supply chains can collapse at any time due to unforeseen natural disasters or the obstinacy of certain countries. Added to this is the political leaders’ determination to manage these cutting-edge scientific and technological industries within controllable boundaries. Although capital crosses borders and it has become meaningless to assign nationality to companies, political leaders who directly influence such capital and companies must still hold nationality within a country and secure political support to survive. They actively leverage hegemonic status to protect jobs directly linked to political backing.

Although a mood of reconciliation has emerged between the leaderships of the United States and China, it is difficult to view this as a sudden change. Chinese battery companies have been allowed to build factories in the U.S., and Ford and Tesla?icons of the American automotive industry?have deepened their close ties with Chinese companies. American electric vehicles using Chinese batteries have quietly received tax credit benefits. While they growl at each other on the surface, this shows that attitudes can change anytime if it is beneficial. Rather than a chicken game aimed at excluding each other, it seems more appropriate to see this as a pause for breath at a manageable level of mutual control.

This content was produced with the assistance of AI translation services.