The U.S. and China are Falling into the Thucydides Trap
In 2015, Harvard professor Graham T. Allison argued that the United States and China could be at war within a decade.
Five years later — and with five years left to go — Allison’s prediction is slowly coming true. We aren’t there yet, but the story is unfolding in a warlike direction. Military conflict between the United States and China is conceivable by 2025, if not before then.
Here and now, in 2020, U.S.-China tensions are approaching a boiling point. Regardless of who wins the 2020 election, and which party controls the U.S. senate, these tensions are here to stay.
To understand why the U.S. and China are headed toward conflict — and why Professor Allison’s “Thucydides Trap” theory could be correct — we can look to recent headlines.
On Sept. 18, the Trump administration announced a major escalation in an increasingly chilly U.S.-China technology stand-off. TikTok and WeChat were on a list to be immediately banned in the United States and removed from app stores for U.S. consumers.
An outright ban of this scope — TikTok is reportedly used by 100 million Americans — would have been unprecedented, and would have risked equally unprecedented retaliation from China (like a ban of Apple or Microsoft, perhaps).
The TikTok and WeChat ban, originally set to begin one minute from midnight on Sept. 20, was temporarily postponed on news of a pending deal. While the terms are not yet finalized, Oracle looks set to acquire 12.5% of TikTok, and Walmart 7.5%.
The idea is that Oracle will provide cloud services for the data collected on TikTok’s 100 million or so American users, and Walmart will provide an e-commerce and product fulfillment angle.
There is also a strange and unclear proposal from the White House asking that Bytedance, TikTok’s parent company, provide billions of dollars for an American history education initiative.
The point here, at least superficially, is to ensure TikTok is majority-owned by American interests, with a U.S. headquarters and U.S.-controlled servers.
While Bytedance will continue to own 80% of TikTok, the Oracle-Walmart stakes technically fulfill the majority owner requirement because U.S. shareholders own 40% of Bytedance, bringing the total to 52%.
All of the above assumes the Oracle-Walmart deal actually goes through (it is still being finalized as of this writing).
If the deal does not go through, for whatever reason, then the TikTok and WeChat ban that was announced on Sept. 18, then postponed, will likely be enacted. At that point, China could do something drastic with respect to American companies doing business in mainland China — Apple most immediately comes to mind — and at that point, billions of dollars in revenue, if not tens of billions projected out to future years, will be under threat.
The drama seems a bit much for a smartphone app mostly used for lip-syncing songs and making 20-second videos of teenagers acting silly.
But it makes sense because, just as screaming fights between a married couple are typically not about the superficial topic at hand — the real trouble is deeper and unspoken — so it is with the U.S. and China.
The U.S. has reacted with fear and suspicion to the TikTok app because, for all its silliness, TikTok is the first overseas technology to make real inroads into the habits – and smartphones – of 100 million Americans.
When it comes to tech, the United States is used to being the conquering imperialist. Google, Apple, Amazon, Netflix, and so on create the apps, websites, and experiences that dominate other nations. There hadn’t been much of a reversal — until TikTok.
Then, too, a significant percentage of Washington, and a non-trivial percentage of Americans, view China as a growing national security threat.
The argument is that China has a twofold power projection strategy for global dominance.
First, American hawks see China looking to establish physical outposts of hard power throughout the world. This means things like building a port in an emerging market country, and then enabling a military presence in conjunction with that port — repeating this exercise until blanket coverage of key “choke points” are achieved. By this view, China’s “Belt and Road” initiative is really a military outpost initiative.
Second, American hawks see China establishing soft power inroads to go with the hard power outposts. This means finding ways to shape, manipulate, or control national culture from the inside out.
China is perceived as a special threat here because, in the eyes of the American hawks, there is no such thing as a truly neutral Chinese company — because of the way the constitution of China’s Communist Party (CCP) is structured, every Chinese company is a potential conduit for government espionage.
The American hawks have a point in their concerns. China really does seem to be pursuing a twofold power projection strategy.
But those with a sympathetic view of China also have a fair response: Over the course of the 20th century, the United States did exactly the same thing.
By this reasoning, America does not need a strategy for projecting hard and soft power around the globe – because it already happened after World War II. The dominance of American pop culture, the presence of American military outposts in dozens of countries, and the ability of the U.S. government to financially punish bad actors in the global financial system by cutting off their access to dollar flows all amount to the U.S. already having the exact kind of power that China is now feared to be seeking.
And this takes us back to Graham T. Allison, the Harvard professor who predicted, back in 2015, that the U.S. and China could be at war within a decade.
Allison’s prediction is based on something called “the Thucydides Trap,” which is based on a quote from the Greek historian Thucydides from the fifth century BC:
“It was the rise of Athens, and the fear that this inspired in Sparta, that made war inevitable.”
In the Thucydides trap metaphor, China is Athens and America is Sparta.
The basic concept is that, when a rising power is observed by an existing great power, the existing great power becomes fearful.
The fear might be wholly justified, or it might not be justified at all (or somewhere in between). Either way, fear can lead to countermeasures, increasingly strenuous containment efforts, and low-level conflict escalation over a period of years — with war as the ultimate result.
To back up his prediction, Graham T. Allison and his research team analyzed the historical record to conclude that, in 12 out of 16 cases of great power clashes over the past 500 years, the result was war.
Based on that rule of thumb, if the analysis is on point, the odds of a U.S.-China military conflict could reasonably be estimated at 75%.
It is also sobering to hear how bloodshed was avoided in the 25% of cases (4 out of 16) where war did not come about. “When the parties avoided war,” Allison observed, “it required huge, painful adjustments in attitudes and actions on the part not just of the challenger but also the challenged.”
As matters stand here and now, we are not seeing “adjustments in attitudes and actions” on either side when it comes to the potential for U.S.-China conflict.
In fact, one might argue we are approaching a point of no return where attitude adjustments become impossible, with each country — an established great power and a rising one — seeing the other more and more as a long-term existential threat.
The best hope for avoiding a U.S.-China military conflict, if such a hope exists, is probably the deeply enmeshed web of commerce and trade relationships between the two countries. But as we are seeing now, with escalation around the TikTok situation, those ties are being frayed, and potentially unwound.
Then, too, a threat of U.S.-China conflict and trade war escalation leading to technology freeze-out or something worse, can remain theoretical in the eyes of Wall Street as long as no American company’s revenue and profit outlook are impacted.
But unfortunately Apple, and a handful of others, have major exposure to China, in terms of both supply chain fulfillment, device assembly, and mainland China sales revenues.