Valdai Club

Balancing and competition between the US and China will take place primarily in the economic realm, where the two nations are closer to parity. Balancing will be much less intense in the military realm, where China will be deterred in by US power. Economic balancing is much safer than military balancing and the current system will be more peaceful than the Cold War, writes Cliff Kupchan, Сhairman and Director of research at Eurasia Group.

The international system currently is one of emerging bipolarity, anchored by the US and China. This development alarms most observers, who fear a second Cold War like that between the US and the Soviet Union. But the new system will be quite different, with much less threat of military conflict between the great powers. This essay will explore the impact of emerging bipolarity and the coronavirus pandemic on the international system, and in turn on Russia. 

We are in a period of emerging bipolarity because the US and China will be the world’s superpowers for the foreseeable future. The global distribution of power determines the nature of any system; its characteristics are set by empirical facts, not policy preferences. The US and China have emerged over the past decade as the clear leaders on the most important indices of power – military and economic. The US retains an advantage over China in the military realm; Chinese nominal defense spending in 2019 was about 36% that of the US, according to the Stockholm International Peace Research Institute. The two are much closer in the economic sphere, with the US ahead on nominal GDP and China leading on purchasing power parity. Clearly separating the US and China from the rest, the number 3 county on both military and economic power lies far below China. There are specific, structural, and enduring reasons for their rankings that will not change because of Covid-19. For example, the US has an extremely strong financial system, while China has a very innovative population. 

Soft power also affects outcomes, but to a lesser extent than hard power. It is influence through attraction. Both the US and China have had troubled policies during the Covid crisis and taken a hit to soft power. But the US had far more soft power before Covid and still does. (Pre-Covid, the Portland/USC rankings had the US at number 5 and China in 27th place.) 
Emerging bipolarity has several key characteristics which impact the international system.

The system will be relatively stable (peaceful). Bipolar orders are more stable than the multipolar world that most analysts foresee. Bipolarity increases predictability and transparency in balancing. Also, and very important, balancing and competition between the US and China will take place primarily in the economic realm, where the two nations are closer to parity. Balancing will be much less intense in the military realm, where China will be deterred in by US power. Economic balancing is much safer than military balancing and the current system will be more peaceful than the Cold War.

The broad effects of emerging bipolarity and Covid on the international system are more mixed. While the new system will be stable, intense economic competition and spheres of influence will cause tension.

This essay will now explore the most important trends and their impact. 

First, and counter-intuitively, both emerging bipolarity and the pandemic have peace-inducing effects. Again, bipolar systems tend to be stable, especially when augmented by nuclear deterrence. Covid also makes peace more likely. Covid will cause elites to be more pessimistic about the key question concerning war – “will I win?” The industrial engines of nations that fuel wars slow down. Soldiers do not perform well when they are sick. Leaders know their country is weaker and do not know how the country will endure a war. Wars between states will be less common for as long as leaders are worried about this and a possible next pandemic. 

The second main trend is provision of public goods, which will be more robust than common wisdom expects. The provision of public goods will decline because of the pandemic, but probably not by much. A new, inward vector of elite thinking – to which this essay will turn below -- will generally mean less attention to the global commons. 

Yet both Covid-19 and emerging bipolarity will also impart some counteracting impulses in favor of public goods. The pandemic imparted an enormous shock on all leaders. When leaders believe targeted cooperation can help them and their nations, they act accordingly. In addition, bipolar systems induce a desire by both superpowers to maintain the order, leading to some cooperation.

The record of the Cold War shows that superpowers can cooperate even if they are strong adversaries. The US and the Soviet Union agreed to many nuclear arms control agreements because both thought them in their national interest. 

Also, individual leaders’ beliefs matter. Vice President Joe Biden for his entire career – until the election campaign – was a multilateralist and had an engagement-oriented approach toward China. If elected, he and his team will bring some multilateralism back to US foreign policy. Provision of public goods through multilateral institutions is likely if Biden wins. Public health, climate, and crisis management are areas of possible cooperation. 

But there are also effects of bipolarity and Covid-19 that will be negative for international relations. First, they will amplify fragmentation of the system. Bipolarity, broadly speaking, divides the system in two parts. The virus causes even greater fragmentation. It imparts a sharp inward focus by national elites. Leaders focus on domestic jobs and have less time and funds for foreign affairs. The coronavirus and its inward focus also create synergies with deglobalization and nationalism, and together these three trends stoke fragmentation. 

In turn, the pandemic strengthens decoupling in all its forms. US-China decoupling will be driven by ever more expansive definitions by both countries of national security. High-tech was and will remain the most affected sector. What is new is decoupling 2.0 – the second wave, of which Covid is an important driver. This round will involve global trade, not just US-China, as all nations seek to become more independent. Health care, data, and tourism are the sectors that will likely be affected. 

The second negative trend is development of stronger spheres of influence. No one likes spheres of influence, but they are a fact of life. With an uneven distribution of capabilities comes spheres of influence. Spheres of influence further fragment the system.
The US and China have such vast capabilities that they can absorb a crisis such as Covid-19 and maintain their sway. China will have rapidly expanding influence in Southeast Asia, where countries that have been hit hard by the virus will need Beijing’s economic assistance. Africa will have ties to both superpowers. Europe, the Middle East, Northeast Asia, and Latin America will remain closer to the US. 

For Russia, emerging bipolarity after Covid-19 presents both opportunities and risks. Russia will have an increased diplomatic opportunity of being able to maneuver between the US and China. Given its close relations with Beijing, China will be the preferred partner at least in the short term. But in the new bipolar system, Russia’s leverage may lead it to adopt a more issue-specific orientation over the longer-term. Also, all nations will seek provision of public goods. In the peacekeeping and security realm generally, Russia has an opportunity both to ease conflict and increase its soft power.

Russia will, however, need to navigate economic decoupling caused by both bipolarity and Covid-19. The main fissure will be between the US and China on high-tech, an arena where Russia and all nations may have to choose sides. Despite Moscow’s close relations with Beijing, the ability to work with and purchase from the dynamic US tech sector will remain very important. Also, the new system will clarify Russia’s position as a great power, if one with great reach in the political-military realm. To craft effective policy and avoid over-reach, policy makers will need to possess an accurate view of Russia’s capabilities.

To conclude, it is a mixed picture. But we need not fear so much that the future international system will lead to chaos. Both Covid and emerging bipolarity provide drivers for peace and cooperation. There is reason for hope.