Covid-19, US-China Competition – and a Multipolar Future?

The Covid-19 pandemic is a significant shock to international politics and the global economy. Its impact is far-reaching: disrupting global supply chains, accelerating deglobalization trends, exposing weaknesses in the global governance system, revolutionizing global health and travel protocols, worsening human security, and intensifying great power competition.

History tells us that during moments of great crisis and shocks, tectonic shifts in the international system could take place, leading to changes in the balance of power. Examples of recent shocks to the international system include the September 11 terrorist attacks in 2001 and the 2008 Global Financial Crisis (GFC). The former led to changes in the way the world – not only the United States – perceives threats as emanating from non-state actors, leading to a reallocation of global and national resources to mitigate this threat. The 9/11 terrorist attacks also caused the United States to shift focus away from traditional rivals such as Russia and China, with significant consequences for the balance of power in the Asia-Pacific region.

Prior to that, the 2008 GFC undermined global financial security and exposed weaknesses in the Western economic system, which led to a shift in the balance of power as countries in the East, in particular, China, emerged largely unscathed. Further back in history, the two world wars led to major shifts in the balance of power, created a new world order and led to a proliferation of international regimes. Although international relations analysts have yet to explore properly the impact of past pandemics such as the 1918 flu outbreak on international order, evidence suggests that the pandemic over a century ago had significant impact on trade policy that triggered a protectionist spiral independent of the effects of World War I.

What does the present global health crisis have in store for the regional and international order? Although a complete overturn of the world order is unlikely, the pandemic has nevertheless accelerated and magnified troubling pre-Covid-19 trends.

A deepening and broadening of the US-China strategic competition

Instead of working together to combat the virus, China and the United States have taken their rivalry to the next level. From the trade war that began before the pandemic, US-China rivalry has expanded into the technological and public health realms. Biotechnology and vaccine development have become new areas of competition. Both sides neither recognize nor approve the use of the other’s vaccine.

In the initial stages of the pandemic, the inability of institutions and governments in the West to contain the spread of the coronavirus led to a feeling of triumphalism on the part of China as it viewed this as further proof that the West, in particular, the US, is declining. In 2021, however, it has become clear that the United States and other Western nations are now adapting to life with the virus, made possible by effective vaccines. The ability to open up has helped economies recover and strengthen, mitigating the impact of the pandemic on livelihoods.

A new, unstable bipolarity

By deepening and broadening the conflict between the US and China, the pandemic has consolidated a new bipolarity in the regional and international order. In terms of comprehensive national power, defined in economic and military terms, other countries, including rising powers like India, are far behind the two leading states. Even though China still trails the United States in military and economic capabilities, it is getting closer.

China challenges the US in several other fields. For one, China leads in the global effort to set technological standards and rules while the US has fallen far behind. Considering how technology provides the building blocks of the new economy and the military, the most technologically advanced nation will be the future number one. In addition, the pandemic has further called into question US global leadership, which had already been eroded by Donald Trump’s “America First” policy. To fill the gap left by the Americans, China portrays itself as a responsible great power, upholding free trade and engaging in vaccine diplomacy.

The late neo-realist Kenneth Waltz argued that bipolarity was the most stable form of world order. His prediction was based mainly on his observations of superpower rivalry during the Cold War. He argued that with two great powers maintaining order in the international system, there is more predictability and stability, as it is unlikely that allies will easily switch sides (as had happened during World War I). The great powers, he believed, would be unlikely to rely on allies but on their own capabilities, which reduces uncertainties. Waltz also contended that repeated crises in a bipolar world would cause the two competitors to be more cautious.

While Waltz’s theory may still hold depending on how the current bipolarity evolves, the conditions of bipolarity during the Cold War were different from the bipolarity now. At that time, the United States and the Soviet Union were the two strongest powers that emerged from World War II, creating a bipolar situation. The dominant power before them was Great Britain, which was considerably weakened by the war and unable to continue to lead the world.

The current bipolarity emerges from US unipolarity post-Cold War. US hegemony has undergirded the liberal international order and produced public goods that helped maintain peace and stability. It is uncertain that the current bipolarity can be stable as the United States seeks to retain its status as world number one and China seeks a place in the international order that is commensurate with its power, reshaping the world according to its preferences. Taiwan is now a hot-button issue, as are the territorial disputes in the South China Sea. Without accommodation from both sides and zero-sum competition, in this context, bipolarity is highly destabilizing.

Furthermore, the superpowers must be willing and able to lead. During the Cold War, the United States provided leadership against the Communist bloc, and undertook sacrifices such as opening up its economy and maintaining overseas bases without expecting reciprocity from its allies. The Trump administration’s demands that its allies “pay up” called into question US leadership. With Trump cutting off funding to the World Health Organization (WHO), US leadership in dealing with pandemic was practically non-existent. Even though the administration of President Joe Biden has shown a greater willingness to lead, America is nevertheless a wounded nation, rife with ideological divides and political disunity, and a fragmented society, all worsened by the pandemic. What has been called into question is not just America’s willingness to lead but also its ability to do so.

China’s attempts at global leadership are also inconsistent. Chinese leader Xi Jinping, for instance, did not turn up at the recent UN COP26 summit – the biggest climate change conference since Paris in 2015. China appears to be inward-looking at the moment, as it struggles with keeping Covid-19 out by shutting its borders, while the rest of the world is opening up. An inward-looking country cannot provide global leadership.

In Asia, trust in US and Chinese leaderships has eroded. An annual survey by the Singapore-based ISEAS-Yusof Ishak Institute showed that Southeast Asian elites do not trust either country. Since the survey was launched in 2019, trust in China has been trending downwards. In the 2021 survey report, 63 percent of respondents do not trust China “to do the right thing”, making China the least trusted among the United States, India, Japan and the European Union (EU). China’s economic largesse and vaccine diplomacy appear not to have the desired effect of drawing Southeast Asian countries closer. Instead, worries that China’s economic heft, military might, and more strident foreign policy would threaten the sovereignty and interests of its neighbors have risen. Although the survey shows that trust in the United States increased significantly towards the end of 2020 with expectations that the Biden administration would likely step up engagement with the region, Japan and the EU remain the region’s most trusted strategic partners.

Meeting of the Ottawa Group of countries working to reform the multilateral trading system, March 22, 2021: Middle powers can lead when when tensions in US-China relations hinder progress on global challenges (Credit: WTO)

A key factor that contributed to a generally stable bipolarity during the Cold War was a tacit recognition between the two superpowers of each other’s right to lead in their respective spheres of influence, even if that recognition was grudging. They kept out of each other’s “neighborhoods” – the United States in Western Europe, East Asia and Latin America; the Soviet Union in Eastern Europe – with each taking steps not to intervene in the other’s turf. Such tacit acceptance on both sides prevented wars from breaking out in the areas which were most critical to their respective interests.

Today, a tacit understanding of each other’s legitimate right to lead is absent between the US and China. This dynamic is particularly worrisome in East Asia, where each has overlapping spheres of influence in the Indo-Pacific and both are contending for dominance.

Bipolarity in the current context is also highly unstable because of the domestic politics of both countries. Covid-19 has undermined faith in governments, exacerbated social issues and exposed fractures in society, such as inequality and uneven access to healthcare. The fault lines in American society were made worse by polarized views on masks and vaccines.

Domestic troubles are also brewing in China as it struggles to maintain a zero-Covid-19 policy. China’s economic slowdown, power shortages, pursuit of “common prosperity”, and property market debt have led to a spike in the Chinese leadership’s worries about domestic stability. These challenges come at a time when the Chinese Communist Party is celebrating several important milestones including its 20th National Congress in 2022.

Governments facing unhappy and discontented populations are thus increasingly under pressure and sensitive to public opinion and nationalist sentiments. This increased sensitivity is playing out in the foreign-policy arena. Governments have in the past constructed an external enemy as a form of distraction or to unite their people. Indeed, the images that the Americans and Chinese have of each other have hardened, with each blaming the other as the source of the virus and the one responsible for destabilizing the international order.

The rise of middle powers

If the current bipolarity is unstable, what does this mean for the world order? The pandemic has unequivocally demonstrated that middle powers can lead, not just in regional matters but also globally, when they cooperate. When uncertainties arise in the international system, middle powers play a much bigger role in stabilizing the international order as the resources and attention of the great powers are stretched. In light of the pandemic and the intensification of US-China rivalry, middle powers have continued to uphold free trade and globalization, safeguard the rules-based order, shore up international regimes, and sought to improve global governance.

With the exception of Australia, which has chosen to side with the United States, middle powers have thus far stood their ground and refused to cave in to pressure from the two superpowers to take sides. Free-trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), were brokered by middle powers.

Middle powers have also worked together to ensure that the global supply chain remained intact in the midst of the pandemic and the trade war. To manage the risks of technological bifurcation resulting from US-China competition, they are also working together to ensure that there are more interoperable systems and standards to promote cross-border data flows and digital trade. In the World Trade Organization (WTO), middle powers such as Australia, Brazil, Canada, Japan and South Korea are working on reforming the multilateral trading system. Australia, Japan and Singapore are pushing forward consensus on e-commerce regulations. Singapore has also pursued digital economy agreements – treaties that establish digital trade rules and digital economy collaborations between two or more economies – with Chile, New Zealand and South Korea, and are in negotiations with several others.

With middle powers playing a larger role in maintaining international order, could this signal a transition to a multipolar world order?

This would depend on how the current bipolarity plays out. If the United States and China could manage their rivalry and cooperate in areas of common interest such as climate change and preparing the world for future pandemics, we may transit to a more stable bipolarity. Not all competition is bad if both superpowers could be productive and cooperative at the same time as had happened in the past, when the United States and the Soviet Union worked together to eradicate smallpox.

The US and China made an unexpected deal during COP26, releasing a joint statement that asserted their intention to collaborate on climate challenges during this crucial decade when significant action on the issue is needed. This is a step in the right direction. However, if the two superpowers continue to engage in virulent and counter-productive competition without learning to cooperate, middle powers will continue to step in, offering leadership and balance. In this case, the geopolitical future will necessarily be multipolar with uncertain implications for the stability of the international system.