US-China Rivalry: Implications for the World

Author Name: Maheen Shafeeq      17 Dec 2020     Global view

Amid the Sino-US rift, the world is caught between two giants. Their growing antagonism has compelled many states to seek refuge behind either of these globally contending hegemonic powers. Notably, the notion applies more to the states with geographical proximity to the US under the New United States-Mexico-Canada Agreement or USMCA, replacement of NAFTA, that holds a crucial clause (Article 32.10) aimed at isolating Beijing. The clause gives Washington veto power over Mexico and Canada if either of them attempts to conclude a Free Trade Agreement with a non-market economy without US approval.

Similarly, Washington has proposed similar clauses in trade agreements with Japan, South Korea and other ally states compelling them to isolate China. Likewise, Latin America is under pressure to limit multilateral engagement with Beijing. If Trump had been re-elected, an even more aggressive policy towards Latin America was expected that may have included suspension of aid and additional tariffs. While under the Biden administration, chances are that these states may be able to pursue collaborative regional options. However, the pressure on Latin American states to pick a side will persist. Nonetheless, the Latin American states believe that they must not do so. The region must favor diversity in its international partnerships and seek recourse to economic growth. It cannot pin hopes on one partner to overcome its challenges.

Another region that is feeling the heat of this geopolitical tussle is the South China Sea and the ASEAN states. Both the US and China have increased interaction with ASEAN states to influence their decision to pick side. Where in terms of economic influence, China is pushing to strengthen its Belt and Road Initiative projects and COVID-19 recovery plans; the US has proposed an alternate option for regional development under the Blue Dot Network. Both the powers are attempting to counterbalance one another in South China Sea through extended military activities. China is sending aircraft carriers to improve its fighting capacity in the region, while US jets patrol over the Sea to conduct reconnaissance and prepare for future long-distance missions.

Beijing has expressed its concerns over the presence of non-regional actors in South China Sea as ‘highly risky’. While the US believes it is upholding peace, stability, right to sovereignty of regional states, and protecting international law in the region. The ASEAN states have managed to create a balance vis-à-vis fostering ties with both the global powers. Singapore and Thailand perceive that they have indigenous market capacities and refrain from band-wagoning.

Indonesia, likewise, maintains an independent and sovereign foreign policy. Though, it has declared Chinese ambition as ‘aggressive’, it will not cross the line whereby it aligns with the US’ confrontational policy towards China. Emboldened by neutrality, Indonesia has many times turned away Chinese coast guards and fishing vessels in North Natuna Sea, and has also rejected US request for landing and refueling for its P-8 maritime patrol aircraft. It appears that Indonesian foreign policy would remain unaffected despite such matters with the US and China.

While Vietnam’s foreign policy has adopted a rather different approach of impartiality, it has allowed presence of US bases on its territory, but has refrained from directly calling out China while stressing on the need for a rule-based peaceful regional order.

The ASEAN states, therefore, do not project a uniform approach towards reconfiguring either with US or with China as the main external player for the region. They must not overlook their collective leverage as a strategic and economic bloc - fragmentation may make their bargaining power weaker. Therefore, the bloc must maintain its autonomy and pursue its regional interests. The Biden administration must acknowledge that the US needs to be even more cautious when dealing with these states.

Similarly, the closest US allies - Britain and the European Union (EU) are in a similar situation, such as on the matter of Huawei and 5G, where they are expected to say good-bye to their largest market, China. Nevertheless, the British government is inclined towards keeping Huawei technology out of the most sensitive parts of the country’s 5G network, and has shown reluctance to choose sides. The EU has disclosed similar plans. Both are caught in a dilemma with US as an ally and security provider, and China as the largest trading partner. European countries are reluctant to pick a side because they do not face a direct threat or an enemy in this case. In case of the Cold War, Europe was under direct threat from Russia that made them ally with the US to form NATO. Unless and until Europe sees a direct threat from China, it will not join the anti-China camp. For now, it seems that Europe is pursuing its economic interests with China, however, vigilantly. Given the havoc wreaked by COVID-19 in European states as its second wave continues, it is more likely that Europe and China would continue to depend on each other.

All the states have their reasons to distance themselves from Sino-US competition. What remains to be seen is how long states can resist alignment to one side or the other. It can be said that as long as national interests and security are not at stake, these states are likely to stretch the phase of impartiality.

Maheen Shafeeq is a researcher at the Centre for Aerospace & Security Studies (CASS). The article was first published in The Asian Telegraph. She can be reached at

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