Beyond Managed Competition

>> Elizabeth Economy: One of China's greatest strengths on the global stage is its ability, the Chinese leadership's ability to tell its companies what to do, to command that. I want you to go invest here. Yes, you're gonna lose money for the next ten years, but that's okay because you're serving our national strategic interest.

>> Elizabeth Economy: So that's sort of the landscape of the Biden administration policy, three parts competition. Well, really, I would say nine parts competition, one part cooperation. So what should we think about doing differently? Let me just finish up with a couple of thoughts. I think to begin with, the US Needs as comprehensive a vision for itself, for its place in the world and for the international system as the one that China has put forward.

I don't think that the idea that basically our strategy is to compete, to out compete, gets at the full range of challenges that China presents to us. But that means that we're gonna need to address some pretty fundamental issues. Around which I think there is not necessarily consensus in our strategic, our foreign policy community.

First, as the United States, do we still want to lead, right? Do we want to remain the preeminent, if not dominant power in the world, or do we want to hunker down and focus more on what's going on inside our own country? Do we not think that that external engagement suits our purposes the way that we have previously?

How do we integrate our political values around democracy, around the rule of law? How do we integrate those with our security and economic interests and priorities? We have many examples in the recent past where the United States seems to focus on human rights in some instances, for example, in agoa as a reason to push three countries out of the agreement for horrible human rights practices or new laws that are being passed, but at the same time is willing to deal with other countries that also are quite repressive because they have strong strategic rationale for us.

So I think developing a theory around that would be helpful, especially in preventing us from being accused of being hypocritical. I think with China there is a question of do we just want to de risk or are we actually seeking to decouple? If you spend any time with members of Congress, you will quickly find that some of them actually are looking to decouple.

Some of them are not interested actually, necessarily, in having Starbucks sell lattes in China, they don't see an advantage. So I think, you know, that's another kind of issue that we actually need to have a debate about. What Is what is de-risking, what is the boundaries of de-risking?

Or are we really seeking to decouple? And then, I think, you know, something that emerged first in the Trump administration is do we need a new model for burden sharing? And I think we've seen an evolution already in the call for other countries to step up and assume, especially in the security realm.

But I think also just in terms of policy response to China, we will need other countries to step up and assume. So what does that mean for US Leadership on the global stage? As other countries rise, what does that do to the position of the United States? How do we relate to other countries in a changed world?

Or do we just let those changes happen to us without actually having sort of a strategic sensibility for what we want to have happen? So I think that's a really important set of discussions that the next administration needs to undertake. I'll move quickly through the rest of them so we have enough time for questions and comments.

I think, second, we need to continue to bolster the foundations of US resilience. And I'll say I just flew in, actually, from Dublin last night through to New York and then to here this morning. I spent time with about 20 members of congress in a group where there's sort of China experts meeting with members of congress.

And they are all focused on this, right? So whether it's in defense or it's immigration or it's innovation or it's strengthening our polity. How do we get our country unified around developing a more resilient United States? How do we get policy alignment on these really critical issues for our strength moving forward?

Third, I think one of the takeaways I had from my time at the Commerce Department was, you know, we need to do a better job of working with, of leveraging our private sector. One of China's greatest strengths on the global stage is the Chinese leadership's ability to tell its companies what to do, right?

To command that I want you to go invest here. Yes, you're gonna lose money for the next ten years, but that's okay because you're serving our national strategic interest. The US Is a larger source of investment in Africa, in Latin America, in Southeast Asia, than China is. But very few people actually realize that because we have private sector investment that goes in.

Our foundations do amazing work, but that does not redound to the US, it doesn't redound to the US Government. So how do we establish partnerships and linkages that build a sense of coherence/cohesiveness between our private sector and our public sector? In ways that amplify all the work that the United States does.

I will say we did one project early on for the Indo-Pacific Economic Framework, IPEF. Where we got 14 tech companies, US tech companies like Google and Microsoft and Apple. To deliver 500,000 digital skilling opportunities to women and girls in the IPEF emerging economies. And when the minister of Fiji saw that four companies.

Right, a trade minister from Fiji saw that four companies were going to be now helping the women and girls in Fiji. Four companies that would never be doing this otherwise, given the size of the market there. He said, this is why it is so great to be part of this initiative.

Thank you, United States. So it was the perfect moment, right? It just encapsulated what we can do together if we bring it all together and we brand it in that manner. And then finally, I think we need to do a better job of engaging emerging and middle income economies.

The administration has done a lot of work with our European allies and with the advanced economies of Asia. And through IPEF, also some of the emerging economies in the Indo-Pacific. But despite many, many cabinet secretaries and deputy secretaries traveling to Africa, for example, there isn't really a strategic sense for how we are engaging these economies.

They should be at the table when we're talking about AI governance. It shouldn't be the G7 or the US, EU, TTC deciding a set of rules and then saying to all the other countries, here, sign on to these principles. I think, if we're thinking about this as a battle between the United States and China for influence and for shaping the international system of the future.

Is not simply being fought with Europe and the other advanced economies. It's being fought across the world. It's being fought in the United Nations. And we need to bring them to the table in a way that is meaningful to them. And then last thing I'll say is that we need a trade agenda.

So I will stop there and again welcome your questions and your thoughts. Thanks.