China vs. America: The Geopolitical Olympics

Watching the extraordinary performance of athletes competing in the Paris Olympics is a humbling experience. It is amazing to see what fellow human beings are capable of. Each time an athlete beats the previous world record, I cheer. But like most Americans viewing coverage of these events, I’m certainly not neutral. I note which countries’ athletes win gold and which do not. I’m heartened to hear our national anthem played first and most often at the podium where the medals are awarded.

In this Olympics, as in most other races in the world today, there are two—and only two—superpowers: China and the United States. As of August 9, the United States has won thirty gold medals, compared to China’s thirty-two. In the total medal count, the U.S. athletes now have gained 104 and their Chinese competitors seventy-seven. When the last of the 987 medals are awarded next Sunday and the French hosts do their best to deliver a closing shock that matches their opening, the odds that the United States will emerge as number one are roughly 80 percent. But, of course, as Yogi Berra taught us: “it ain’t over till it’s over.” As one avid sports fan who also happens to be the President of China, Xi Jinping, has noted: “Unpredictability is what makes a sports match…exciting.”

China’s rise from essentially nowhere to become the leading rival of the United States in the Olympics mirrors its rise in virtually every other dimension to become the defining geopolitical rival in the twenty-first century. Until four decades ago, China had never won a medal in the modern Olympics. Its first medal came at the 1984 Olympics in Los Angeles. A quarter century later, at the 2008 Beijing Olympics, China won forty-eight gold medals to the United State’s thirty-six. As Figure 1 shows, the United States snapped back. In Tokyo in 2021, the United States took home thirty-nine gold medals, a total of 113, compared to China’s thirty-eight and eighty-nine.

Figure 1: Olympic Medals Won

Source: International Olympic Committee, Olympic Games Medal Count

During the presidential campaign of 2020, a group of Harvard scholars chaired by Ezra Vogel and I was asked to prepare a series of reports for the transition teams planning for the administration that would take office after the 2020 election. Specifically, our assignment was “to document what has actually happened in the past two decades in the array of races between China and the US.” The goal was to provide an objective database that would serve as a foundation for policymakers’ fundamental strategic reassessment of the China challenge. (These Great Rivalry Reports were published later as Belfer Discussion Papers). The reports drilled down on the competition between the United States and China in five core arenas: economic, technological, military, diplomatic, and ideological. In each, we identified criteria, metrics for assessing each race, and the best available sources of data on each topic. Each report offered a summary of the evidence about what has happened over the first two decades of the twenty-first century and a candid judgment about where each nation stood in 2020.

The bottom line in each of the five reports was identical: a nation that at the beginning of the century could not be seen in our rearview mirror is now running right beside us or, in some cases, ahead. We concluded that the Office of National Intelligence’s persistence in grudgingly naming China just an “increasingly near-peer competitor” is a nostalgic mistake. Ask the athletes competing in the Olympics. China must be recognized as a full-spectrum peer competitor.

Figure 2: Share of Global GDP (PPP)

Source: IMF, World Economic Outlook 2024

As Figure 2 shows, by the yardstick that both the CIA and the IMF have adopted as the single best measure of national economies, China now has the largest economy in the world. According to the CIA, China’s GDP in purchasing power parity terms at the end of 2023 was $31.2 trillion, compared to the United States’ $24.6 trillion. Many Americans find this so antithetical to what they know in their bones that they simply refuse to believe it. They note that by the traditional yardstick that measures economies by market exchange rates, the United States remains number one. They remind us that China is home to four times as many citizens as the United States and so remains far behind in per capita GDP. But as Figures 3, 4, and 5 show, in the process of overtaking the United States to become the largest economy, China has displaced its competitor from its accustomed position as the top trading nation, the manufacturing workshop of the world, and exporter of high-tech products.

Figure 3: Share of Global Trade

Source: World Bank Data

Figure 4: Share of Global Manufacturing

Source: OECD Trade in Value Added (TiVa) Database

Figure 5: Share of Global High-Tech Exports

Source: World Bank Data

The technology race is more difficult to summarize. Certainly, the United States remains at the forefront of advancing technology, which is likely to matter most in the next decade as American AI companies push the frontier. Current American constraints on exports of advanced semiconductors and the equipment with which to manufacture advanced semiconductors handicaps China. But in next-generation green technologies from solar and wind to EVs, China has established such a dominant lead that for at least the decade ahead, the West’s green future will be red.

In the military rivalry, the era of U.S. primacy is over. Yes, Washington’s position as a global military superpower remains unique—with a network of treaty allies and bases on almost every continent. Yet China is now a serious military rival. Chinese anti-access/area denial systems have changed the game in its geographical periphery, which includes Taiwan and the South and East China Seas. In the most realistic war games the Pentagon has designed to simulate war over Taiwan, the score is eighteen to zero. And the eighteen is not Team USA. In the words of former Joint Chiefs of Staff Chairman General Mark Milley, when “all the cards are put on the table,” the United States no longer bests China in defense spending.

In 1996, China’s reported defense budget was one-thirtieth the size of America’s. By 2020, when measured in PPP, China’s spending was over one-half of U.S. spending and on a path to parity. Furthermore, China’s military can do more with less. The average PLA active-duty soldier costs China one-quarter of an American soldier’s annual cost. And while China’s nuclear arsenal is much smaller than the United States’, its nuclear forces are sufficiently capable to ensure mutually assured destruction (MAD).

Figure 6: Defense Spending (PPP)

Source: Belfer Center, The Great Military Rivalry: China vs the U.S.

Therefore what? Five takeaways deserve further reflection. 

First, as the traditional Olympic banner declares: “faster, higher, stronger.” Competition spurs rivals to run faster, jump higher, and demonstrate greater strength in throwing a discus or shot put than individuals would do running alone. As Adam Smith taught us, competition among nations that concentrate on their competitive advantages and trade creates a bigger pie of which each can have a bigger piece. In one of Xi Jinping’s favorite phrases, it is thus a “win-win.”

Second, as Olympiads know, in each event, only one person can win gold. Most never make it into the winner’s circle. Thus, while on the one hand, any athlete who qualifies to participate is an Olympian and thus a winner, on the other hand, most of these winners will be losers in the race for a medal. In game theory, a classic case of win-win is the stag hunt in which only by cooperating can two individuals capture a stag. But after they do, they must then decide how to divide the stage where a larger portion for one means less for the other in a game that is zero-sum win-lose. Similarly, when producing items for trading, like EVs or semiconductors, if a nation is able to establish a dominant position, it has power that it can exercise to influence other nations. 

Third, contrary to the standard talking points of Chinese diplomats who often reject the U.S. insistence on recognizing that China and the United States are competitors, in the athletic arenas, China is an enthusiastic and determined competitor. While Yang Jiechi (former foreign minister) cautioned the United States and China “should engage in win-win cooperation rather than hostile competition,” former (and ousted) Foreign Minister Qin Gang warned that “so-called ‘competition’ by the U.S. is all-round containment and suppression.” The current ambassador, Xie Feng, has also stressed that “competition between countries should be like competing with each other for excellence in a racing field, not beating one another in a wrestling ring.” But Chinese president Xi Jinping is himself a boxer. In boxing, as Xi says, “endurance, strength, and control in the ring” are most important. In the boxing arena, China has won one gold medal and one silver medal so far compared to America’s single bronze. In wrestling, the United States has won two golds to China’s one silver and three bronze. 

Fourth, while the stakes in the Olympics are essentially a matter of national pride, in the core geopolitical competitions, GDP, technological leadership, military power, and diplomatic prowess impact national security and even survival. Americans—including this author—believe that the international security order the United States constructed in the aftermath of World War II and has been the guardian of in the decades since then has been a remarkable era in human history. This unprecedented “long peace” has provided stability that has enabled not only Americans but most of the other eight billion souls with whom we share this small planet to enjoy greater increases in income, health, and well-being than in any other era of recorded history. China’s meteoric rise is challenging the United States’ established position at the top of the global pecking order in a quintessential Thucydidean rivalry. Most Thucydidean rivalries end in war.

Fifth, as the new Olympic banner adopted in 2021 in Tokyo declares: “faster, higher, stronger—together.” Analogously, while the United States and China are destined to be the fiercest rivals of all time, neither can escape the fact that their rivalry is shaped by existential challenges both face—and neither can defeat without the cooperation of the other. Today, both nations have nuclear arsenals that, if used in all-out war, could erase each other from the map. Both live on a small planet inside an enclosed biosphere, into which both have been emitting greenhouse gases at rates that could render it uninhabitable for both. 

The two economies are so entangled that the 2008 Great Recession would have become a global depression had Washington and Beijing not both responded with a coordinated stimulus. And while another Great Depression would not strictly be “existential” for either, when we recall that the depression in the 1930s fueled the rise of Fascism, Nazism, and Communism leading to the Second World War, neither want to see something like that again. Moreover, beyond these three, limiting dangers posed by transnational threats from pandemics and global terrorism to the spread of nuclear weapons requires coordination and cooperation.

Can nations be intense rivals and serious partners at the same time? Are these not competing and even contradictory imperatives? In an either-or world in which everything is black or white, friend or foe, it would seem that one would have to trump the other. However, in the business world, leaders often engage in what is called “co-optition.” For example, Apple and Samsung are ruthless competitors in selling high-end smartphones. But who is a major supplier of components for Apple’s smartphones? Samsung. When Apple’s CEO Tim Cook is asked how one of his major competitors can also be his major supplier of components, he says, “Life is complicated.”

Can American and Chinese statesmen find their way to a relationship that is simultaneously a rivalry and a partnership? The Biden administration believes that its strategy of “competitive coexistence” is a big step in that direction. The strategic concept or framework that Biden and Xi agreed to embrace at last November’s summit combines three Cs: competition, communication, and cooperation. While doing everything within their power to out-compete the other, they are also maintaining open channels for regular, candid, private communication about the most delicate and dangerous issues. These include not only conversations between the two presidents and their trusted national security advisers but also analogs in meetings between cabinet officers and military leaders. They are also cooperating on issues such as Taiwan, climate, fentanyl, trade, and others in ways that serve each nation’s interests.

F. Scott Fitzgerald wrote, “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” We must hope that institutions as complex as governments can meet this test—and do so for decades ahead.

Dr. Graham Allison is the Douglas Dillon Professor of Government at Harvard University, where he has taught for five decades. Allison is a leading analyst of national security with special interests in nuclear weapons, Russia, China, and decision-making. Allison was the “Founding Dean” of Harvard’s John F. Kennedy School of Government and, until 2017, served as Director of its Belfer Center for Science and International Affairs, which is ranked the “#1 University Affiliated Think Tank” in the world.

Image: ProPhoto1234 / Shutterstock.com.