THE DRAGON OR THE EAGLE: The Choice between China and the United States among the Asia Pacific Countries

The shift of the US policy from engaging China to containing China can be traced back to the Obama administration and his pivot to Asia strategy in 2009. It coincided with the Chinese economy surpassing 10% of global output in real terms, and becoming the second largest economy a few years earlier. In 2020, China even surpassed the economic size of the EU at 18% of global output. The containment policy went into high gear during Trump’s administration with the trade wars of 2018. The tension deepened further with restrictions imposed on Chinese companies operating in the US, particularly those in the technology sector (eg. Huawei and ZTE), which led to discussions on the decoupling of the China-US economic relationship. COVID-19 added further cracks to the relationship. While the Trump administration took on China on its own, his successor chose to rally other countries to join the crusade against China. The re-emergence of the Quad (US, Australia, India and Japan) and the establishment of AUKUS (Australia, UK and US) are good examples of such alliances. China’s increasing influence around the world, on the one hand, can be traced back to President Xi’s flagship project, the Belt Road Initiative, and on the other, China’s ambition to dominate in several key industries as outlined in the Made in China 2025 document.