China’s remarkable rise in economic, technological, and military prowess is radically reshaping the world order during an uncertain age, but will the future bring Cold War-style rivalry, collaboration, or both?
Featuring Graham Allison
January 21, 2022
44 minutes and 17 seconds
It takes a lot to impress Professor Graham Allison when it comes to geopolitics. He is, after all, the Cold Warrior’s Cold Warrior—as one of America’s most influential defense policy analysts and advisors, he was twice awarded the Defense Department’s highest civilian honor for his work on nuclear disarmament with Russia. He’s a former assistant secretary of defense, former director of the Council on Foreign Relations, a founding member of the Trilateral Commission, and a renowned political scientist who has served as dean of the Kennedy School and head of the school’s Belfer Center for Science and International Affairs. Yet even Allison says he marvels at the rapid transformation of China, the world's rising economic, technological, and military superpower, and he says it’s well past time for the United States and the rest of the world to hear some hard truths about China’s power and potential dominance of world affairs during the 21st century.
To explain how China has not only caught up with, but in numerous cases surpassed, the United States, Allison and a group of colleagues are writing a series of five research papers on the key areas of economics, technological advancement, military power, diplomatic influence, and ideology. The third paper, on China’s extraordinary rise as an economic superpower, states that while some may be tempted to still see China as a developing country, the truth is that it has been adding the equivalent of the entire economy of India to its GDP every four years and that the number of people in the Chinese middle class—some 400 million—now far outnumber the entire population of the United States.
Meanwhile, China is either catching up or leading in foundational technologies of the 21st century like AI, quantum computing, and green tech, while recent war games predict that China’s modernized, expanded military would likely win a military conflict over Taiwan. Graham Allison talks about China’s rise and what could be the next great superpower rivalry—but also about the possibilities for a new paradigm for the U.S.-China relationship that goes beyond Cold War thinking.
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. As assistant secretary of defense in the first Clinton administration, Allison received the Defense Department's highest civilian award, the Defense Medal for Distinguished Public Service, for "reshaping relations with Russia, Ukraine, Belarus, and Kazakhstan to reduce the former Soviet nuclear arsenal." This resulted in the safe return of more than 12,000 tactical nuclear weapons from the former Soviet republics and the complete elimination of more than 4,000 strategic nuclear warheads previously targeted at the United States and left in Ukraine, Kazakhstan, and Belarus when the Soviet Union disappeared.
He is the author of numerous books, including: “Destined for War: Can America and China Escape Thucydides’s Trap?” (2017), “Lee Kuan Yew: The Grand Master’s Insights on China, the United States and the World” (2013), “Nuclear Terrorism: The Ultimate Preventable Catastrophe” (2004) and “Essence of Decision: Explaining the Cuban Missile Crisis (1971).
As "founding dean" of the modern Kennedy School, under his leadership, from 1977 to 1989, a small, undefined program grew twenty-fold to become a major professional school of public policy and government. Allison was a founding member of the Trilateral Commission, a Director of the Council on Foreign Relations. He was born and raised in Charlotte, North Carolina and was educated at Davidson College; Harvard College (B.A., magna cum laude, in History); Oxford University (B.A. and M.A., First Class Honors in Philosophy, Politics, and Economics); and Harvard University (Ph.D. in Political Science).
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Intro (Graham Allison): The Chinese vision is, "We are inexorably rising. You are irreversibly declining." That's it; that's the grand narrative. So if that's true, then on the current trajectory, by 2030 China will have a GDP twice the size of ours, and by 2040, three times. Now, if that happens, the whole picture about the U.S. and China and Taiwan may look very different.
Intro: (Ralph Ranalli): Welcome to the Harvard Kennedy School PolicyCast. I’m your host, Ralph Ranalli. It takes a lot to impress Professor Graham Allison when it comes to geopolitics. He is, after all, the Cold Warrior’s Cold Warrior—as one of America’s most influential defense policy analysts and advisors, he was twice awarded the Defense Department’s highest civilian honor for his work on nuclear disarmament with Russia. He’s a former assistant secretary of defense, former director of the Council on Foreign Relations, a founding member of the Trilateral Commission, and a renowned political scientist who has served as dean of the Kennedy School and head of the school’s Belfer Center for Science and International Affairs. Yet even Allison says he marvels at the rapid transformation of China, the world's rising economic, technological, and military superpower, and he says it’s well past time for the United States and the rest of the world to hear some hard truths about China’s power and potential dominance of world affairs going into the rest of the 21st century. To explain how China has not only caught up with, but in numerous cases surpassed, the United States, Allison and a group of colleagues are writing a series of five research papers on the key areas of economics, technological advancement, military power, diplomatic influence, and ideology. The third paper, on China’s extraordinary rise as an economic superpower, states that while some may be tempted to still see China as a developing country, the truth is that it has been adding the equivalent of the entire economy of India to its GDP every four years and that the number of people in the Chinese middle class—some 400 million—now far outnumber the entire population of the United States. Meanwhile, China is either catching up or leading in foundational technologies of the 21st century like AI, quantum computing, and green tech, while recent war games predict that China’s modernized, expanded military would likely win a military conflict over Taiwan. Graham Allison is here to talk about China’s rise and what could be the next great superpower rivalry—but also about the possibilities for a new paradigm for the U.S.-China relationship that goes beyond Cold War thinking.
Ralph Ranalli: Hello Graham, welcome. It's great to have you.
Graham Allison: Thank you for having me.
Ralph Ranalli: What is happening with China right now is extraordinary in so many ways, but it would take literally all the time we have just to list all the examples you give in all the areas, economics, technology, military power, diplomacy, where China has not only made great advancements, but in some cases has reached parity with or even surpassed the United States. So I thought we could focus on some of the themes and then talk about some examples as we go, if that's okay.
Graham Allison: Good.
Ralph Ranalli: You've co-authored this series of five papers about China, two of which—on military power and on technology development—have already been published. The third one is on economics and it's due out very soon, and it's the arena people are probably most familiar with. So I was hoping we could start there. So, for the first time in 150 years the U.S. faces an economic rival that is as large and by some measures larger than itself. Now, of course we've seen this trend developing for a long time. Why do you believe that examining it is particularly important right now in this context?
Graham Allison: Well, it could be a long answer, but let me just do two or three points, and you pick up at any point.
Ralph Ranalli: Okay.
Graham Allison: So the biggest international story in the world today, and for the foreseeable future, is China. Never before has a nation risen so far, so fast, on so many different dimensions as this one. And the most significant challenge to the U.S. today internationally, President Biden would say, President Trump would say, and President Obama would say, and I think anybody that knows anything about it would say, is the rise of China and its impact on the U.S. and the international order, of which the U.S. has been the principal architect and guardian. So that's point one.
So point two. This rise—I think anybody that's not aware that China has been rising has been sleeping. But if you look at the evidence about what's actually happened just in the 21st century, just in the last two decades, I believe no one can look at that evidence and not be surprised or shocked. I don't know, you looked at the report, you say, "Yeah, I know China's big. I know they have a lot of people. I know that a lot of the stuff I buy at Walmart or at Home Depot comes from China." But when I look and say, I do this as a quiz in my course, I say, "Who is the manufacturing workshop of the world? Who is the number one trading partner of everybody? Who provides the most critical links in the supply chain for everybody? Who ..." You're going down this list, who, who, who. And people say, "Wait a minute, wait a minute. The answer to all of these cannot be China," to which the answer is, yes. The answer to these is China. And people don't believe it. So I say, "Just go to the CIA fact book online, just go look at it right now. And you look and see, who do they say by what they think regard as the single best metric is the largest economy in the world?" Well, we know that it's the U.S., but CIA says it's China. IMF says it's China because they have developed what they think is a better yardstick for comparing national economy. So the bottom line is, this is a situation, just as you said, where the U.S. has been accustomed to looking at a world in which, for initially after World War II we had half of the world's GDP. Into the Cold War we had 1/4th of the world's GDP. Well, excuse me, today the number is closer to 1/6th or 1/7th, and it's shrinking. So your ability to impact the world, if you basically own half of the world's GDP or 1/4th, is significantly different than if you have a 1/6th or 1/7th. And we're seeing this play out now both on the China front and on the Russia front.
Ralph Ranalli: I was gobsmacked by one of the charts in the economics paper, which compared China from 1980 to today, and it said that China's GDP had risen from 191 billion to 14.7 trillion. Per capita GDP rose from $195 to $10,500. The urban population has grown from 19.4% of China's population to 61.4%, and the average life expectancy had risen by 10 years. In 40 years that is absolutely transformational, extraordinary in what has to be a historically unprecedented way. And then it follows up by saying that China has effectively created a new world economic order with itsef rather than the U.S. at the center. And you say that this has implications for international relations and geoeconomics. Can you talk a bit about those implications?
Graham Allison: Well, thank you. I think you're a good reader, and you've got the essence of it. So I think the charts that the report includes, particularly, it looked like the planets revolving around the sun. Most people can't believe that, "Wait a minute, we are the manufacturer of the world," to which the answer is, no, China manufactures more than twice the amount of stuff that we do. So we are the trading partner? No, excuse me. China. So China has actually defined a new world economic order, and one that's shockingly different because we're accustomed to being at the center of everything and to being the predominant power in every domain. So the consequence of this is that when China now says to Volkswagen or Intel or Tesla, "You cannot say 'Xinjiang' in your letter."
Ralph Ranalli: Yes, China has been cracking down on references to Xinjiang, which is the province where the international community has accused it of human rights abuses against the predominantly Muslim Uyghur minority.
Graham Allison: Intel last week said, a note back saying, "We apologize, and we will not put this in the letter again." When China, as the number one trading partner with South Korea, when South Korea was deploying missile defenses, said to them, "No more, no," and actually destroyed their major department store, which was one of the big suppliers in China, the South Korean government said, "Well, we have three no's now. Here they are. No, no, and no." So when China punished Norway for the award of the Nobel Prize to a Chinese writer or dissident by cutting off Chinese purchases of Norwegian salmon, among other things, the Norwegians said, "We'll never bend to you." And now you watch their behavior, they've fallen very much into line. So basically if you are my principal economic relationship, and especially if you are a major supplier of things that I require, you have a lot of leverage. Now, a very interesting case is the one of our former colleague and my good friend, Kevin Rudd, who was the Australian prime minister and was here at the Kennedy School for a couple years at the Belfer Center. Now he's at the Asia Center. We were chatting the other night. So I said, "Kevin, what about Australia?" He said, "Well, you know, Australians are ornery people. So we're one of the few countries that eventually say, 'Screw you.'" So they're trying in the current situation to say some version of, "Screw you" as the Chinese have been squeezing them. On the other hand, China is their number one market, so they're going to do some adaptation, I believe. I think basically if you have economic power you have leverage, especially if you're prepared to exercise it. And the Chinese have shown themselves to be artful practitioners of what's called sometimes geoeconomics.
Ralph Ranalli: Right. The way I was thinking of it was as the hardball use of soft power, right?
Graham Allison: I think that's a very good line, yes.
Ralph Ranalli: There was that great story about the Chinese fishing captain who was detained by Japan after the boat collided with two Japanese vessels. So China just cut off rare earth metal supply. And it could do it because it controls 97% of the world's supply of rare earth metals, right?
Graham Allison: Yeah, absolutely. One of the things that, we wrote another piece just, oh, I think right before Christmas, on whatever, America's road to a green future goes through red. So basically Biden and Congress have made a big deal of the shift to electronic vehicles for the purpose of reducing greenhouse gas emissions from burning hydrocarbons in automobiles. This is a big deal. The answer, though, is where do the battery ... Basically electronic vehicles are a wrapper around a battery. And the battery is a lithium iodide battery, of which about 80% of all the things that have to do with those batteries come from China. So if you look at Tesla today, they're the biggest producer, they produce more than half of their electronic vehicles in China and sell more than half of them in China. But they do that because the essence of it is this battery, and the batteries come from China.
Ralph Ranalli: Since we are so dependent on China’s good graces to do the things we really need to do in terms of addressing the climate crisis, and also the need to advance technologically and to maintain our competitiveness, why haven't we done a better job with making sure that we have adequate market share in these strategic economic areas? Take rare earth metals, for example. Why didn’t we recognize that strategic vulnerability and do something to address it before?
Graham Allison: Well, again, a great question and complicated. So there, let me oversimplify first and then I'll try to be more detailed. But there are two different theories here. One you can see operating in the commercial, business, financial world, which is, the U.S. and China are so inextricably connected and the benefits to each of them are so great that more is better, and this is life, and get used to it. So if you ask Elon Musk, or interestingly Tim Cook, here you have the most valuable company in the world by market share, Apple, and you have the richest guy and the most successful entrepreneur. They both say, "Wait a minute, our road to riches has gone through China." So Apple assembles more than half of all of the iPhones that it sells in China. And have they stepped back from that given even the increasing hostility? No, they haven't. Has Elon Musk stepped back at all? No, he's digging in deeper. If you look at BlackRock, our biggest financial investor, they've doubled down on their bet on China. So theory one says the economic interactions are so intense that we're going to have to find a way to live with each other. And that's the problem for you guys in the policy world, but don't screw it up. Okay?
And there's the other view, which says, "Yes, I know that by buying rare earths from China, and depending on China your company is more successful. But it leaves me as a country vulnerable if China should, under some circumstances, decide to treat us the way it treated the Japanese," in the case that you gave. So for those of us that do geopolitics, the dependence, the fact that we're interdependent is interesting, but the fact that I'm more dependent on you than you are on me. So I always compare this to, there's an interdependence between the drug dealer and the addict, but the consequences for the two are not the same if the transaction fails to occur. So I think the ways in which this creates vulnerabilities geopolitically certainly are "not my problem" if I'm running a business. In general that's the way that it's thought of. Not that the people are disloyal, it's just that, "That's not my problem. That's your problem in Washington, you guys deal with that."
Ralph Ranalli: Right.
Graham Allison: And in the Washington case, then the question is, if it turns out that China actually has the mines and is invested in the production facilities for lithium, and if it's actually succeeded in buying up a dominant position in lithium mines in other countries, well, we would hope our companies had done that. But if they didn't, the question would be whether at a federal level we would spend public money in trying to do that. And China has shown, I think, the combination of three or four big advantages they have. First, they've created a manufacturing ecosystem that's unparalleled and that allows them to build stuff about 30% or 40% cheaper than it does for us. We pay people more. We have OSHA and safety concerns and others. So one is that production. Secondly, we are much more sensitive about the environmental consequences of the activity. So when you're mining lithium or producing lithium iodide batteries, you have a lot of environmental negative impacts that we are trying to restrain, they've been less restrained about. They notice it locally, but they worry about global warming less than we do. Then thirdly, we essentially leave this to the market, and lo and behold, that works most of the time. So why do we have great advanced information technology companies? Because Google and Microsoft and Facebook all go and do their thing, and where they compete successfully they may be the best companies in the world. On the other hand, it's not required for them to think about the security or geopolitical consequences of either their production or their investment. Now, I think the reality is that China, both doing this from a more strategic point of view and then taking advantage of its natural advantages, has managed successfully to increase our dependence and everybody else's upon them and to try to limit their dependence on us.
Ralph Ranalli: In the economics paper there was this interesting concept that also seems to have one foot in the military context, which is M-A-E-D. I don’t know how you’d pronounce that … MAED? It stands for mutually assured economic disruption, which seems to be the economic equivalent of the strategic nuclear concept of MAD, mutually assured destruction. Can you talk about MAED and its implications a bit?
Graham Allison: Well, it probably is useful to remind people what MAD is too. You and I are old enough to remember, but most not.
Ralph Ranalli: Right.
Graham Allison: In the nuclear realm, in the Cold War, which I'm an old Cold Warrior, when the Soviet Union acquired a nuclear arsenal so robust that if we were to attack them, they could still respond against us and destroy us, that created a condition called MAD, mutual assured destruction. That meant that if you attacked me, you were committing suicide. Now, that ended up having a great crystal ball effect to caution both parties. But at the cost and risk that if it went badly, we literally erase each other from the map. That situation still is the reality today in relations between U.S. and Russia and U.S. and China, the only two countries for whom that's the case. But that's the nuclear realm. Now, that's the reason why Ronald Reagan said and taught over and over, "A nuclear war cannot be won and must therefore never be fought." So people would say, "Well, you are afraid of a war with the Soviet Union, even a nuclear war?" He'd say, "Let me say it again. I'm not afraid of anything, I'm just telling the fact. A nuclear war cannot be won." Because if at the end of the war your country has been abolished, destroyed, that's not victory. That's failure. So that's nuclear MAD.
In the economic realm, the degree of interdependence between the U.S. and China, the U.S. mostly in the area of goods and China in the arena of finance, in which the US remains the dominant power, is such that if you should have a total breakdown of relations between the U.S. and China, well, Chinese factories would be producing equipment or more stuff that they wouldn't have any place to send to. And Walmarts would be empty. Though now Chinese tease about this and say, "We can probably suffer better than you can, because how many weeks will it be of empty Walmarts and Targets and Home Depots before Americans revolt?" The other question is: How many weeks or months of the absence of deliveries of oil, for example, which come across the sea, or even opportunities to sell your products, which go in cargo containers across the sea? Now, I think the degree of interdependence between the U.S. and China is quite severe. And if there should be a total breakdown in economic relations, you would have a huge negative impact on both societies, we probably would have a global recession. Now, again, we've lived through recessions before, maybe even depressions, but those were not good times.
Ralph Ranalli: The flash point that everybody points to of a potential military conflict between the United States and China obviously is Taiwan. In the context of mutually assured economic disruption, though, wouldn't a Chinese attack on Taiwan just cost tens of thousands of lives, turn China into an international pariah, and at a minimum trigger the economic sanctions that would activate that mutually assured economic disruption scenario and endanger much of China's economic gains? What is that calculus there, do you think, for China? Even with Chinese President Xi Jinping's military buildup and his posturing or belligerent or whatever you would call it ...
Graham Allison: Assertiveness.
Ralph Ranalli: Assertiveness, thank you. Which has a lot to do with his internal political audience. Tony Saich and I had a wonderful conversation about this because of his book, "100 Years of the Chinese Communist Party."
Graham Allison: Yes, it's a good book, a really good book.
Ralph Ranalli: It is a very good book. What is the calculus there for Xi and for China on actually invading Taiwan?
Graham Allison: And again, another great question. So I think it's worth trying to be as objective as we can about the strengths and weaknesses or the balance sheet for Xi, but also the similar strengths and weaknesses or vulnerabilities for us. And it really is mutual assured disruption. So from the point of view of Xi Jinping, I think the prospect that if he were to use military force to reintegrate Taiwan, the U.S. response would not be military, I believe, since I think if we were to respond militarily we would lose. So we can't quite say that out loud, but I wrote about this, because a number of the military and defense officials who I've been dealing with have been candid about this. And therefore, since Chinese are aware of this, so should American policy makers or the rest of the public.
Ralph Ranalli: Didn't they run some war games?
Graham Allison: Yeah, they did. And the war games turned out to be negative for us. So that's the reason why I think our military response would be not very realistic. But on the other hand, the idea that China would have shown itself to be, in effect, a pariah ... Again, this depends a little bit on the circumstances and the provocation, and that the U.S. might be able to organize economic punishment for China. Xi Jinping already has enough Uighurs who are disgruntled in Xinjiang, which gives him a headache. Most of the people in Taiwan are not enthusiastic about being ruled by China. So, there's a lot of reasons why this is not a good idea from his point of view. And I think that being the case, my assessment is that absent a Taiwanese provocation that could not be tolerated—so if Taiwan were to declare that it was going to become independent and was going to seek recognition at the U.N. as an independent country, something that was really across their red lines—I would think he would be required to act. But absent that, I think he will be cautious. And I think from the American point of view, to think about our vulnerabilities and assets, so if after Taiwan, let's imagine Taiwan had taken at least some modest provocation, and in response to it Xi Jinping had moved militarily to reintegrate Taiwan and suppressed it pretty quickly, let's say in a week. And now we go to the Germans and we say, "We're organizing a general boycott of trade with China." I think the chancellor would say, "Well, excuse me, our major industry is automobiles and our biggest market for automobiles is China. So we'll go along with something, but maybe not as much as you think." So I think the prospects that we could build, in Cold War terms, a new economic iron curtain, in which we would have most of the other big economies on our side, sounds good, but it's pretty hard for me to imagine actually happening. And I think Xi Jinping is aware of that. So that's why this makes this situation dicier.
Now, before one begins to despair, what I always say about Taiwan is, Taiwan is an intractable problem, intractable. But intractable does not mean unmanageable. So fascinating, I was just doing something on this with Henry Kissinger earlier this week. So it was 50 years ago next month, in February, that Nixon did his opening to China.
Ralph Ranalli: Wow.
Graham Allison: Kissinger had gone the year before to prepare the way. So 50 years ago, think of it. And at that point Taiwan was even more intractable as an issue. So the fact that you had an intractable problem did not mean that it was impossible, by some combination of strategic imagination of Kissinger and Chou En‐lai, and ultimately Nixon and Mao, to figure out something that we call strategic ambiguity as a wrapper around what were irresolvably different views and visions about what was the situation. So from China's point of view, Taiwan is unalterably part of China, a renegade province, soon to be brought into the fold. And from the American point of view, Taiwan is—while there's only one China and Taiwan and Beijing are both part of the single China—nonetheless, any use of military force to resolve these differences is unacceptable. And from a Taiwanese perspective, you have yet a third point of view. So is it possible to have a diplomatic wrapper in which parties can live with for a time, not forever, and manage irreconcilable differences in views and visions? And then in some sense let history decide. Well, 50 years, this is the best 50 years in terms of the increasing well being of human beings in both sides of the straits, both in China and in Taiwan, that they've seen in their 4,000-year history. So I'm optimistic that if we had any thing like the strategic imagination exercised then, this basic idea could be renovated. It needs to be updated somewhat, but could it give us some more decades of letting history decide?
And then, as I'd say to the Chinese, and I would say this to Americans as well, the Chinese vision is, "We are inexorably rising. You are irreversibly declining." That's it, that's the grand narrative. So if that's true, then on the current trajectory, by 2030 China will have a GDP twice the size of ours, and by 2040, three times. Now, if that happens, the whole picture about U.S. and China and Taiwan may look very different. There's a different view, which is, we believe our democracy and market economy is going to perform more successfully than theirs, because we don't believe a party-led autocracy can govern a society so successfully for so long. Well, if it turns out we're correct and their system falters and fails, then Taiwan is not going to be their biggest problem. They have a lot of problems. So I would say let history decide, yeah.
Ralph Ranalli: Right. So you have this equilibrium with Taiwan. And I think part of this exercise is looking for things that might unbalance this equilibrium that's been in place for, like you said, since Nixon and even further. And one of the things I was interested in reading in the technological paper was this, China's advancement in quantum communications, which has this military application of potentially having their governmental and military communications "go black," which means it's unbreakable, unlistenable by U.S. spy agencies. Could something like that upset this equilibrium? And since China is such a serious competitor in all these foundational 21st-century technologies, AI, 5G, quantum computing, semiconductors, biotech, and we already talked about green tech, what do you think is the potential that China's rise in this technological area, where again, it's reaching parity and in some cases surpassing the United States, is really twisting the dynamic in unexpected ways?
Graham Allison: Again, a great question. So probably the chapter of this study that's had the most controversy or discussion is the technology rivalry, since most people simply can't believe how rapidly China has closed the gap in so many arenas, even to the point of being ahead of us in certain arenas. Let's just take 5G as an example. So you can't watch the football games without being inundated by claims from AT&T and T-Mobile that we have the best, fastest, most reliable, and whatever. The answer is, America, and I have a nice Apple 5G phone, it's 5G enabled. But I would not be able to get 5G services unless I was taking it with me to the Beijing Olympics. So basically American 5G in most parts of the U.S., like Boston or New York or LA, is as slow as 4G. Whereas in China you get five times that speed in Beijing or Shanghai. They have 160 million people, about half the size of the U.S., living in a 5G world now. In South Korea you have that 5G world, but not in U.S. So they are just miles ahead. Now, what's going to be the consequence of that? Nobody knows, but nobody could quite figure out what was going to be the consequence of the shift from 3G to 4G. 3G was very slow. 4G is the world that we've lived in. In the world of 4G came the whole shift to what we now think of as natural, living with a mobile device that's part of the web, that allows us to do, whether it's Uber or Facebook or Google or whatever we're doing. So basically the transformational possibilities in the move to 5G as they will impact virtual reality, meta, and then the applications, is a dramatic example. In that one China is already decisively ahead, and this is a serious follow-up.
If we take quantum or AI, two other examples, both of which are dealt with in the paper, in AI, I would say that's the technology which technologists believe is most likely to have transformational impacts on the U.S. economy and security in the next 20 years. There, for applications of AI, China is ahead of the U.S. in the area of facial recognition. So there's a contest held every other year for … everybody comes and shows what they can do. They win. Voice recognition, even in English, they win. Comprehensive surveillance, they win. Fintech, they win. There are other areas where the U.S. is ahead. Most of the superstars. Fortunately Google and Microsoft bought up a bunch of the most talented people. Enterprise software, U.S. is ahead. But it's a genuine race. In the quantum space or quantum arena, again, two or three excellent American companies are out there trying to develop this technology, including Google and Microsoft, but the Chinese have made huge strides, as we describe in this report. So what could this mean? Well, I would say in each one of these arenas, as we've seen historically, you can have technological, in effect, arms races in which parties get ahead of each other. It's pretty hard to get a decisive advantage. And also, the technologies proliferate quite quickly. So it's pretty hard to have a permanent advantage. You have to just keep, it's not like a race in which you get to the finish line. It's one of these races without end, where you keep running relative to the others. Historically where you've had qualitative arms races, actually those have been less likely to lead to conflict, because there's the uncertainties, than when you've had simply fixed technology and quantitative. That was one of Sam Huntington's findings. So I would say that in the quantum space, if they should manage successfully ahead of us to be able to have essentially secure communication that went dark for us, the consequences for the intelligence community as well as for potential military conflicts would be very severe. And we therefore are working very hard on the other side of that. But similarly in the AI space, the piece that Eric Schmidt and I did on that earlier was last year, that's part of the Belfer Center's reports. You look at that space, the potential applications of AI in the military and security arena are huge, and the consequences could be huge.
Ralph Ranalli: So we talked about Tony Saich, and one of the things he said to me about the Communist Party in China and its longevity was that it was due largely to its pragmatism and its flexibility, which is supposed to be very uncharacteristic of an authoritarian Communist regime, right?
Graham Allison: Right.
Ralph Ranalli: And it gave me some hope, I guess, that there might be a chance at a new relationship out there that might be based on collaboration as much as it is on the current paradigm, which is mostly competitive, because of pressing imperatives like the need to address climate change. What do you think of that ideological space? I know that you have another paper forthcoming on ideology. Do you see any hope in that ideological space for a changed relationship or some sort of less conflict based relationship going forward?
Graham Allison: Again, good for you for putting things together with it, because I think Tony's book is quite interesting and surprising. For most readers, the idea that a society that's Communist by declaration and that has a banner called the Communist Party, we think of as being ideologically rigid. But I would say he correctly describes it as, this is socialism with Chinese characteristics, and the Chinese characteristics are fundamentally pragmatism. So as Mao or Deng Xiaoping said, how do you know which cat is the Communist cat? It's the cat that catches the mouse. And the idea, especially for Americans, that there might be people that are more pragmatic than we are, is offensive. But I deal with this in my "Destined for War" book in a chapter called The Clash of Cultures. Look at the differences we pride ourselves on; pragmatism actually is a American philosophy. William James was here at Harvard developing this. But if you ask whether American current policymaking and the American elite's mind is more rigid or more flexible and pragmatic than the Chinese, well, that would be a good exercise in itself.
Your instinct, though, seems right. Let's just imagine—I do this in my class—I say we imagine a Martian analyst. So she looks at the world very objectively. She has no dog in the fight. She's just analyzing what's going on. And then in my class I have her come visit from time to time and give us a description of what she thinks is going on. Okay? So I think she would look at this situation and she'd say, "Uh-huh, you've got these two big countries that are both great countries for sure. But each of them have a lot of problems inside their own borders, huge problems. So if they were sensible, they would notice that most of their problems are inside their border, not outside their border. And they might even find a way to agree that they'll concentrate on those for a while, see how that works out and then get back to their international rivalry." So that would be a big idea. Now, actually Pericles had an idea like that, if you go back to Thucydides and all that. So the Athenians negotiated with the Spartans a 30-year peace. Ultimately it broke down after about 20 years. But with the notion that we have enough problems of our own, you have enough problems. Why don't we freeze the competition for a while and work on our own problems? So that would be one big idea.
A second big idea I think she would tell us is, "You each are facing challenges that neither of you can meet by itself, in which either you will find a way to jointly address and resolve the challenge or you will jointly fail." And the dramatic example that you mentioned is climate. So if we recognize that we live in a contained biosphere and that your emissions of greenhouse gasses have the same impact on the biosphere as mine do, and that each of us is on a trajectory in which if we simply keep doing what we're doing, we can make a biosphere in which neither of us can live, then rationality would say we have a pretty powerful incentive to find a way to collaborate or cooperate or coordinate. But in any case, to mutually constrain the greenhouse gas emissions at least to the level in which I can survive. And I can't survive if you can't survive. So since survival is a powerful motivator historically for individuals and for countries, that's a pretty powerful one. I would say similarly in avoiding war, that could become a nuclear war. So back to MAD. A nuclear war cannot be won. So if we end up for whatever reason having a war with China, a full scale war, and if at the end of that the country has been erased from the map, nobody will think that was victory. That was ultimate defeat. So that's a second arena. And then we talked about the extent of which the economic independence has become so intertwined and the benefits of it, so obvious that it’s very hard to explain for any political leader how he impoverished his own country by decoupling from global integration.
So there's three to start with. Well, that might be enough, I think, that this Martian analyst would say to the parties: "You folks should be smart enough to find a way to stabilize your relationship while you continue to compete. And then if you are able to show that a party-led autocracy is better able to deal with the complex challenges of the 21st century than a liberty-based democracy, that'll show itself in the performance over time." So I would say there's quite a lot of stuff there that the Martian analyst would say: "You folks have powerful reasons for finding a way to both coexist and compete. And we're not diminishing the competition, because you have different values and different interests and different conceptions of how governance works, and proof is in the pudding. Let's see what you cook up here.”
Ralph Ranalli: All right. Well, let's hope for some good old Martian pragmatic logic prevailing.
Graham Allison: Good, exactly. Martian or socialist, or even communist. I remember talking to the fellow who's Xi Jinping's closest collaborator. He's the vice president, Wang Qishan. And he was saying something about communism. And I said to him, "I've been looking for a communist in Beijing" and I said, "I can find a lot of communists in Cambridge, Massachusetts, but I don't think I can find any in Beijing." He just started laughing.
Ralph Ranalli: That's great. Well, thank you so much.
Graham Allison: Thank you.
Ralph Ranalli: Thanks for listening, and welcome to our Spring 2022 season. We have a great lineup of conversations coming up, so please stay tuned. And as always, if you have a comment or a suggestion about our podcast, please email us at email@example.com.