The future of US-China relations looks grim, according to a new report by a group of 25 experts on both countries.The report compiled theories from former senior Obama and Trump administration officials, retired researchers from the Chinese People’s Liberation Army, and academics on both sides, said non-profit Pax Sapiens, which organized the collaboration.A summary of their opinions outlined four major plausible scenarios that could unfold by 2035:1) All-out war2) Both countries rule separate blocs of the world3) A refusal from both parties to cooperate4) Both countries communicate regularly while their economies slowly decoupleNotably, none of these scenarios include an outcome many investors and business leaders still hope for — a dream of shared growth that seemed possible amid thawing relations in the post-Cold War era.A different reality now exists compared to the 1980s, the report said, with the US seeing China as a threat that breaks the rules of the world order and Beijing viewing Washington as trying to stifle its rise.”Observers in both countries predict near-term economic difficulties in the other, and neither feels the other appreciates its history or values,” the report said.Both sides think their military actions are defensive, while the other’s is provocative, the report added.Not every expert agreed on all the details in each scenario, but the analysis represents a loose consensus of their thoughts, Pax Sapiens said in the full report released last week, seen by Business Insider.1) War over TaiwanIf war were to happen, the report posits that it may break out in the early 2030s over Taiwan.The experts listed a timeline of specific events that are purely theoretical, but cover flashpoints that could lead to direct hostilities when combined.US lawmakers call for bans against Chinese students, Taiwan starts to assert independence, China encircles the island, and the Pentagon announces it will defend Taipei, the analysis said. And US scientists might find a mysterious avian flu in China, while China detains five Americans on accusations that they broke the law.”It is not a case of a single escalatory event, or a single crisis that spins out of control,” Conor Seyle, vice president of operations at Pax Sapiens and one of the analysis’ organizers, said at a briefing on Friday about the analysis.”Instead, the war scenario is a scenario of increasing crises leading to increasing distrust in diplomatic solutions,” he said.
As trust breaks down, a series of mishaps like US and Chinese navy ships colliding or clashing, would likely tip both countries into a full-scale war. The scenario, however, did not go so far as to predict nuclear war.2) A zero-sum bloc gameOr US-China trade could fall to all-time lows by the late 2020s, with competition ramping up over AI, quantum computers, and other technology, the analysis said.As both sides impose more export controls on each other, US allies in Europe and the Asia Pacific might band together with Washington, while BRICS — the bloc involving Brazil, Russia, India, China, and Saudi Arabia — develop their own separate technology.”Parallel, mutually firewalled, and incompatible technology regimes discourage and, in some instances, prevent communication across blocs,” the report theorized.Proxy wars involving religious extremists or terrorists might become more frequent, while Latin America and Africa become divided over who they side with, it added.One positive element of this scenario is that green technology might flourish because of an urgent need for more energy, the analysis said.But overall, the result would be “the collapse of the WTO” and “a negative drag on global GDP growth” in a zero-sum game between Washington and Beijing. The threat of war would also linger by 2035, the experts said.3) “Lurch from crisis to crisis”It’s also possible that while no confrontation takes place by 2035, communication and cooperation between both countries could worsen, the analysis said.This scenario predicts what would happen with two prerequisites: China solidifies its presence as a global trade power, enough for Europe to bolster economic ties with Beijing, and the US scales back visits to and aggressive support for Taiwan.But both countries will accuse each other of violating international trade rules — the US would say China uses state resources to create unfair market competition, while China would say the US does the same and holds itself to a double standard.Beijing and Washington might manage to avoid war by showing baseline restraint, but nothing more, the analysis said.With no mutual agreements or guiding principles to shepherd their relations, the United States and China could “lurch from crisis to crisis with ad hoc responses, barely managing to forestall escalation.”4) Self-reliance and a modified status quoPerhaps the sunniest of these scenarios is the idea that the US and China might slowly and calculatingly decouple their economies in a way that avoids misunderstanding or war.Still, the analysis says that in this timeline, “it’s clear that the main tenets of the post-1980s US-China bilateral relationship have broken down.”Both nations may start to emphasize self-reliance, specifically building up their economies to function without the other, the analysis said. The winners are likely to be low- and middle-income countries in Latin America, Africa, and Southeast Asia, with their raw materials and labor being coveted by either side.Yet in this scenario, the two countries maintain regular communication channels to avoid escalation whenever small crises take place, the analysis said.Taiwan would avoid declaring independence, while the US would stick to the One China Policy. China might start to think that if it could dominate global trade, Taipei would eventually ask to reunify.”But even with this hope for selective engagement, the US-China relationship remains vulnerable to political swings in both countries that could easily lead to rapid deterioration in relations and a dangerous escalation of tensions,” the report said.Seyle emphasized that the analysis isn’t presenting forecasts, but theoretical scenarios that hit areas of concern in broad strokes.”The reason why it’s narrative is because we are story-telling creatures,” Seyle said at the Friday briefing.In a closing section, he and two of the report’s organizers said they intended for the analysis to realistically “anticipate possible challenges the two countries might plausibly be facing.””We organized this project at a time of general pessimism about the prospect of the current US-China relationship,” wrote Seyle, Ren Libo of the Chinese think tank Grandview Institute, and Adam Kahane of Massachusetts-based consultancy Reos Partners.
