China

Defense, trade, innovation – America and China are engaged in total competition, but their mutual dependence makes dialogue essential. It was in October, during our last visit to Shanghai. A renowned economist asked us a highly relevant question: “What does Europe produce that we do not have and really need? The only exception, perhaps, are the ASML machines necessary for the production of advanced semiconductors. But we are catching up.” In the eyes of this prominent member of the Chinese Communist Party, the verdict was clear: the Old Continent was out of the race. In the global competition, all the attention of our counterpart was focused on another competitor, the only one that mattered in his eyes: the United States.

This perspective is harsh for Europe. But it is rational, as the two powerhouses are ahead in major power criteria (defense, economy, innovation…). Between them, there is a match, of course, and when shaking hands with his Chinese counterpart, President Trump can boast. America dominates the global economy head and shoulders. According to the International Monetary Fund, it holds 27.5% of the wealth compared to 17.7% for China. Its currency, the dollar, reigns supreme. Nearly 60% of global foreign exchange reserves are denominated in greenbacks, and they are used in eight out of ten commercial transactions. The “dollarization” that Beijing and Moscow regularly call for is still a myth.

In terms of defense, the second pillar, along with the economy, of what Harvard’s star professor Joseph Nye called “hard power”, the United States also crushes the competition. With a budget of $954 billion last year, Washington’s military spending is roughly three times that of Beijing, according to experts at the Stockholm International Peace Research Institute. And Washington has the combat experience that the People’s Liberation Army lacks. At sea, the Americans have eleven aircraft carriers compared to three for the Chinese, even though the dynamics favor Beijing as shipyards are running at full capacity while the US Navy struggles to modernize its fleet.

Context: The article discusses the intense competition between the United States and China across various sectors such as defense, trade, and innovation. The analysis highlights the strengths and weaknesses of each country in this global rivalry.

Fact Check: The article accurately reflects the economic and military competition between the United States and China, citing relevant statistics and expert opinions on the topic.