Fynsa
The rivalry between the U.S. and China is not just about who has the larger economy, but how these two superpowers manage a difficult relationship of interdependence and competition.. Although the U.S. maintains the world's largest economy, its growth is not the fastest, and this is crucial, because a faster growing economy can challenge U.S. leadership. China is already on that pathraising many doubts about the future of this global dynamic.
In 2020, during the strategic vision presentations that I discussed with several of our clients, I talked about the world's largest trade agreement: the Regional Comprehensive Economic Partnership (RCEP).The Regional Comprehensive Economic Partnership (RCEP). The RCEP is a free trade agreement in the Asia-Pacific region that includes 15 countries, such as Australia, China, Japan, South Korea and New Zealand, among others. Signed on November 15, 2020, it entered into force on January 1, 2022, and covers approximately 30% of global GDP and nearly one-third of the world's population.
For many, this agreement may have gone unnoticed due to its geographic remoteness. However, it is no coincidence that China, the main promoter of the RCEP, was looking for strategies to counteract growing tensions with the United States. to counteract the growing tensions with the United States, which was imposingwhich was imposing higher tariffs and sanctions on its businesses, as was the case with Huawei during the Trump administration. Meanwhile, China was implementing internal changes, regulating techs such as Alibaba and Didi, and allowing large real estate companies to fall. The focus was on self-sufficiency and economic strength by 2035..
The importance of these changes became even more evident when Russia invaded Ukraine and the West decided to freeze Russia's dollar reserves as a sanction. to freeze Russia's dollar reserves as a sanction.. For China, the lesson was clear: the strategy is to abandon dollar transactions and encourage trade in its own currency. to abandon dollar transactions and encourage trade in its own currency.. This is one of the key objectives of the RCEP, as it provides China with more independence and long-term projection. China seeks to reduce its external dependence not only on the dollar, but on other players in general. This effort is part of a broader industrial policy that seeks to make China more independent and thus give it more influence and power globally.
The United States and China are not rivals in the classic Cold War sense. These two nations are, at the same time, customers, suppliers and competitors. This multifaceted relationship means that any change in policy or economics in one of these countries has direct and indirect repercussions in the other (Trump 2025).
Despite Western efforts to reduce dependence on Chinese supply chains, China has significantly increased its trade surplus by expanding into emerging markets. Over the past five years, while China's trade with the United States has stagnated, its trade with Southeast Asia has more than doubled. Today, China's trade with Southeast Asia is more important than with the United States, reflecting a realignment of its trade with Southeast Asia.reflecting a significant strategic realignment.
The U.S.-China relationship is evolving, influenced by a combination of economic and geopolitical factors. Both nations are adopting strategies to manage this complex interdependence, seeking a balance between cooperation and competition while reducing their vulnerabilities. In this context, the key for both countries will be to find ways to coexist and collaborate, despite their differences, to ensure long-term global stability.
