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Power and Interdependence Within the Economies of the United States and China

In class, we discussed the influence of power within social networks.  In this discussion, the term dependence was mentioned, which occurs when a node is completely dependent on another node as its source of value, due to a lack of outside sources. This dependence decreases the power of the outer nodes, while simultaneously increasing the power of the central nodes that have multiple options to trade with. On the other hand, nodes of high power can be interdependent by trading with each other. By keeping trade between themselves, they do not allow for other nodes to gain enough power through outside trade. This interaction is seen within the trade balance between the United States and China because, when combined, “China and the United States… account for a third of the world’s economic aggregate, a quarter of the world’s population, and a fifth of total global trade” (Wyne par. 9).

In the past, this interdependence has benefitted both countries and kept both in economic power, however, as China’s economy starts to shift its focus, its dependence on the United States has started to decline: “As China’s economic growth becomes more consumption-driven… it will become less dependent on exports to the United States. While China’s exports to the United States nearly quintupled between 2000 and 2014…the share of China’s exports going to the United States went from two-fifths to a fifth” (Wyne par. 4). Alongside China’s shift in economic focus, there arises a shift in power due to this previous interdependence between countries. The United States gained both business and economic power with this trade. As China’s economic focus shifts and as its “comprehensive national power approaches America’s, its economic dependence on the United States declines” (Wyne par. 11). The U.S. will not have as much power with respect to China and other countries due to this fact. China has less of a need to trade with the U.S., decreasing the United State’s power as it has to seek other countries to trade with.

This change was predicted to slowly occur over many years, but altercations like those in August 2017 may accelerate this separation. The Ministry of Commerce said that China will “take action to defend its interests if the United States damages trade ties” shortly after President Donald Trump “authorized an inquiry into China’s alleged theft of intellectual property” (Martina par. 1). Damaged trade ties within these countries will likely decrease the power of both if such actions were taken.  With each aggravating incidence, the trade ties are weakened by mistrust and anger, which may speed up the process faster than what we are prepared to deal with.

https://www.carnegiecouncil.org/publications/ethics_online/0106

https://www.reuters.com/article/us-usa-trump-trade-china/china-says-it-will-defend-interests-if-u-s-harms-trade-ties-idUSKCN1AV088

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