Abstract: The economic and technological rivalry between China and the United States in the twenty-first century holds an uncanny resemblance to that between Bismarck’s Imperial Germany and a preeminent Great Britain in the nineteenth and early twentieth. Both rivalries feature competing states enmeshed in profound interdependence at a time of explosive technological innovation. Both feature an established democracy with a free-market system feeling cheated by a rising autocracy with a state-protected economic system, and choosing to lash out with counterproductive unilateral tariffs. Finally, both rivalries reveal that such competition is about much more than tariffs: it is also about sophisticated instruments like standard-setting, technology acquisition and theft, financial power, and infrastructure investment. We argue that, like Great Britain a century ago, the United States is ignoring these more sophisticated instruments of competition with its narrow focus on ineffective blunt force tariffs that alienate allies (as the recent G-7 breakdown suggests) without weakening adversaries. 

As the Anglo-German rivalry demonstrates, a truly competitive American approach requires a fuller range of instruments combined with robust efforts to harness network power in economic and technological domains, especially through multilateralism. Unfortunately, Washington’s limited and unilateral approach risks being confrontational without being competitive.


Introduction : 


Great power competition is back. As China and the United States ramp up their strategic rivalry, the search is on for a vision of what their evolving great power competition will look like in a globalized and interconnected world. 



The looming trade war and ongoing technology competition between Washington and Beijing suggest that economics may be the central battlefield in the bilateral contest. Much of the abundant literature on great power competition and grand strategy focuses on military affairs, and little of it prepares us for what economic and technological competition among great powers looks like, let alone how it will be waged.1

But great power economic competition is nothing new. Indeed, the rivalry between China and the United States in the twenty-first century holds an uncanny resemblance to that between Germany and Great Britain in the nineteenth. Both rivalries take place amidst the emergence of economic globalization and explosive technological innovation. Both feature a rising autocracy with a state-protected economic system challenging an established democracy with a freemarket economic system. And both rivalries feature countries enmeshed in profound interdependence wielding tariff threats, standard-setting, technology theft, financial power, and infrastructure investment for advantage. Indeed, for these very reasons, the Anglo-German duel can serve as a useful guide for policymakers seeking to understand the dynamics of the emerging Sino-American competition – as well as the strategies and tactics likely to be employed and the risks and dangers likely to be incurred. 

The Roots of Rivalry

The Anglo-German rivalry, like the present Sino-American one, was as much a clash of two countries as it was of two systems: the liberal, free-market constitutionalism of an established 

Britain and the autocratic, state-protected development of a rising Germany. Indeed, differences in economic system amplified the salience of the narrowing economic gap, leading the established power to feel cheated and the rising power to feel unsatisfied and threatened. 


Germany and China both believed their struggle for unification left them as latecomers to modernization. Germany industrialized in the 1850s nearly a century after Great Britain while China emerged from the Century of Humiliation and then the senseless stagnation of Maoism only in 1979. Both countries believed that catching up with established powers required statedirected economic and technology programs. Fair competition was beside the point and national  strength was the goal under both Bismarck and Deng, to the eventual detriment of relations with the free-market Great Britain and the United States.