| I

U N D E R S T A N D I N G

A NEW ERA
of STRATEGIC

COMPETITION
MICHAEL J. MA Z ARR, BRYAN FREDERICK , Y VONNE K. CR ANE
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U N D E R S T A N D I N G

A NEW ERA
of STRATEGIC

COMPETITION
MICHAEL J. MA Z ARR, BRYAN FREDERICK , Y VONNE K . CR ANE
CONTENTS

E XECUTIVE SUMMARY 1

INTRODUCTION AND METHODOLOGY 4

OVER ALL CONTE X T FOR THE COMPETITION 10

M E A S U R E S O F N AT I O N A L P OW ER A N D C O M P E T I T I V EN E S S 12

M E A S U R E S O F I N T ER N AT I O N A L P O S I T I O N A N D I N F L U EN C E 24

M A P P I N G T H E B I L AT ER A L C O M P E T I T I O N 34

CONCLUSION 40

BIBLIOGR APHIC NOTE 43

ACKNOWLEDGMENTS

The authors extend their heartfelt thanks to RAND colleagues who worked to help
gather and interpret the information presented in this report:

Samuel Charap, John Drennan, Emily Ellinger, Kelly Eusebi, Greg Fauerbach,
Benjamin Harris, Timothy Heath, Grant Johnson, Stephanie Pezard, Bryan Rooney,
Andrew Stravers, and Emily Yoder.
 | 1

E X E C U T I V E S U M M A RY
UNDERSTANDING A NEW ERA OF STRATEGIC COMPETITION

With the release in 2022 of the new U.S. National Security Strategy and unclassified FRAMEWORK FOR ASSESSING A COMPETITION BETWEEN
summary of the National Defense Strategy, the United States has confirmed the MAJOR POWERS
existence of a new era in defense planning: Replacing a focus on non-state extremist
1. OVERALL CONTEXT FOR THE COMPETITION
groups with an overriding emphasis on threats posed by near-peer major powers.
The environment in which the competition is unfolding
This new focus was heralded by the 2017 National Security Strategy and 2018 National
• A more multipolar world system
Defense Strategy, and it is now clear, especially in the wake of Russia’s invasion of
• Challenges to the neoliberal model
Ukraine, that the emphasis will persist. Yet even now, years into an embrace of such
• Fourth Industrial Revolution
strategic competitions as the core of national security planning, the United States
• Rise of vulnerable infospheres
lacks a clear framework for understanding these competitions, a precise theory of what
• Climate change and crisis
they are essentially about, and an objective diagnosis of where they stand.
2. NATIONAL POWER AND COMPETITIVENESS
This study, performed for the Under Secretary of Strategy and Force Development The critical components of domestic national power and vibrancy that
office within the Office of the Under Secretary for Policy in the U.S. Department of support competitive standing
Defense, addressed those issues. To do so, the research team reviewed historical cas- • Overall productive capacity of country
es and theoretical work on major-power competition and rivalry; literature on national • Ability to build frontier technologies
power and competitiveness; and assessments of Russian and Chinese goals and strat- • Fiscal agility
egies in the current competition. We conducted especially detailed analyses of the • Effectiveness of governance
U.S.-China competition for influence and sources of power. And we gathered extensive • Level and effectiveness of military resources
economic, military, and geopolitical data to assess the status of the competitions. This
report outlines several top-level findings derived from this research, illustrated by a
3. INTERNATIONAL POSITION AND INFLUENCE
Elements of global posture, power, and influence that shape a
small portion of the data we gathered.
nation’s relative position
• Economic posture and engagement
U . S . L E A D E R S S H O U L D C O N S I D E R F O U R E S S E N T I A L C AT E G O R I E S
• Military posture and engagement
TO CONCEPTUALIZE AND ASSESS MAJOR-POWER COMPETITIONS
• Paradigmatic and ideological competition
• Alignment of key states
Our review of historical rivalries and their outcomes supported a simple, four-part

EXECUTIVE SUMMARY
framework that can be used to understand and assess the status of a strategic com-
4. THE SHAPE AND STANDING OF BILATERAL COMPETITIONS
petition. The text box at right lays out these four elements. Most of the summary report Specific clashing interests and objectives that define the nature of the
that follows is devoted to examining each of these four areas in detail. bilateral contests
• Core national interests
THE FORMULA FOR U.S. COMPETITIVE SUCCESS IS DOMESTIC STABILITY • Areas where interests clash or intersect
AND VIBRANCY COMBINED WITH STRONG GLOBAL ALLIANCES, • Frequency of areas of competition
N E T W O R K S , A N D PA R T N E R S
 2
| UNDERSTANDING A NEW ERA OF STRATEGIC COMPETITION
T H E I M PA C T O F T H E C OV I D - 1 9 PA N D E M I C O N
S T R AT E G I C C O M P E T I T I O N
The foundational research for this analysis was largely completed before
the onset of the COVID-19 pandemic in early 2020. For this report, we
have updated several key measures to take account of the current and
projected economic and diplomatic effects of the pandemic. In the main,
however, we find that national objectives, strategies, and alignments
remain as they were before the pandemic, albeit adjusted at the margins.
The essential findings of this study remain valid.
The factors most commonly associated with success in strategic competitions involve
a combination of a vibrant domestic base—economic growth, strength in frontier in-
dustries, and political and social legitimacy and stability—combined with a favorable
alignment of global geopolitical power. This basic combination can take different forms,
including the extent to which a favorable balance of global power relies on a state’s
own capabilities versus those of its allies and partners, but it is the essential formula for
success in major-power competitions across history and is likely to be so again today.
THE UNITED STATES MUST COMPETE IN A WORLD OF HEDGING POWERS
Few countries in the world perceive the danger posed by either Russia or China
to be as urgent as the United States currently does. Many critical emerging
powers have tightly held doctrines of geopolitical independence or non-alignment;
even some U.S. allies, especially in Asia, are reluctant to formally take sides in the
U.S.-China competition. As it pursues these competitions, the United States will
seldom be able to dictate solutions or obtain reflexive support for competitive policies
EXECUTIVE SUMMARY
to the degree it would like.
U.S. COMPETITORS HOPE—AND PLAN—TO SUCCEED SHORT OF WAR
Both China and Russia aim to achieve their strategic objectives without engaging in
major warfare, if possible. They wish to do so for various reasons, including the
desire to remain legitimate in the eyes of the world community and to preserve
respect for U.S. military power and the risks of nuclear escalation. This is not to sug-
gest that such wars have become impossible or that the U.S. Department of Defense
can or should stop preparing for them. Rather, this fact highlights the importance
of a balance in investments, plans, and activities between preparing for major war
and engaging in day-to-day competition. A lack of U.S. attention to or investment in
non-military capabilities would risk ceding ground in the very areas where U.S. rivals
would prefer to seek their advantage.
C H I N A , R U S S I A , A N D T H E U N I T E D S TAT E S H A V E S U R P R I S I N G LY
F E W I R R E C O N C I L A B L E I N T E R E S T S — B U T S H A R P LY C O N F L I C T I N G
A M B I T I O N S T H AT A R E L I K E LY T O P R O D U C E R E C U R R I N G C R I S E S
Our assessment of the bilateral interests in the two competitions suggests that the
United States and both Russia and China have relatively few vital interests that are
irrevocably opposed. All parties to these competitions desire greater relative influence
and power. But there are few if any core elements of national survival or security over
which they are engaged in irreconcilable, zero-sum clashes with the others. In theory,
these competitions can be managed short of conflict.
T H E C O M P E T I T I O N I S M O S T C E N T R A L LY A B O U T I N F L U E N C E O V E R
T H E C H A R A C T E R O F T H E I N T E R N AT I O N A L S Y S T E M
The bilateral competitions with Russia and China have many elements—military,
economic, and geopolitical. But, particularly with respect to China, they represent most
fundamentally an effort to shape the dominant rules, norms, and institutions of the in-
ternational system. This suggests, among other things, that the United States could re-
main the predominant military power yet see its standing in the competition lag if it loses
influence over the international order. Ensuring U.S. competitive advantage demands
greater attention to non-military aspects of the contest, especially the domains of
information and economic statecraft.
T H E U N I T E D S TAT E S R E M A I N S I N A S T R O N G C O M P E T I T I V E P O S I T I O N
Russia is a significant military power with a large nuclear arsenal, and stable
relations with Moscow should be a high priority. But Russia cannot rival the
United States for global influence: Its domestic economy has powerful constraints,
it is not a global technological leader, and it has very limited allies. In the more
challenging competition with China, the United States also retains enduring
advantages, including the global balance of geopolitical alignment and the
persistent strength of its dynamic, open economy. As a result, the true story

of this bilateral relationship is not one of a “power transition” but of China
joining the United States as one of the world’s two dominant powers. The United
States, for example, is likely to maintain a decisive lead in alliances, partnerships,
and security networks; U.S. global influence in norms, values, and institutions
should, if carefully managed, remain dominant as well.
SETS OF EMERGING TECHNOLOGIES AND REVOLUTIONARY
O P E R AT I O N A L C O N C E P T S T H R E AT E N H A B I T U A L U . S . W AY S O F
WAGING WAR
The primary risk in defense policy is likely not that the United States will fall behind
in one system or a small number of them, or that it will have insufficient forces for
major contingencies. Instead, military competitions tend to shift with inflection points
in how wars are fought, as well as the operational concepts and supporting technol-
ogies associated with those changes. Emerging technologies ranging from autono-
mous systems to artificial intelligence create the potential for just such an inflection
point over the next decade—and U.S. rivals are working to take advantage of the
change to undermine the effectiveness of traditional U.S. military concepts of oper-
ations. Of course, the United States has the opportunity to embrace and leverage
these emerging technologies as well, should it provide sufficiently flexible and inno-
vative to do so.
MUCH PROGRESS HAS BEEN MADE IN U.S. COMPETITIVE POSITION,
BUT CRITICAL GAPS REMAIN
The U.S. government, led by the Department of Defense, has begun to address many
of the priorities suggested by this analysis. But this work highlights several specific
areas which require additional attention and in some cases resources: Institutional
reforms in the U.S. national security bureaucracy; changes in policies to ease the
challenge of working closely with allies and partners; improved tools for competing
short of war; bringing new operational concepts to fruition; and developing strategies
for working productively with hedging nations.
| 3
I D E N T I F Y I N G N AT I O N A L P R I O R I T I E S
Based on these and other findings, this report points to priority areas for
investment that our research suggests would have significant value in
contributing to the U.S. competitive advantage. The underlying theme of
these recommendations is the critical importance of investing as much in
the essential national foundations of competitive strength as in outward
applications of power.
N AT I O N A L P R I O R I T I E S I D E N T I F I E D B Y O U R R E S E A R C H I N C L U D E
THE FOLLOWING:
• Maintaining economic and financial strength and flexibility
 ustaining a lead or share of the lead in emerging technologies and
• S
industries
• Protecting the information environment of the U.S. homeland
 eveloping tools and techniques to engage in ongoing competition
• D
with adversaries
• Preserving leading U.S. influence in global institutions
IN TERMS OF DEFENSE INVESTMENTS, OUR ANALYSIS IDENTIFIED
THE FOLLOWING PRIORITY AREAS:
• Avoid significant lag in military applications of frontier technologies
 void vulnerability to novel packages of technologies and operational
• A
concepts used to generate decisive military effects
• Invest in military and paramilitary capabilities to compete below
the threshold of major war
EXECUTIVE SUMMARY
• Invest in and promote policies to sustain and deepen alliances
• Develop concepts and joint force capabilities to achieve assigned
objectives in regional contingencies and long-range power projection
missions in the short and long terms
 4
|
INTRODUCTION
UNDERSTANDING A NEW ERA OF STRATEGIC COMPETITION
The idea that a strategic competition with other major powers now forms the core
challenge for U.S. foreign and defense policy is now well established. Yet there is no
consensus about what this shift means. Commentators use such terms as “compe-
tition,” “rivalry,” and “great-power competition” to mean different things. There is no
agreement about what the competition is most essentially about, the most important
priorities, or how countries succeed. The Russian invasion of Ukraine has brought new
intensity to the competition, but the long-term implications of the war remain unclear.
Part of the challenge is that the United States has fallen out of practice in managing
geopolitical rivalry since the end of the Cold War. The 2002 version of the U.S. Na-
tional Security Strategy argued that “Today, the international community has the best
chance since the rise of the nation-state in the seventeenth century to build a world
where great powers compete in peace instead of continually prepare for war”—es-
sentially declaring large-scale national rivalries to be a thing of the past. It has been
decades since the U.S. national security community had to grapple with the prospect
of such rivalries. More broadly, the United States has not witnessed the start of a
new era of overarching geopolitical competition since 1945–1950—and the emerging
form of competition promises to be far more complex than the bilateral contest of
warring systems that characterized the Cold War.
INTRODUCTION AND METHODOLOGY
In short, while there is a general consensus that the United States is now in a new era
of strategic competition, there is not yet a clear understanding of what that means,
what forms it could take, or how the United States can best position itself to suc-
ceed. This project, undertaken for the U.S. Department of Defense, sought to provide
insight on these questions.
PRIMARY RESEARCH GOALS
To provide such insight, the project had four primary goals:
1. Develop a research-based framework for understanding the competition and
assessing its status.
2. Gather data in categories suggested by the framework to provide a snapshot
of the competition today, and where it appears to be headed.
3. Identify decisive areas of competition, and assess the current status of the
competition in those areas.
4. Develop general insights and policy options relevant to a comprehensive
understanding of the competition.
This report offers a summary of selected project findings in each of these four
areas. First, we review evidence about the goals and objectives of the major
players in each current competition and then define a four-part framework to
understand strategic competitions. We then review key facts and trends in each
area of that framework: the international environment for competition; the
measures of national power and competitiveness, measures of international
position and influence, and the specific aspects of the major bilateral competitions
between the United States and both Russia and China. We conclude by offering ma-
jor findings from the study on U.S. priority efforts and policies.
A N E W S T R AT E G I C L A N D S C A P E
Much of the research for this project was completed before the COVID-19 pandemic
crisis struck the world in early 2020. All of it was completed before Russia’s invasion
of Ukraine in February 2022. Those crises are likely to have significant implications
for the environment in which the strategic competition unfolds—the intensity and
level of instability of the rivalries, resources available to major powers, the relative
focus on global as opposed to domestic security issues, geopolitical relationships,
and much more. However, our assessment is that essential national interests and
ambitions, and the fundamental drivers of competition, remain unchanged and have,
in some ways, been intensified by these crises.
Russia’s aggression in Ukraine has transformed the general context for these rival-
ries. It has placed the United States into a far more zero-sum position regarding the
Putin regime and its ambitions. While the United States has rightly rejected the goal
of regime change in Moscow, it will never again be able to have regular relations with
this Russian government. As this report is published, the potential for further esca-
lation and a more destructive war remains very real. Massive U.S. and Western sup
 |5

port for Ukraine has entrenched the rivalry with Russia and resurfaced long-standing
concerns about the U.S. defense industrial base. And China’s position of de facto • Our assessments of the status of competition in various issue areas incorporat-
support for Russia, and its own intensifying rhetoric about its contest with the United ed limits and qualifications where the data were uncertain or
States, suggest that the war in Ukraine is deepening the U.S.-China rivalry as well. conflicting.

C O P I N G W I T H U N C E R TA I N T Y • We have highlighted potential uncertainty ranges in several economic

projections.
One challenge in assessing data on the status of these strategic competitions, and
especially in considering possible forecasts for how they could unfold over
time, is incorporating uncertainty into our analysis. Intense debates rage, for
example, about a topic as fundamental as China’s gross domestic product (GDP)
and GDP growth rate: Some observers believe that official statistics for both are sub-
stantially overstated. All projections about the future incorporate critical assumptions
that shape their estimates—about the future international environment and the poli-
cies of various actors. Even relatively more reliable estimates like demographic trends
can shift over time.

International politics is a classic complex adaptive system characterized by intense

amounts of dynamic feedback and many nonlinear processes. Many central elements
of the current competitions could play out in dramatically different ways. The war in

INTRODUCTION AND METHODOLOGY

Ukraine, for example, could spawn dozens of different implications depending on its
further course and how it ultimately resolves. U.S. strategy must prepare for many
possible outcomes, rather than a single future.

This study incorporated several approaches to deal with uncertainty:

• The general analysis of the nature of competitions was grounded in

historical and theoretical analyses that aimed to identify consistent patterns
within the larger complexity.

• In considering economic projections, we reviewed multiple sources

and cross-referenced their assumptions, data sources, and forecasts.
6
| INTRODUCTION

COMPETING
W H AT D O H I S T O RY A N D T H E O RY
S AY A B O U T T H E F O C U S O F
COMPETITIONS?

for W H A T ?
This is not the first time that major powers have
faced off in geopolitical competitions. Our review of
historical cases and theoretical literature on great-
power rivalries pointed to characteristic areas of
competition—places where major powers typically
vie for power and influence:

• relative power (economic and military)

• domestic security
• status and prestige
• resources
• territorial claims
• values and ideology
• power to shape the character of the system
and paradigm (norms, values, rules, institutions).
Goals, objectives, and interests provide a critical
conceptual lens to understand what the main participants This set of factors, derived in part from rich histori-
cal cases like the rivalry between Great Britain and
are competing for and the essence of the competition. Germany that ran from the late 19th century through
World War II, is a good starting point for thinking
To have a sense of how it is doing in a competition with rivals in the international system, any state must about the likely focus points—and relative goals
comprehend what it is trying to achieve, the ambitions of others, and how those goals and ambitions interact. and objectives—of the United States, China and
Without a clear and or agreed-upon set of goals and objectives, there is no way to judge success or failure. Russia today.

We sought to develop a set of potential U.S. objectives for strategic competition and make an initial
comparison with Chinese and Russian goals. We undertook several parallel lines of research to do this:
S A M P L E H I S T O R I C C O M P E T I T I O N C A S E S T U DY
United Kingdom–Germany, 1898–1945
• We reviewed historical and theoretical literatures to discover what great powers commonly
compete for in such rivalries.
• We looked at official statements of U.S. national interests in national security documents to
gain a modern historical sense of U.S. national security goals.
• We surveyed official Chinese and Russian policy and strategy documents, as well as open source
literature on their strategies, to identify their current objectives.

The graphic on page 7 describes the results of this research, and proposes five fundamental U.S. objectives
for the emerging strategic competition.
 |7

W H AT T H E E M E R G I N G C O M P E T I T I O N I S A B O U T:
U.S., C H I N E S E , A N D R U S S I A N G O A L S A N D O B J E C T I V E S

Competitions do not arise by accident; they are the product of clashing interests and objectives on the part of major powers. Any assessment of the character of a strategic com-
petition must begin with an evaluation of those interests and objectives. This analysis of relative goals and objectives provides an initial indication of the true core or essence of the
emerging contest: It is a competition for the character of the international system more than for specific forms of military power or the outcomes of specific geopolitical disputes.

Predominant elements of the competition involve the contest for leadership of the international system and its institutions, rules, norms, processes, and informal coalitions; the value
orientation and practical interest-based alignment of major geopolitical actors; and leadership in key emerging technology areas.

CLASH OF OVERARCHING GOALS AND OBJECTIVES

KNOWN OBJECTIVES PROPOSED U.S. OBJECTIVES*

• Maintain Chinese Communist Party rule and • 
PRESERVE THE SECURITY OF THE HOMELAND
domestic stability at home AND DOMESTIC POLITICAL INSTITUTIONS
• Continue economic growth at high levels from direct attack and/or manipulation—physical
or virtual and informational
• Maintain favorable global/regional environment

CHINA • Dominate selected technological areas 

• 
B O L S T E R A N D P R OT E C T T H E F O U N D AT I O N S

• Gain dominant position in selected key markets O F N AT I O N A L P R O S P E R I T Y through domestic

competitiveness, access to markets, security
• Continue establishing basis for resolution;
from predation by others
Taiwan claim first, South China Sea issues later
• 
AV O I D R E G I O N A L H E G E M O N Y B Y OT H E R S
ASSESSED OVERARCHING GOAL
by preserving the security of allies and the
• Continue progress toward regional primacy and
sovereign independence and helpful align-
global leading power status
ment of key strategic actors UNITED
STATES
• 
A V O I D M A J O R WA R A N D P R E S E R V E S TA B L E
KNOWN OBJECTIVES
R E L AT I O N S with competitors allowing for
• Ensure regime security and stability; avoid foreign
at least minimal coordination on issues of
meddling and political instability
mutual interest
• Achieve regional hegemony, including consolidating
influence over the “near abroad” • 
 S H A P E T H E D O M I N A N T G L O B A L PA R A D I G M
RUSSIA and, in the process, promote and underwrite
• Reinforce great-power status
liberal values and norms
• Neutralize Western threats to regime security and gain
influence through political and informational means ASSESSED OVERARCHING GOAL
• Maintain strategic nuclear parity with the United States • Maintain predominant international position and
influence over the global order
ASSESSED OVERARCHING GOAL
* Objectives derived from analysis of multiple U.S. National Security
• Reclaim great-power status and control over periphery Strategy documents, proposed by RAND analysis
8
| INTRODUCTION

RESEARCH RESEARCH APPROACHES

HISTORY AND THEORY

Review classic great-power competition,

M E T H O D S and
dyadic rivalry, and national power literatures

POWER AND COMPETITIVENESS

Review and assess indexes of national
power and elements of competitive

FRAMEWORK
advantage

A N A LY S I S O F I N D I C A T O R S A N D D A T A
Identify more than 100 indicators
of domestic and international components
of competition and review current data

S Y S T E M S A N A LY S I S
Derive criteria for successful systemic
strategies from complexity theory and
systems dynamics literatures

F U T U R E S M AT C H I N G A N A LY S I S
We used multiple methods to capture the essence of Review major long-term trend and risk
strategic competition and evaluate its status today. analyses, review competitors’ long-term
strategies
This project used multiple lenses to gain insight on the strategic competitive landscape and to support data-
informed qualitative judgment. A phenomenon as complex as a multi-party strategic competition cannot ASSESSING CHARACTER OF SPECIFIC
be reduced to simple indexes or models; data and correlations can contribute to understanding, but they COMPETITIONS
cannot provide definitive guidance. Thus, we used a range of historical, theoretical, case-based, and data- Research and collect data on each competi-
driven research methods, summarized at right. tive area, identify criteria for priorities

T H E R E S U LT I N G R E S E A R C H S U R V E Y E D A S I G N I F I C A N T S E T O F L I T E R A T U R E A N D D A T A : M A P P I N G B I L AT E R A L C O M P E T I T I O N S
Analyze U.S. vs. Russian or Chinese
100s of articles in >75 historical 100s of reports + 100s + 10,000s interests, mapping interaction and identifying
four major distinct rivalries examined; articles on Chinese independent variables + conflicts
categories of interna- conducted in-depth and Russian data points that integrate
tional relations analysis of five competitive goals into power indexes

An initial task was to build an analytical framework to conceptualize strategic competition. Such a framework Sources used in this research are listed in the
provides a roadmap for understanding the key factors that determine the nature and outcome of such compe- Bibliographic Note at the end of the report.
titions. This framework appears on page 9.
 |9

An initial focus of our research was to generate an analytical lens to help make sense of the enormously complex phenomenon of
a multipolar competition. Our review of historical cases and the strategies and tactics of current competitors pointed to four core
areas of importance: the global context in which a competition is unfolding, the sources of domestic power of the competitors, their
relative international power and influence, and the precise conflicts of interest and ambition between the competitors. These four
areas comprised our framework for analysis and initial approach to assessing the strategic competition.
FRAMEWORK
FRAMEWORK COMPONENTS INDICATORS/CRITERIA

1 OVERALL CONTEXT FOR THE COMPETITION

Understand how aspects of international context— • Geopolitical

such as geopolitics and economics—and trends • Social
shape the strategic competition environment. • Economic
• Military
• Environmental

2 N AT I O N A L P O W E R A N D C O M P E T I T I V E N E S S

Assess relative standing on key measures of
ability of nations to serve as engines of compet-
itive strength.
• Overall productive capacity of country
• Ability to build frontier technologies
• Fiscal agility
• Effectiveness of governance
• Level and effectiveness of military resources

3 I N T E R N AT I O N A L P O S I T I O N A N D I N F L U E N C E

Assess current standing, sources, and underly- • Economic posture and engagement
ing drivers of relative international standing. • Military posture and engagement
• Regional and expeditionary contingency capabilities

INTRODUCTION AND METHODOLOGY

• Paradigmatic and ideological competition
• Alignment of key states

4 M A P P I N G B I L AT E R A L C O M P E T I T I O N S

Assess and measure the leading areas of mutual • Core national interests
the

confrontation and current status of the competition. • Areas where interests clash or intersect
• Frequency of areas of competition

Subsequent sections of this report lay out key findings and insights in each area of the framework, starting with the nature of the strategic
context and its implications for the competition.
10
|

OVER A L L C O N T E X T
Trends and factors shaping the strategic competitive environment
Any strategic competition unfolds in a larger context—geopolitical, economic, social, military, and ecological. Major trends underway in each of these areas can strengthen or weak-
en major competitors. Countries that align themselves with the “spirit of the age” can gain a competitive advantage; those that fail to keep up with the demands of the context, or to
use its opportunities to their benefit, will slip behind. The emerging global context could have especially dramatic effects on the strategic competition: The world arguably stands at
an inflection point—in terms of politics, technology, and the character of warfare—that presages dramatic change. Major powers that compete effectively will ride the wave of these
changes rather than being placed at a competitive disadvantage.

HISTORICAL TRENDS
An important source of insights on the current competition is the rise and fall of strategic competition and rivalry throughout modern history. A general pattern emerged: Periods of
more zero-sum competition and warfare gave way to times when states reined in their ambitions and cooperated to achieve a degree of collective security. Each era offered lessons
in the sources of competition.

C O M P E T I T I V E E N V I R O N M E N T PA R A D I G M : 1 7 8 9 – 2 0 0 0

Collective order-building Periods of increasing instability, including crises and wars

Order degrades as instability increases

Concert of Europe League of Nations United Nations/Era of Institution Building

1815–1913 1919–1931 1945–

Napoleonic Crimean Franco- World World

Wars War Prussian War War I War II
French European Financial Fall of
NATO
Revolution Revolutions crisis Berlin Wall

Cold War
(USSR/U.S.)
1789–’99 1803–’15 1848 1854 1870 1914–’19 1929 1939–’45 1949 1945–’90 1989

1800 1850 1900 1950 2000

Revolution and Napoleon:
Economic and social unrest
are catalysts for revolution.
A period of war followed
between Napoleonic France
and shifting alliances of other
European powers.
Concert of Europe:
A great-power–centric agree-
ment to achieve a balance of
power brought about general
acceptance of a practice of
restraint and not acting unilat-
erally in response to a crisis.
Competition reemerges:
Anti-liberalism and nationalism,
fueled by social inequality,
economic problems, and rising
pan-Germanic populism,
resulted in social upheaval
and territorial conflicts.
League of Nations:
After WWI, a period of order-
building occurred to create
a league that codified princi-
ples such as respect for
territorial integrity and politi-
cal independence.
Revisionist powers:
World order was undermined
by aggressive policies of re-
visionist powers; rearmament
emerged; economic crisis fuels
protectionism; rise of fascism
and anti-liberalism.
Multilateral institutions:
In the post-WWII era, build-
ing on the foundation of the
United Nations, the United
States led the creation of a
thick web of multilateral
institutions.

I M P L I C AT I O N S F O R C O M P E T I N G
E F F E C T I V E LY
• Countries that master the “fourth indus-
trial revolution”—artificial intelligence (AI),
advanced manufacturing, autonomous
and robotic systems, and other elements
of the emerging industrial age—will gain
significant advantages in both civilian and
military power.
• Information is the hub of competitive
advantage. Sustaining effective and
secure information networks and a
healthy information environment for poli-
tics and society is indispensable
to competitive success.
• In a more multipolar world order, being the
hub of coalitions of like-minded major and
middle powers will be a major advantage.
• One persistent aspect of the context is the
role of a deeply institutionalized interna-
tional order; countries that have dispropor-
tionate influence over its norms, rules, and
institutions will have an advantage.
• Existing political and social structures
face powerful challenges, partly because
they have failed significant proportions of
their populations; countries that respond
in ways that reaffirm the legitimacy of
their governing systems will gain relative
advantage.
• Fulfilling the goals of national security
policies now demands addressing climate
change, which poses accelerating threats
to all nations.
| 11
T H E E M E R G I N G S T R AT E G I C E N V I R O N M E N T: F I V E L E A D I N G T R E N D S
Our research identified five dominant trends shaping the emerging strategic environment for competition.
1 M U LT I P O L A R W O R L D S Y S T E M
A move away from a unipolar model toward a broader, more varied set of leading powers
GLOBAL POWER INDEX (GPI) HISTORY AND FORECAST Illustrative uncertainty range
Major powers
“Great Recession” CHINA
Dissolution of
USSR U.S.
INDIA
Middle powers
RUSSIA
J A PA N
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
SOURCE: Jonathan D. Moyer and Alanna Markle, Relative National Power (Power) Codebook, Frederick Pardee Center for
International Futures, University of Denver, July 2018.
NOTE: The GPI is an algorithmic assessment of power that includes a number of material power categories such as GDP, military
spending, population, trade, and research and development (R&D) spending.
2 CHALLENGES TO PREVAILING NEOLIBERAL MODEL 41 billion
Rise in inequality, globalization, socioeconomic ferment, and other The number of devices net-
OVERALL CONTEXT FOR THE COMPETITION
factors boost populist and nationalist dynamics worked into the “Internet of
Things” in 2025; projected by
3 International Data Corporation
FOURTH INDUSTRIAL REVOLUTION
in 2019
AI, robotics, biotech, renewable energy, advanced manufacturing,
and 5G networks establishing new industry with potential revolutionary
350%
effects on modern economies
increase in ransomware
attacks and 70% increase in
4 RISE OF VULNERABLE INFOSPHERES spear-phishing attacks over
Developed nations’ information environments increasingly susceptible one year in a 2018 survey of
to manipulation from various forms of cyber intrusions and attacks, public companies
efforts to shape public perception and economics
1–4 ft
NASA projection of rising
5 C L I M AT E C H A N G E A N D C R I S I S global sea levels by 2100,
Persistent effects from rising temperatures, environmental effects of threatening hundreds of
warming, and accompanying political debates coastal cities
12
|

M E A S U R E S of
NATIONAL P OW E R and

COMPETITIVENESS
Assessing the domestic determinants of competitive success
History is fairly clear on one critical aspect of strategic competitions: Major powers do well or poorly in such contests largely as a function of whether their national economies, societies,
and political systems are vibrant engines of competitive power.

I D E N T I F Y I N G T H E I N D I C AT O R S O F C O M P E T I T I V E S U C C E S S
We reviewed dozens of indicators (a mostly complete list is below) to assess the current state of the domestic determinants of competitive success. Our goal was to identify a subset that would
provide a more focused assessment of the state of the domestic characteristics of competitive advantage. We used a number of means of doing so that included classic economic theory;
empirically validated indicators in national power; a process of assessing overlap and mutual inclusion (some factors can serve as proxies for others); and comparison of indicator results to
determine outliers.

• GDP in PPP and market exchange rate (MER) terms
• GDP growth rates
• Per capita GDP
• Labor productivity
• Value added per worker
• Household spending growth; per capita consumption • Inequality across social groups
growth
• Levels of capital formation; capital-to-asset ratio; relation-
ship of fixed and gross capital formation and growth
• Domestic credit available to private sector
• National savings rates, as %/GDP
• Number, amounts of nonperforming loans
• Standing in key technology areas
• Total trade; levels of imports and exports; total %/GDP
• Total national wealth measures
• Government expenditure as %/GDP
• Levels of debt, public and private: gross external
• Net foreign assets, official reserves
• Merger and acquisition activity
• Natural resource imports, exports
• Foreign exchange reserves by currency
• Currency swaps, especially involving RMB
• Measures of human flight, brain drain
• Government spending as %/GDP
• National R&D investments; public, private; total and as
%/GDP
• Numbers of applications for patents, industrial design
patents, trademark applications
• Applications for triadic patents
• Numbers, capability of nuclear weapons
• Defense spending, as %/GDP and total • Threats to state security indexes
government spending
• Polling data on legitimacy of major social institutions
• Polling data on legitimacy of government and specific
components (head of state, legislatures)
• Measures of effectiveness of public policy, civil service,
public institutions
• Degree to which laws are respected and enforced
• Corruption measures
• Public opinion on sense of national belonging, local
belonging, social trust
• Educational participation
• Numbers of top-ranked universities
• Technological sophistication of exports
• Index of technological sophistication of
manufacturing sector
• State fragility indexes
• Competing national power indexes
• Measures of intergroup tensions
 | 13

I N S I G H T F U L I N D I CAT O R S
Our research suggested that a few
telling indicators provide the most
important insight into each of these
five categories:
A S S E S S I N G N AT I O N A L P O W E R A N D C O M P E T I T I V E N E S S : 5 L E A D I N G FA C T O R S
Based on this analysis, our research suggests a total of five factors as being especially important for assessing the
status of domestic national determinants of competitive success. The sections that follow survey evidence in these
five categories.

A O V E R A L L P R O D U C T I V E C A PA C I T Y
• GDP in PPP and MER terms In the pages that immediately follow, we focus first on national productive capacity. We explore different metrics
• GDP growth rates that reflect productive capacity, with a strong focus on measures of GDP. We examine other measures of relative
• Labor productivity economic standing, such as wealth and per capita GDP, and explore the potential value of a statistic representing
• Total trade; levels of imports and the logarithm of economic growth—something that emphasizes the importance of shifting growth rates and has
exports implications for relative economic power.

B A B I L I T Y T O D O M I N AT E F R O N T I E R T E C H N O L O G I E S
• Export technological sophistication
A second primary domestic determinant of competitive success is a country’s ability to develop, produce, and
• Standing in key technology areas
employ frontier technologies—in a sense, the technology and innovation index of its overall economy.
• Applications for triadic patents

C C A PA C I T Y T O G E N E R AT E S P E N D I N G P O W E R A N D D I S C R E T I O N A R Y R E S O U R C E S

• Domestic credit available to
private sector
• National savings rates, as % of GDP
• Levels of debt, public and private
The third domestic determinant of competitiveness is a government’s ability to generate discretionary resources
essential to investments in competitive actions. A country may have a very large GDP, but most of its national ex-
penditure may be captured by inflexible social programs, interest payments on accumulated debt, or other require-
ments that leave very little room for competitive policies or initiatives. Such discretionary spending is essential for
a country to be agile and responsive—to be able to direct significant and sudden resources toward new priorities.

N AT I O N A L P O W E R A N D C O M P E T I T I V E N E S S
N AT I O N A L P O W E R A N D C O M P E T I T I V E N E S S
D Q U A L I T Y O F N AT I O N A L I N S T I T U T I O N S
• Polling data on legitimacy of major The fourth domestic determinant of competitiveness is the quality of national institutions. The literature on growth,
social institutions
development, and national power identifies many factors as helping to account for outcomes in relative power and
• Corruption measures
competitive success, in both peace and war. Arguably the most consistent and widely applicable of these factors
• Polling data on legitimacy of
is the quality of national institutions and their ability to sustain the rule of law, effective property rights and transac-
government
tions, the efficient enforcement of policies and regulations, the efficient and effective application of resources,
• Degree to which laws are respected
and other qualities. Good institutions are the mirror image of the weak-rule-of-law, corrupt, kleptocratic situation
and enforced
found in many states unable to translate resources into effective domestic strength.

E M I L I TA RY R E S O U R C E S A N D CA PA B I L I T I E S
• Defense spending
The fifth domestic determinant of competitiveness is the effectiveness of military investment. It is difficult to
• Threats to state security indexes
• Numbers, capability of nuclear weapons
identify reliable and comparable numbers for overall defense spending or spending on particular capabilities.
14
| MEASURES OF NATIONAL POWER AND COMPETITIVENESS A B C D E

OVERALL P R O D U C T I V E
C A PA C I T Y
Productive capacity of an economy is the foundational competitive measure.
History and theory offer a clear and consistent message that a country’s basic economic productive output is the essential basis of its competitive strength—and the most common measure of
such output is GDP. Every measure of national power begins, and some end, with some sort of qualified measure of a country’s GDP. As we will see, that is not the end of the story: Some countries
do a far better job of generating effective national power from their overall economic strength. But GDP does provide a baseline for an analysis of the competition.

In the same way, policies to sustain and accelerate economic performance are the necessary starting point of any competitive strategy. The basic story of productive capacity over the past 30
years is straightforward: China has gained substantially on the relative position of the United States, whereas Russia has grown slowly but remained, in overall productivity terms, an afterthought
to the United States and China. Measured by purchasing power parity (PPP), China’s economy is already larger than the U.S. economy, and some projections suggest that, measured in market
exchange rate (MER) terms—a direct and equivalent, dollar-for-dollar comparison—it will overtake the United States sometime between the mid-2020s and mid-2030s. Still, even this narrative
must be substantially qualified by another trend, which is represented below by the “log” of GDP—a way of representing the simple fact that China’s economy may not overtake America’s in real
terms for some time, if ever.

REAL GDP PPP AND GDP MER U.S. CHINA RUSSIA LOG REAL GDP U.S. CHINA
(in trillions, 2010 USD) (log PPP, 2010 USD)
CN (PPP)
60 32
In GDP PPP and log real GDP, China
surpasses U.S.
31
50 CN (MER)
The “log” of GDP measures
In GDP MER, China compounding changes in the
30
projected to surpass rate of growth over time. Its
40 U.S. (PPP)
U.S. at a slower rate emphasis on the annualized
U. S. ( M E R ) 29 change in GDP tells an import-
ant story:
30
28 China’s growth rate has been
slowing (and indeed may
20 have been exaggerated for
27 some years).
RU (PPP)
10
26

0 25
1990 2000 2010 2020 2030 2040 2050 2060

E C O N O M I C P R O D U C T I V I T Y T R E N D S W E A V E A M O R E C O M P L E X S T O RY: THE TWO ECONOMIES ARE MOVING TOWARD A CONVERGENCE OF GROWTH RATES
China’s slowing growth rate is a natural process for a maturing developing economy. If the United States can generate growth in the range of 3%, the two economies are moving toward conver-
gence of growth rates rather than a perpetual Chinese advantage.

SOURCES: OECD, Economic Outlook, No. 103, 2018; World Bank, World Development Indicators; PwC, The World in 2050. Different sources offer somewhat different figures for each category. These trend lines also shift slightly
depending on which normalization figure is used, but the essential characterization of the trends remains consistent across sources.
 | 15

NOT A SIMPLISTIC STORY OF A “POWER TRANSITION”: C H I N A’ S L O O M I N G C H A L L E N G E S

China’s slowing growth rate is partly symptomatic of a larger and more complex reality. There are many reasons to believe that, CHINESE FOREIGN INVESTMENT | 2017–2022
(in billions USD)
over the coming decade, the fundamental narrative about China’s rise will change from an unqualified success story to a more
173.3
qualified, in some cases rocky, tale of an economy, society, and government facing multiple inherent weaknesses and challenges. Total
investment 119.7
abroad
98.4
China will join the United States as one of the world’s two dominant economies, may well eventually grow larger than the
U.S. economy even in MER terms, and will retain tremendous ability to generate power from its basic productive capacity. 41.7 48.9
But that process will become more difficult. We have already seen the first signs of this as Chinese outbound foreign invest- 15.5*

ment has slowed significantly in recent years, as depicted at right, in part due to the government issuing stricter metrics Change from
prior year –31% –18% –58% +17
for Chinese firms engaging in Belt and Road Initiative projects to reduce overseas debt and, in 2020, because of the effects
of COVID-19. Multiple data points we reviewed highlighted persistent U.S. relative strengths and emerging challenges to SOURCE: AEI/Heritage China Global Investment Tracker. * First six months.

Chinese economic growth.

U. S. CHINA RUSSIA C H I N A’ S D E M O G R A P H I C C R I S I S
The Chinese Communist Party’s strong efforts to control
Two areas of U.S. advantage—GDP per capita and total wealth—speak to the fact that Gross value added (GVA) per worker speaks population may have been too successful. The country now
the U.S. economy is vastly more advanced than China’s, a fact with implications for to the productive output of the economies. faces a stark demographic decline, with a total fertility rate
technological progress and other economic factors. (children per family) officially estimated at 1.7 but probably
closer to 0.9–1.1—far below the replacement rate of just
G D P P E R CA P I TA | 2019, 2022 TOTAL DOMESTIC WEALTH | 2020 VALUE ADDED PER WORKER | 2019 over 2. If this trajectory does not change, China’s popula-
(in thousands, current USD) (in trillions, current USD) (Industry, in thousands 2015 USD) tion could fall by two-thirds over the coming century.

126.3
76.0
C H I N A’ S P R O J E C T E D P O P U L AT I O N | 2020–2100
114.9
65.0 2020 2100

1.4 B I L L I O N | 400–480 M I L L I O N
The percentage of China’s population over the age of 65 is
74.8
projected to triple by 2050. A gradually ebbing, and aging,
population could have a number of strategic effects:

• significant fiscal implications in terms of reduced revenues,

high pension costs
• disruptive effects on the role of the extended family in Chinese
social life, including its role in providing a social safety net
(especially for people over 65)
27.4
14.1 12.5 23.6 • suppression of innovation and growth as fewer people feel
10.1 11.5
free to pursue creative, risky entrepreneurial efforts, given the
increased burden of caring for the elderly.
3.1

E C O N O M I C M U S C L E A N D P R O D U C T I V E CA PA C I T Y: C H I N A I S N OT R A C I N G PA S T T H E U N I T E D S TAT E S TO A P O S I T I O N O F U N Q U E S T I O N E D DOMINANCE
The better way to think about it—even as China’s economy continues to rise—is of two countries converging into a bipolar economic balance. It is the emergence of two peer competitors, not a
simple and unqualified “power transition.”

SOURCES: IMF, World Economic Outlook Database, October 2018; Credit Suisse, Global Wealth Report 2018, October 2018; UN, World Population Prospects dataset, 2019; AEI, Global investment Tracker dataset, July 2019. Chinese foreign investment
data from Derek Scissors, “China’s Coming Global Investment Recovery: How Far Will It Go?” American Enterprise Institute, January 2021; UN, World Population Prospects dataset, 2022.
16
| MEASURES OF NATIONAL POWER AND COMPETITIVENESS A B C D E

ABILITY TO DOMINATE
FRONTIER TECHNOLOG I E S
A country’s ability to develop, produce, and employ frontier technology is a second determinant of
competitive success.
Historical evidence on rivalries among major powers points to the critical role of advanced technology: Countries that dominate the leading industries of the period, which become global leaders
in innovation and technological development and application, tend to gain military and geopolitical superiority. China has sought not only economic productivity but also technological parity
with— and eventual superiority over—the United States for decades. Advances in science and technology have been part of the Chinese strategy since Mao; in the past 20 years, Beijing has
directed immense resources into research and development (R&D), high-tech industries, purchase and theft of intellectual property and established technologies, and other avenues to high-tech
progress.

The results have been impressive: As depicted below and at the top of the next page, these efforts have generated measurable outputs in R&D spending, patent applications, research output,
and competitive technology firms.

China’s output of patent applica-

C H I N A I S C AT C H I N G U P T O T H E U N I T E D S TAT E S I N T E R M S O F I N R & D S P E N D I N G A N D PAT E N T S tions has grown exponentially to
over 1,245,700 in 2017.

R&D SPENDING | % OF GDP, 1996–2017 U. S. CHINA RUSSIA U.S. CHINA RUSSIA PATENT APPLICATIONS | PER RESIDENT, 2000–2017

3.5%

3.45%
3.0%

Total numbers of patent appli-

2.5%
cations can reflect government
demands for patent filings
2.14%
more than actual technological Resident patent applications for China
2.0% advancement. But they do surpasses the U.S. with 229,096 on record
signal general societal patterns
and represent one imperfect
measure of a society’s innova-
1.5%
tive dynamism.
293,904

1.0% 1.09%

0.5%

22,777
0.0%
2000 2005 2010 2015 2020

SOURCES: OECD (2022), Research and development (R&D) — gross domestic spending on R&D (indicator), accessed on 12 August 2022; China Power Team, “Is China a Global Leader in Research and Development?” Center for Strategic and
International Studies, January 28, 2021; and OECD data on triadic patent families.
 | 17

O T H E R M E A S U R E S I N D I C AT E T R E M E N D O U S C H I N E S E P R O G R E S S I N H I G H T E C H N O L O G Y U. S. CHINA

China increased its output of science and technology research The United States and China now have roughly equal numbers of China continues to dominate in the manufacturing world, with
articles by 381% over a 13-year period, surpassing the United the top global internet companies, a significant change from two high-tech exports experiencing a steady rise, while the United
States. decades ago. States has lagged.

S C I E N T I F I C A N D T E C H J O U R N A L A RT I C L E S | 2003, 2016 TOP 20 GLOBAL INTERNET GIANTS | 2000, 2018 H I G H - T E C H N O L O G Y E X P O RT S | 2010, 2020
(in billions USD)

2016 2000 U.S. = 13 | CN = 3 2018 U.S. = 11 | CN = 9

426,165 2020
2003
408,985
2010 757. 7
3 2 1 , 76 5
474 . 3

86,621 166.0 141.5

B Y OT H E R M E A S U R E S , C H I N A’ S R I S E I S L E S S S I G N I F I CA N T: T H E U N I T E D S TAT E S C O N T I N U E S TO D O M I N AT E K E Y A S P E C T S O F T H E T E C H C O M P E T I T I O N
China still lags the United States in several important technological areas. The statistics on its R&D advances are almost certainly Share of top 100 global universities:
inflated: When the Chinese government put out the directive to researchers and scientists to produce patents, they did so—but
most do not represent truly competitive technologies. China’s advances in areas like AI, moreover, still trail in critical measures of 41% U.S. | 2% C H I N A | 0% RUSSIA
systemic innovation and dynamism, which China’s system is less able to deliver. SOURCE: Times Higher Education World University Rankings 2019.

A better measure of research output is “triadic patents,” which are filed Even given its growing sophistication, China’s economy While China is a burgeoning technology powerhouse, it still depends
simultaneously in the United States, the EU, and Japan, signaling an inno- still has a relatively much smaller number of scientific substantially on imports for key components and resources. Though
vation that is internationally competitive. and technological researchers—though the immense Beijing is pursuing multiple avenues to greater self-sufficiency, it still
size of its total population helps make up the difference. depends on imports of such critical components as computer chips.

T R I A D I C PAT E N T A P P L I CAT I O N S | 2000, 2019 E M P L OY E D R E S E A R C H E R S | 2000, 2017 CHINA’S TECH SECTOR DEPENDS ON IMPORTS | 2019
(in thousands) (per one thousand employed workers)

15.63 7.08 SPENT ON IMPORTS OF SEMICONDUCTORS

2000 2000 $300–350 billion
0.08 0.96
% OF DESKTOP COMPUTING USING MICROSOFT WINDOWS
88%
12.88 8.93
2019 2017 % OF H I G H - E N D M E D I C A L D E V I C E S I M P O R T E D
5.60 2.24 80%

OVERALL STORY: CHINA IS RISING TO THE STATUS OF A GLOBAL PEER OF THE UNITED STATES, THOUGH NOT ON A TRAJECTORY TO RACE PAST THE UNITED STATES AND ACHIEVE GLOBAL DOMINANCE
The trend here is similar to that for productive capacity in general. From the standpoint of the technological competition, potential U.S. policy responses are fairly clear: reversing recent budget cuts in basic research and
boosting funding for federal R&D and academic research, both basic and applied; additional scholarships and other programs to support the development of new generations of researchers; efforts to build technology
ecosystems among friends and allies; prioritized identification of key capabilities of industries and places where the involvement of Chinese firms must be selectively curtailed; and intensified efforts to interdict Chinese
technology and intellectual property theft.

SOURCES: IMF, World Economic Outlook; Credit Suisse, Global Wealth Report 2018; UN, World Population Prospects; UN Comtrade database; Times Higher Education, World University Rankings, 2019; Kleiner Perkins, Internet Trends Report, 2018;
OECD, Science, Technology and R&D Statistics: Main Science and Technology Indicators, dataset; OECD, Patent Statistics: Patents by Main Technology and by International Patent Classification, dataset; “Semiconductors and the U.S.-China Innovation
Race,” Foreign Policy, February 16, 2021; Triadic patent families, OECD; Nina Xiang, “Foreign Dependence the Achilles Heel in China’s Giant Tech Sector,” Nikkei Asia, January 21, 2021.
18
| MEASURES OF NATIONAL POWER AND COMPETITIVENESS A B C D E

CAPACITY TO GENERATE
DISCRETIONARY RESOURCES
A third domestic competitive determinant is a government’s ability to generate discretionary resources essential
to making investments in competitive action.

THE CONSTRAINTS ON U.S. FEDERAL NON-DEFENSE SPENDING

One of the more remarkable changes in the U.S. fiscal position has come through the effects of historically low interest rates. Even with the enormous surge in U.S. borrowing, before the recent rise
in inflation and interest rates, net interest outlays were projected to decline from 1.6% of GDP in 2020 to 1.1% of GDP (less than $300 billion per year) in 2024–2025, before rising again to a near-term
projected peak of 2.2% (or $664 billion) in 2030—still short of earlier forecasts that saw them rising well above 3% of GDP. Nonetheless, while a once-feared catastrophic effect may be some years off,
these projections still reflect immense, and rising, sums that constrain U.S. fiscal flexibility and strategic agility. The latest CBO projections suggest that total federal debt will hit 185% of GDP by 2051.
Absent changes to current law, interest payments on the federal debt are projected to average $808 billion per year between FY23 and FY32, and to reach 7.2% of GDP by 2052—which, as a proportion
of GDP, would be more than double what the nation now spends on defense.

U . S . T OTA L D E F I C I T A N D N E T I N T E R E S T | P E R C E N TA G E O F G D P PROJECTED U.S. INTEREST SPENDING | 2021–2032

(in billions USD)
P R I M A RY D E F I C I T N E T I N T E R E S T O U T L AYS
PROJECTED
1,194
10 1,099
PROJECTED 1,007

925
5
If interest rates were to 842
0 rise even a few percent-
756
age points, this would
add $ trillions to U.S. 681
–5
debt obligations over 604
TOTA L D E F I C I T O R S U R P L U S the next decade and the
–10 525
fiscal situation would
darken very rapidly. And 442
the longer-term progno- 399
–15
sis after 2030 remains 352
uncertain.
–20

–25

–30
1942 1952 1962 1972 1982 1992 2002 2012 2022 2032 2042 2052 2021 2032

SOURCES: Total deficit, primary deficit, and net interest from Congressional Budget Office, “The 2022 Long-Term Budget Outlook,” July, 2022. Projected interest spending estimates based on Congressional Budget Office, “The Budget and
Economic Outlook, 2022–2032,” May 2022.
 | 19

R U S S I A A N D C H I N A A L S O FA C E S U B S TA N T I A L C H A L L E N G E S
Russia’s debt-to-GDP ratio is lower but so are its sources of national income. Constraints on government resources from the collapse of oil prices, sanctions, and other difficulties forced a defense
spending cut in 2017. China’s own growing debt problem similarly forced cutbacks in foreign direct investment.

THE FISCAL CHALLENGES OF AN AGING WORKFORCE | R U S S I A’ S E C O N O M I C C H A L L E N G E |

China is aging more quickly than any developing country ever has, leading to Several factors are contributing to a slowing economy. Corruption and national control of key industries—state-owned
a decline of the workforce. Various sources offer different estimates of China’s enterprises (SOEs)—prevent efficient investment and international competition needed to drive growth and the proportion
plummeting worker-to-retiree ratio and the possible deficit in current pension of small and medium-sized enterprises (SMEs) in the economy as compared to EU countries.
programs:

Worker-retiree ratio Up to $11 trillion yuan 8–10+% economic contraction SOEs share of GDP 22% share of GDP

~33%

6.5 in 2000 Deficit in pension programs IMF forecast shows Post-Ukraine under sanctions Estimate, IMF report 2016 Proportion of SMEs in the
1.5–2.2 by 2050 (US $1.64 trillion) contracting through 2023; then growing ≤1% Russian economy, compared
through 2027 to ~60% in EU

C H I N A’ S D E B T G R O W I N G A S E C O N O M Y S L O W S | 2014–2020 R U S S I A’ S P R O J E C T E D P O P U L AT I O N D E C L I N E | 2020–2050

Various sources differ in their estimates of the size of Chinese debt, but the trend Long-term demographic collapse due to a low birthrate will begin to EC ONOMI C EFFEC TS OF
lines and general magnitude of the problem are consistent in all sources: China’s total shrink Russia’s workforce by almost a million people per year; one UKRAINE WAR AND SANCTIONS
public and private debt has reached new highs compared with the size of its econo- estimate projects the population could fall from ~145.9 million to 135.8 million
ON R US S I AN EC ONOMY
my, and has the prospect of becoming a real danger to future growth and economic by 2050.
stability.
• Various estimates suggest
Russian economy will contract
C H I N A’ S N O N - F I N A N C I A L D E B T- T O - G D P R AT I O (in millions of people) 10% or more in 2022
(in percent) • Imports have collapsed by over
145.9 50%, car sales down 75%
280
135.8
• Technology restrictions already
having severe effect on
240
manufacturing

• Over 1,000 international firms,

with over $600 billion worth of

180 investments in Russia, have

At the end of 2020,
China’s stated fiscal curtailed activities, wiping
policy indicated a more away three decades of invest-
measured approach to ment progress
120
stimulus

SOURCE: Yale School of Man-
agement, “Business Retreats
60 and Sanctions Are Crippling the
Russian Economy,” July 2022.

0
2014 2015 2016 2017 2018 2019 2020 2020 2030 2040 2050

SOURCES: UN World Population Prospects; Frank Tang, “China’s State Pension Fund to Run Dry by 2035,” South China Morning Post, April 12, 2019 (reporting Chinese Academy of Social Science findings); World bank forecasts and calculations; “World
Bank Cuts Russian Economic Growth Forecast to 1% in 2019,” Reuters, October 9, 2019; “China Eyes Economic Goals for Next Year as Debt Levels Soar,” Bloomberg, December 15, 2020; World Bank, Russia Economic Report, No. 42, December 2019;
Russian SME percentage from OECD and World Bank analyses; Russian GDP projections from IMF World Economic Database, accessed August 2022.
20
| MEASURES OF NATIONAL POWER AND COMPETITIVENESS A B C D E

Q UA LI T Y O F
NATIONAL INSTITUTIONS
A fourth measure of domestic competitive determinants is the quality of national institutions. 
The literature on growth, development, and national power identifies many factors as accounting for outcomes in relative power and competitive success, in both peace and war. Arguably the most
consistent and widely applicable of these factors is the quality of national institutions and their ability to sustain the rule of law, effective property rights and transactions, the efficient enforcement
of policies and regulations, the efficient and effective application of resources, and other qualities. Good institutions are the mirror image of the weak-rule-of-law, corrupt, kleptocratic situation
found in many states unable to translate resources into effective national power and influence.

The charts in this section represent a number of well-established indicators—both objective indexes and public opinion polling—used to assess the quality of national institutions. In these mea-
sures, higher scores reflect better-quality governance. As these charts indicate, in the competition with Russia and China, the United States has traditionally held a significant advantage across
many metrics—though recent trends in U.S. polarization and political gridlock threaten to weaken this advantage.

P O L I T I C A L S TA B I L I T Y A N D A B S E N C E O F V I O L E N C E / T E R R O R I S M I N D E X | CONTROL OF CORRUPTION | RULE OF LAW |

U. S. CHINA RUSSIA U.S. CHINA RUSSIA U.S. CHINA RUSSIA

100
2 Tr u m p

80

60
“Rule by Law”
Xi Jinping CCP expands control
over society
0
40
Putin

20
−1

0
1996 2002 2006 2010 2012 2014 2016 2018 2000 2005 2010 2015 2018

This is an index of multiple objective measures of violence, risk ratings, and perceptual This is a World Bank Governance Indicator composed of multiple perceptual and statistical measures of
scores for political stability. corruption. Rule of law is the extent to which laws are respected and enforced.

NOTE: CCP = Chinese Communist Party.

SOURCE: Data on state fragility, control of corruption, and rule of law from World Bank, Worldwide Governance Indicators, 2019.
 | 21

U . S . A N D D E M O C R AT I C A D VA N TA G E S I N I N S T I T U T I O N S R E M A I N S I G N I F I C A N T — T H E Q U E S T I O N I S W H E T H E R T H E Y A R E D U R A B L E

The United States continues to enjoy a significant lead over its primary rivals in most measures of institutional quality, which are likely to play a central role in long-term success.

The two indexes below are widely used to combine several variables into an overall portrait of national institutional health and effectiveness. Despite China’s rise, its governance institutions
remain less effective, reliable, transparent, and globally trusted than those of the United States. Russia fares even worse, and is unlikely to improve following the widespread crackdown on
domestic dissent and civil society that has accompanied its 2022 invasion of Ukraine.

GLOBAL COMPETITIVENESS INDEX | INSTITUTION RANKING 2018

(Country rank out of 140)

RANK COUNTRY VA L U E ( 0 – 1 0 0 )
1 N E W Z E A L A N D 8 1. 6
2 F I N L A N D 8 1. 0
3 S I N G A P O R E 8 0.7
4 N E T H E R L A N D S 7 7. 9
5 S W I T Z E R L A N D 7 7.1
6 HONG KONG 76.9
7 U N I T ED K I N G DO M 76.8
8 N O R WAY 76.7
9 S W ED E N 76.0
10 D E N M A R K 75.9
11 C A N A D A 75.5
12 L U X E M B O U R G 75.2
13 U N I T E D S TAT E S 74 . 6
14 I C E L A N D 74 . 3
15 A U S T R A L I A 73.6
16 G E R M A N Y 73.5
17 I R E L A N D 7 3 .1
18 A U S T R I A 72.7
19 U N I T E D A R A B E M I R AT E S 7 1. 8
2 0 J A PA N 7 1.1
23 F R A N C E 69.5
24 M A L AY S I A 6 8.7
2 5 TA I WA N 68.5
2 6 I S R A E L 66.3
27 S O U T H KO R E A 65.4
28 S PA I N 64.5
GOVERNMENT EFFECTIVENESS INDEX | WORLDWIDE GOVERNANCE INDICATOR, 1996–2020
47 I N D I A 5 7. 9
4 8 I N DO N E S I A 5 7. 9
U.S. CHINA RUSSIA
4 9 L AT V I A 5 7. 9
5 0 J O R DA N 5 7. 7 2020 percentile rank
51 N A M I B I A 5 7. 2 U. S.
52 S E YC H E L L E S 5 7.1 2 87.0%
5 3 P O L A N D 5 7.1
5 4 M O ROC C O 56.6
5 5 S LOVA K R E P U B L I C 56.4
5 6 I TA LY 56.4 1.5
57 K U WA I T 56.0
5 8 A Z E R B A I J A N 55.8
59 G H A N A 5 5.7
1 CHINA
6 0 T H A I L A N D 5 5 .1 72.6%
6 1 K A Z A K H S TA N 54.9 World Average
62 B OT S WA N A 5 4.7
6 3 M O N T E N EG RO 5 4.7 0.5
RUSSIA
6 4 K E N YA 54.6
54.8%
6 5 CHIN A 54.6
6 6 H U N G A RY 54.2 0
67 A R M E N I A 54.0
6 8 A L B A N I A 53.9
6 9 S O U T H A F R I C A 53.8
−0.5
70 B U LG A R I A 53.6
71 T U R K E Y 52.9
7 2 R U S S I A N F E D E R AT I O N 52 .7 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

The index reflects “security, property rights, social capital, checks and balances, transpar- The index reflects “perceptions of the quality of public services, the quality of the civil service and the degree of
ency and ethics, public-sector performance, future orientation of government, and corporate its independence from political pressures, the quality of policy formulation and implementation, and the credibili-
governance.” ty of the government’s commitment to such policies.”

SOURCES: World Economic Forum, Global Competitiveness Index 4.0 (2018 rankings, first-pillar Institutions); World Bank, GovData 360, Government Effectiveness Value; World Bank, World Governance Indicators.
22
| MEASURES OF NATIONAL POWER AND COMPETITIVENESS A B C D EE

M I L I TA RY R E S O U R C E S
A N D CAPABILITIES
The United States is and will remain in a strong competitive position on many aspects of the military balance.
It is difficult to determine clear and comparable numbers for overall defense spending or spending in particular categories, such as procurement. Significant debates exist over the actu-
al size of Russian or Chinese military spending. It may be inaccurate to compare U.S., Chinese, and Russian defense budgets in gross terms because so much of what China and Russia
procure—especially salaries for troops—is bought locally and thus subject to adjustments for purchasing power parity (PPP). The figure below applies a PPP estimator to the three countries’ defense
budgets; looked at through this lens, China and Russia’s defense resources together roughly equal those of the United States.

M I L I TA R Y S P E N D I N G

NOMINAL VS. ADJUSTED FOR PPP SPENDING | 2021 U. S. CHINA RUSSIA

(in billions USD)
When you compare
NOMINAL ADJUSTED defense spending
in actual purchasing
EXPENDITURE AS % OF GDP | 2021 % OF GLOBAL SPENDING | 2021
801 801 power, the U.S.
160-180
budget isn’t as im-
posing and is nearly 37.9%
equal to China and
Russia combined.

400–600 3.5% 1.7% 4.1%

AS % OF GOVERNMENT SPENDING | 2020

13.9%
3.1%

293
China's military spending has
increased every year since 1994.
7.9% 4.7% 11.4%

* SIPRI Milex; Michael Kofman and Richard Connolly, “Why Russian Military Expenditure Is Much Higher Than Commonly Understood (As Is
China’s),” War on the Rocks, December 16, 2019; Peter Robertson, “Debating Defence Budgets: Why Military Purchasing Power Parity Matters,”
65.9 VoxEU.com, October 9, 2021. The large ranges for the PPP figures reflect uncertainties and disagreements about the best way to calculate them.

DESPITE THE UNITED STATES REMAINING IN A STRONG COMPETITIVE POSITION IN TERMS OF THE MILITARY BALANCE, OUR ANALYSIS HIGHLIGHTS TWO AREAS OF SIGNIFICANT CONCERN:
1. the U.S. fiscal situation, which could impose severe constraints on U.S. military resources in the future
2. the effort by Russia and China to neutralize U.S. combined arms concepts of operations with asymmetric effects in specific areas of vulnerability, including electronic warfare, information warfare,
cyber, and space.

SOURCES: Figures on military spending from the Stockholm Peace Research Institute and the International Institute for Strategic Studies.
 | 23

P E R S P E C T I V E S O N T H E E M E R G I N G M I L I TA R Y B A L A N C E : T H R E E K E Y I S S U E S T H AT W I L L H E L P S H A P E M I L I TA R Y A D VA N TA G E S O V E R T I M E

1. DECISIVE TECHNOLOGIES 2 . N E W W AY S O F W A R 3 . 2 1 s t C E N T U R Y O P E R AT I O N A L C O N C E P T S

Given overall U.S. military superiority, U.S. rivals have been
seeking various forms of silver bullets to neutralize U.S.
advantages—a specific technology, or basket of them, that
can paralyze an enemy, especially in the first days of a war.
Russia and China have invested in various forms of infor-
mation warfare with such a goal, most notably the “system
destruction” and “informatized warfare” concepts being
developed by China and summarized below. Should they
succeed, these capabilities would have effects on the over-
all military balance well beyond the shifting spending and
investment totals outlined on page 24. A leading goal for
U.S. defense policy must be to build resilience against such
information system–focused attacks.
This is the most likely area of military vulnerability for the
United States.
The character of warfare may be in the process of a signifi-
cant transformation, with increasing emphasis on information
attacks, unmanned systems (including swarming concepts),
and artificial intelligence-driven decisionmaking. Whether or
not a comprehensive transformation occurs, such capabilities
will play an increasingly central role in warfare in the coming
decades. Russia and China are both making significant invest-
ments in many of these categories with an eye to leapfrogging
U.S. military dominance—transcending the superiority of current-
generation U.S. military systems and operating concepts with
radically new ways of fighting. If the United States does not keep
pace, it risks seeing its military superiority erode in the transition
to these new ways of fighting.
Proliferated unmanned systems—including swarming drones—
could pose significant threats to existing military systems.
Typically, nations do not achieve military superiority through
advances in individual technologies. They do so by master-
ing some integrated military approach or operational
concept, like the German Blitzkrieg or the U.S. system-
of-systems concept of precision-guided warfare, that draws
together multiple technologies into an overall campaign
design that creates a decisive advantage over other mili-
taries. Much current focus of the military competition is on
the net balance in specific technology areas or combat
systems. Ultimately, however, their effect will be filtered
through operational concepts; an emphasis on conceptual
thinking demands as much emphasis as military systems.
New operational concepts—During WWII the German
army had developed an innovative doctrine to return
mobility to warfare, to outman and outgun the enemy

“ I N F O R M AT I O N W A R F A R E ” SWARMING DRONES GERMAN BLITZKRIEG “LIGHTNING WAR”

ADVERSARIES WILL LOOK TO DISRUPT THE U.S. “SYSTEM OF SYSTEMS” A D VA N C E D D I S I N F O R M AT I O N T E C H N I Q U E S —Techniques that create S YS T E M - O F - S YS T E M S C O N C E P T —During Operation Desert
by fracturing and blinding the collection, exchange, and analysis radical doubt about the validity of information about events Storm in 1991, the United States employed an integrated
of information using a mix of multi-domain approach to devastating effect.
“ V I RT U A L S O C I E TA L WA R FA R E ” —Comprehensive attacks on an
• general cyber capabilities enemy’s domestic information networks—its Internet of Things, F U T U R E C O N C E P T S —Most operational concepts being developed
• electronic warfare critical infrastructure, communications, and algorithmic decision- today share many of the same essential principles: the holistic
• disinformation and perception manipulation techniques making processes—to paralyze its society and military respon- integration of systems in many domains, dispersal and conceal-
• attacks on U.S. space-based surveillance and information siveness ment, a dominant role for information attack, and a growing
transmission capabilities (including GPS location systems). role for unmanned systems.

MASTERING THESE EMERGING STRATEGIC AND OPERATIONAL CONCEPTS, AND SHIFTING INVESTMENTS TO ACQUIRE THE NEEDED SYSTEMS, WILL BE A CRITICAL MEASURE OF COMPETITIVE ADVANTAGE
All the major trend lines today—Russia’s “New Generation Warfare,” U.S. “multi-domain operations,” China’s “informatized warfare”—speak to increasingly holistic approaches to conflict that achieve decisive effect by
attacking a comprehensive set of military and non-military targets. New technologies are providing an ability to reach into enemy homelands with relative impunity. Given its high societal and military dependence on
advanced information networks and its lack of recent investment in domestic informational resilience, the United States may be especially vulnerable to such forms of aggression.

NOTE: References for this analysis are included in the Bibliographic Note.
22 4
|

M E A S U R E S of
INTERNATIONAL
POSIT I ON and I NFLUENCE
Assessing the degree to which competitors are gaining or losing relative influence in the international system
If domestic measures of national strength and energy are one crucial component of understanding any strategic competition, international measures of position and influence tell the
other half of that critical story—the way the competitors’ national capabilities and strategies are playing out in measures of relative competitive standing. This section reviews four key
categories of such measures, listed on the following page, to offer a sense of what areas are most critical to competitive success and where the competition stands today. This section
focuses almost exclusively on the U.S.-China competition; in terms of the vast majority of these measures, Russia is simply not a major international player. The data tell a consistent
story: China is a global economic powerhouse and is making headway in discrete channels of influence—but U.S. standing across all these measures still significantly outpaces both
China and Russia.

I D E N T I F Y I N G T H E I N D I CAT O R S O F C O M P E T I T I V E S U C C E S S

In this component of the study we reviewed dozens of indicators of the current and prospective international standing of the United States, China, and Russia.

• GDP in PPP and MER terms • Private corporate investment patterns, totals;
• Imports and exports; total percentage of GDP overseas investments, total value of transactions
• Exports to and imports from China as proportion of national totals in Asia • Industrial composition of investments
• Natural resource imports, exports • Regional and country composition in investments
• Foreign exchange reserves by currency • Greenfield investments
• Currency swaps, especially involving Chinese RMB • Public favorability ratings of key actors and institutions: U.S., Russia, China, EU, UN, NATO
• Participation in international institutions • Beliefs in Asia about relationship with China, partnership or rivalry
• Participation in free trade agreements • Perceptions of threat of Chinese military power
• UN voting patterns • Specific investment total, pattern of deals identified by China as part of Belt and Road Initiative
• Public statements and official positions of governments on key policy issues • Foreign aid programs, trends
• Foreign direct investment (FDI) inflows, outflows • Relative military resources of U.S., Russian, Chinese friends and allies
• FDI stocks (inbound and outbound) • Sources of competitive advantage in regional military contingencies
 | 25

A S S E S S I N G I N T E R N AT I O N A L P O S I T I O N A N D I N F L U E N C E : 4 L E A D I N G C AT E G O R I E S
Our historical research, evidence from current Chinese strategies and investments, and assessment of the effect of
various competitive behavior suggest that four categories of international position and influence will be especially
critical to determining relative success in the competition. These are listed below, along with several specific, measurable
indicators that are especially useful to assess that category.

A ECONOMIC POSTURE AND ENGAGEMENT

This category refers to relative competitive standing in key economic categories, such as proportion of national trade,
foreign direct investment (FDI), and economic aid.

B A L I G N M E N T O F K E Y A L L I E S A N D PA R T N E R S
A second primary international determinant of competitive success is the degree to which a major power enjoys the
active or tacit support and geopolitical affiliation of other countries. This category includes various indexes of align-
ment developed for the study.

C I D E O L O G I C A L A N D PA R A D I G M AT I C I N F L U E N C E
The third international determinant of competition is the degree to which a major power exercises predominant

I N T E R N AT I O N A L P O S I T I O N A N D I N F L U E N C E
influence over the ideas, rules, norms, and institutions that govern a prevailing paradigm. This category includes such
measures as public attitudes toward major powers, role in international institutions, and an index of ideological affinity.

D M I L I TA R Y E N G A G E M E N T A N D P O S T U R E
The fourth major category of competitive standing internationally is the global and regional military posture and de-
gree of military engagement of the major powers. This includes such measures as basing, access agreements, military
exercises, and training missions.
26
| MEASURES OF INTERNATIONAL POSITION AND INFLUENCE A
A B C D

ECONOMIC POSTURE
AND E N G A G E M E N T
The first category of international position and influence measures a country’s ability to generate international power
through trade and regional financial interdependencies.
One possible source of power for China is the creation of powerful trade and financial dependencies throughout the Indo-Pacific region. Countries heavily dependent on China as an export market, and
Chinese imports as part of production chains, are already making clear that they are reluctant to openly challenge Beijing on some geopolitical issues. Indicators such as the relative importance of trade
with China to a country’s economy and incoming and outgoing FDI can provide a sense of the trends in regional economic interdependence.

C H I N A’ S R I S E A S A G L O B A L T R A D I N G P O W E R H O U S E

C H I N A’ S G L O B A L T R A D E B A L A N C E | 1995–2017 E X P O RT S IMPORTS TRADE SURPLUS % OF GLOBAL TRADE | TOP 3 TRADERS IN 2017

These figures are from prior to the COVID-19 pandemic and its associated trade effects, and also before the range of U.S. trade actions against China. Only 3% in 1995
Both will end up altering the profile of U.S.-China. trade and China’s trade globally, but it is not yet clear how much.
#1 CHINA
Exports to U.S.
12.4%
$2T $430B
#2 U.S.
11.9%
In 1995, China‘s global
trade surplus totaled #3 GERMANY
$17B. By 2017, the surplus $2.31T
7.9%
1T increased to $420B.
Exports to U.S. SOURCE: UN Comtrade.
$25B

0
R EG I O N A L C O M P R EH EN S I VE EC O N. PA RT N ER S H I P (RCEP) |
30%
Imports from U.S. Although the 2020 China-led trade
$16B bloc excludes the United States
$1.85T and India, RCEP represents about
1T RCEP
30 percent of world output and
population, including key Asia-
Pacific countries (Japan, South
Imports from U.S.
$150B Korea, and Australia).
2T
1995 2000 2005 2010 2015 2017

F O R T U N E 5 0 0 C O M PA N I E S | T O TA L R E V E N U E O F U . S . A N D C H I N E S E F O R T U N E 5 0 0 C O M P A N I E S , 2 0 0 9 A N D 2 019 NUMBER OF TOP 100 GLOBAL COMPANIES |

36 U.S. | 23 C H I N A | 3 R U S S I A
Today, Chinese companies make (in trillions USD)
the Fortune 500 list 119 times with a 2019
combined revenue of $7.9T, almost 7.5T 9.41T
one quarter of the $32.7T in revenue
generated by all 500 companies.
2009
1.7T
2019
7.9T 2009 29 U.S. | 5 C H I N A | 2 R U S S I A
SOURCE: Fortune Global 500.
 | 27

E C O N O M I C E N G A G E M E N T: T R A D E A N D F I N A N C I A L I N T E R D E P E N D E N C Y
One measure of relative dependence on China is a snapshot of a country’s total trade portfolio, to see where China sits and what countries make up L E S S O N S O F T H E D ATA
the balance—and in particular exports, which are closely tied to countries’ GDP. Exports to China are a critical component of most countries’ export
portfolio—but China’s influence is balanced by the role of the United States, Indo-Pacific countries, and other states. No 1.
China has become the leading economic
T OTA L T R A D E W I T H C H I N A | TOP 15 BY % OF COUNTRY GDP 2010 2017 S E L E C T C O U N T RY E X P O RT PR O F I L E S | 2017
relationship for all major countries in
1. Vietnam 54.5% U. S. CHINA VN, MY, KR, ID OTHER INDO-PACIFIC
Asia—and a significant economic partner
2. Malaysia (in % of 2017 total)
for many countries outside the region. This
3. Cambodia fact has significant implications for the
16 19
4. Singapore competition: Few states in Asia are likely
43 to be willing to place these economic
5. Burma 27
–0.6% in 2017
22 10 ties at risk with steps in peacetime
6. South Korea
viewed as provocative by Beijing.
7. Laos
1919 44
44
8. Thailand
No 2.
9. Philippines VIETNAM M A L AY S I A
China has become a dominant provider
10. Australia 32 15 of financing for major infrastructure
11. New Zealand projects, which is a leading focus of the
30 Belt and Road Initiative and an area where
12. Pakistan 33 11
13. Bangladesh 12 private investors are not active.

14. Indonesia
23 44 No 3.
15. Japan
However, even countries that are
0 10 20 30 40 50 60 SOUTH KOREA INDONESIA
heavily dependent on China for trade
CHINESE OVERSEAS LENDING | 2000–2017 have diversified trading relationships,
TOTAL DEBT TO CHINA D E B T O W E D TO C H I N A CHINA’S LENDING BOOM and China still accounts for a relatively low
(in billions USD) (debt owed as a % of GDP) percentage of incoming FDI. Economic
Starting in about 2006–2007, China’s overseas lending
400 40 dependence on China has leveled off in
began a steady and dramatic rise—but there are limits
most cases; it is not continuing a perma-
to this trend. Only a handful of developing countries
nent upward trend. In addition, China’s
KH have extremely large debt (20% or more of GDP) owed
300 30 own economic challenges have led to
LA to China; many (Brazil, Egypt, India, Indonesia, Malaysia,
significant dips in outbound FDI over the
Mexico, Nigeria, South Africa and others) owe less than
past several years.
AO 2% of GDP. Some countries that owe much more have
200 20 seen their debt totals decline as a percentage of GDP
No 4.
since 2014–2015. Nonetheless, China has attained a
ET China’s economic statecraft is also
leading position in global finance and holds debt of
KE typically less coordinated and tightly
100 10
10% or more of GDP from a number of strategically
LK focused on achieving diplomatic
important developing nations, including Ethiopia, the
gains than generally assumed. China’s
VN Maldives, Mozambique, Niger, Samoa, and Vanuatu.
investments are often driven by
0 0 Cambodia (KH), Laos (LA), Angola (AO), Ethiopia (ET), Kenya (KE), company profit-seeking as much as
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sri Lanka (LK), Vietnam (VN)
strategic factors.
SOURCES: Chinese FDI from World Bank, World Development Indicators. Data on Chinese overseas lending from Sebastian Horn, Carmen M. Reinhart, and Christoph Trebesch, China’s Overseas
Lending, National Bureau of Economic Research, Working Paper No. 26050, July 2019, and Boston University Global Development Policy Center, China’s Overseas Development Finance database.
28
| MEASURES OF INTERNATIONAL POSITION AND INFLUENCE A
A B C D

A L I G N M E N T A N D K EY
A L L I E S A N D PA R T N E R S
The second category of international position and influence deals with the overall alignment—in terms of alliances,
partnerships, shared interests, and other measures of geopolitical orientation—of world politics.
Nations with more powerful and reliable groups of friends, allies, and partners have historically enjoyed tremendous competitive advantages. This factor has arguably been the leading U.S. competitive
advantage since 1945, and especially since 1989: The United States has been aligned on the most important security issues with countries comprising the dominant share of world GDP and military
power. Whether this alignment remains favorable will be a critical determinant of the emerging competition.

M E A S U R E S O F C O L L E C T I V E S T R E N G T H A N D P O W E R : U N I T E D S TAT E S , R U S S I A , A N D C H I N A

T O TA L G D P F I S C A L S T R E N G T H | 2019 T O TA L M I L I TA R Y S P E N D I N G P O W E R | 2019
(nominal, in trillions USD) (in billions USD)

C O M P E T I TO R + FORMAL ALLIES1 T O TA L C O M P E T I TO R + FORMAL ALLIES1 T O TA L

U. S. 21.4 48.5 U.S. 732.0 1,152.0

CHINA 14.3 14.6 CHINA 261.0 272.0

With the allies,
the U.S. owns a
disproportionate
RUSSIA 1.7 2.1 share of global RUSSIA 65.0 67.0
fiscal strength

KEY NON-ALIGNED2 8.1 8.1 KEY NON-ALIGNED2 133.0

I N T H I S C AT E G O R Y O F I N T E R N AT I O N A L M E A S U R E S O F C O M P E T I T I V E N E S S , T H E U N I T E D S TAT E S A R G U A B LY H A S T H E S I N G L E M O S T P R O M I N E N T C O M P E T I T I V E A D VA N TA G E
Any competitor that builds and sustains a predominantly supportive coalition of states will have a tremendous competitive advantage across many issue areas. A critical trend, however, is the relative
decline between now and 2060 of U.S. allies compared to the key non-aligned category. Sustaining good ties with India, Brazil, Indonesia, Mexico, and other emerging powers will be critical to sustaining
this advantage.

U.S. allies include NATO, Japan, South Korea, Australia, and the Philippines. For this measurement we included Pakistan as a formal Chinese ally. Russia’s formal allies are defined as countries in the Collective Security Treaty Organization (CSTO).
1

Assigning the leading or key non-aligned countries was a subjective exercise, though it involved a research-based assessment of several different measures. The list includes India, Indonesia, Malaysia, Vietnam, Singapore, Brazil, and Mexico.
2

SOURCES: GDP data from World Bank, GDP (current US$), dataset. Military spending data from Stockholm International Peace and Research Institute, Military Expenditure Database. Figures are from 2019 and predate the effects of the
COVID-19 pandemic.
 | 29

GEOPOLITICAL ALIGNMENT INDEX: T H E “ H E D G I N G ” M I D D L E

We assessed current alignment of a set of 20 focus countries based on a comprehensive “tilt” index of geopolitical activities. The alignment index factors (listed below) were assessed individually per
country with an overall degree assigned. What emerged from this exercise is a clear essential finding: The “hedging middle” is the key focus of alignment competition.

THE HEDGING MIDDLE

More aligned with U.S. More aligned with China

U.S. 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 CHINA

JP BR KH
AU
KR LK
DE MX

IN TH ET
PH I N C H I N A’ S S H A D O W :
IT Cambodia and Laos, but not necessarily
VN KE LA
aligned by choice

MY

RU
T H E D E M O C R AT I C A L L I E S : NG
Japan, Australia, Malaysia, Nigeria, I N VA S I O N O F U K R A I N E :
South Korea, Germany, Indonesia Russia’s invasion of Ukraine has tested these
Philippines, Italy
ID alignments—and strengthened the evidence
THE HEDGERS: that a significant number of states prefer to
Brazil, Mexico, India, Vietnam, Thailand, remain non-aligned. Many emerging nations
Kenya, Ethiopia, Sri Lanka have been reluctant to take sides in the war.
Countries joining the U.S.-led sanctions re-
gime have been mostly those already strongly
aligned to the United States.
20 FOCUS COUNTRIES | IDENTIFICATION CRITERIA I N D E X FA C T O R S | BY DEGREE OF WEIGHTING

1. Geographic/regional diversity 1. Existence of formal military alliance with either the United States or China: Binary yes/no variable; existence of alliance = 3 points in index
2. Strategic significance 2. Security cooperation (history and scope): Arms sales, defense coproduction, exercises, professional military education exchanges, basing, access agreements;
(GDP, military power, regional role) maximum score of 3 for extensive cooperation across all areas, 0 for no significant security cooperation relationship
3. Appear to be high-priority targets of influence 3. Views among country’s elite toward the United States and China: Qualitative expert assessment based on multiple RAND studies; 2 = very favorable to U.S.;
for China 1 = favorable to U.S.; 0 = neutral; –1 = unfavorable to U.S./favorable to China; –2 = very unfavorable to U.S./favorable to China
4. Identified in one or more U.S. strategy documents 4. Position on regional issues: Review of national positions (if any) on Southeast Asian territorial disputes, Hague ruling on South China Sea, human rights, and
as being significant for U.S. national interests informal level of ties to Taiwan; maximum 2 points for strongly critical stance toward China
5. Security strategy threat analysis: Does the country call out either the United States or China as threat/risk; 2 = very strongly, 1 = moderately; 0 = not at all or neutral
6. Territorial dispute with China or United States: Existence of a territorial dispute with China, 1 point
7. Composite of UN voting history on 17 major resolutions: Maximum 1 point for record highly favorable to one or another competitor

L E S S O N S O F T H E DATA No 1. No 2. Australia (AU), Cambodia (KH), Germany

Global geopolitical alignments remain highly favorable to A leading secondary trend is the existence, especially in (DE), Italy (IT), Japan (JP), Philippines
(PH), South Korea (KR), Brazil (BR),
the United States: In terms of allies, partners, and countries Asia, of a major bloc of nations committed to remaining India (IN), Indonesia (ID), Kenya (KE),
whose interests are broadly in accord, the United States has the non-aligned and attempting to hedge without taking Laos (LA), Malaysia (MY), Mexico (MX),
Nigeria (NG), Singapore (SG), Sri Lanka
opportunity to remain at the hub of a predominant global network. sides in the U.S.-China competition.
(LK), Thailand (TH), Vietnam (VN)

NOTE: The existence of formal military alliance index factor is adjusted based on status of alliance.
30
| MEASURES OF INTERNATIONAL POSITION AND INFLUENCE A B C D

IDEOLOGICAL AND
PA R A D I G M AT I C I N F L U E N C E
In global strategic competitions, nations gain advantage through their role in ideological and system-level competitions.
The U.S. comparative advantage over the Soviet Union in these areas was a major factor helping to account for the outcome of the Cold War. In addition to its domestic vibrancy, the United States’
ideas and example, and its role in global economic, cultural, and military networks, proved far superior. China is seeking to compete in these same areas today, and the rivalry for influence over the
system and its ideas will be a major focus of the coming competition.

C O M P E T I N G F O R S Y S T E M I C I N F L U E N C E : C AT E G O R I E S A N D R E L AT I V E U . S . A D VA N TA G E
K E Y C AT E G O R I E S POSITION EXAMPLES + U.S. ADVANTAGE — U.S. DISADVANTAGE N O CLEAR ADVANTAGE

+ Prevailing legitimation narratives—favored socioeconomic ideas, norms

T H E CATA LYS T S : F O U N D AT I O N A L N A R R AT I V E S A N D TO O L S — Information operations tools
+ Entertainment and media networks

+ Military alliances and coalitions

Size of economy, investments, loans, economic assistance
T H E M A G N E T S : G R AV I TAT I O N A L F O R C E S
+ Reserve currency status
+ Language

Global production chains

T H E H I G H WAYS A N D L I N K A G E S : C R I T I C A L N E T W O R K S
+ Financial networks
Control of ports, shipping assets, routes
— Information networks (5G)

+ International trade and financial norms

T H E C O N S T R A I N T S : ARCHITECTURE OF RULES/TREATIES/CONVENTIONS International maritime law
+ Arms control treaties / agreements

+ Intergovernmental institutions
T H E S CA F F O L D I N G : INTERNATIONAL INSTITUTIONS + Regional political and security organizations
+ Corporations

I N T H I S C AT E G O R Y O F I N T E R N AT I O N A L M E A S U R E S O F C O M P E T I T I V E N E S S : T H E U N I T E D S TAT E S R E TA I N S L E A D I N G P O S I T I O N I N T H E S Y S T E M I C C O M P E T I T I O N
One of our most important findings is that major powers that shape the international system to their goals and values—its ideas, narratives, cultural habits, institutions, rules and norms—gain a major competitive
advantage. Our research on the history of major-power competitions and current U.S., Chinese, and Russian strategies pointed to a number of major categories of systemic advantage that the United States
currently retains.

SOURCE: RAND analysis of a broad mix of quantitative and qualitative metrics of different aspects of the competition, ranging from financial data to government strategy documents. See Bibliographic Note for more details.
 | 31

P O L I T I C A L , S O C I A L , A N D C U LT U R A L A F F I N I T Y I N D E X : 2 0 F O C U S C O U N T R I E S

NEUTRAL
U.S. CHINA INDEX ESSENTIAL FINDINGS
10 5 0 5 10 • 
Most focus countries are full democra-
cies; leading indicator of affinity
DE AU MX IN BR ID NG ET LA LK KH
• Several have histories of war/conflict
with China and strong historical ties
IT PH KR KE MY VN
with United States
JP TH • Public opinion favors United States
and is growing in most cases
S T R O N G E R A F F I N I T Y W I T H U . S . : Germany, Italy, Japan, Australia, Philippines, S T R O N G E R A F F I N I T Y W I T H C H I N A : Cambodia, Sri Lanka, Laos,
• U.S. popular culture, English language
Mexico, South Korea, India, Brazil, Kenya, Indonesia, Nigeria, Malaysia Vietnam, Thailand
still dominate
INDEX FACTORS | BY DEGREE OF WEIGHTING
• Freedom House rating of regime types • National policies on shared values • History (positive/negative)
• Public opinion, political and popular culture ties • Language (ties and trends)

E D U C AT I O N O U T R E A C H : F O R E I G N S T U D E N T S I N S E L E C T C O U N T R I E S F R O M C H I N A
L E S S O N S O F T H E D ATA :
One traditional way that countries, especially leading global powers, spread their influence, norms, and cultural values is through education—both students they host
from abroad and their own young people who travel abroad to study. On both of these measures, China has exploded as a major player, especially in the enormous No 1.
numbers of Chinese students studying abroad.
2012 2016
% CHANGE TRENDLINE The United States continues to lead
80 most aspects of international ideo-
70 logical and systemic competition. As
60 a source of ideas and values, a leader
50
of institutions, and a setter of rules and
40
30
norms, the United States remains far

20 ahead of China—at least for the time

10 being. Recent U.S. political and eco-
0 nomic crises and polarization are doing

BR NG DE IN MX IT MY LK VN KE SG PH ID AU KH KR TH serious damage to perceptions of U.S.

reputational leadership.
U N FAV O R A B L E AT T I T U D E T O WA R D C H I N A | SELECT COUNTRIES
No 2.
2015 2022
% CHANGE TRENDLINE China is making the most progress
90 R E S U LT S O F G R O W I N G S K E P T I C I S M O F C H I N E S E P O W E R in the more material and investment-
80
• Regional military buildup: Japan has declared an intention to related areas of systemic competi-
70
get to 2% of GDP in defense spending; Australia in 2022-2023 is tion, such as information networks
60
projected to spend over 7% more on defense. and ports.
50
• Tougher standards for Chinese investment: EU-China
40
comprehensive agreement shelved. No 3.
30
• Investments in efforts to build alternative sources of key China is also increasingly seeking to
20
supplies and reduce dependence on China: Rare earth gain influence within existing inter-
10 Steady +26% +14% +32% +19% Steady +43% +40%
0 materials, supply chain components. national institutions as well as creating

JP
parallel Chinese-led institution networks.
US CA DE UK FR KR AU

SOURCES: Data from the Ministry of Foreign Affairs, People’s Republic of China; UN Educational, Scientific and Cultural Organization; China Daily; ICEF Monitor; Pew Research Center,
“Negative Views of China Tied to Critical Views of Its Policies on Human Rights,” June 29, 2022. See Bibliographic Note for more details.
32
| MEASURES OF INTERNATIONAL POSITION AND INFLUENCE A B C D

M I L I TA RY E N G A G E M E N T
AND POSTURE
Measuring the relative global military posture of the major powers as a basis for competitive advantage
This final category of the international measures of position and influence surveys measures of global military standing. These do not relate to direct comparisons of military forces, but rather the
competitive architecture of each major power’s military presence. Measures include bases, access agreements, and military engagement activities, such as exercises, educational exchanges, and
training missions.

M I L I TA R Y C O O P E R AT I O N : O V E R S E A S M I L I TA R Y A I D A N D E X E R C I S E S / M I L I TA R Y E N G A G E M E N T A C T I V I T Y
Gaining influence and strategic advantage through security cooperation offers a potentially lasting competitive advantage. Despite notable Chinese and Russian security cooperation programs, the
combined U.S. and European budget contributions continue to dwarf those of competitors. However, legacy commitments in the Middle East leave the U.S. security cooperation portfolio partly mis-
aligned to the demands of the strategic competition with China and Russia, located in the U.S. Indo-Pacific Command and U.S. European Command areas of responsibility, respectively.

T O TA L A N N U A L S E C U R I T Y / M I L I TA R Y A I D | U.S. SECURITY AID | BY U.S. COMBATANT COMMAND, 2013–2018

(in billions USD) (in billions USD)

U. S. 13.7 6
2018

EUROPEAN UNION 7.7

5
2017
Australia established
the “Pacific Step Up” $4.5B – 2018
AUSTRALIA 1.4
program to compete U.S. overseas
2019-20
with China for influence 4 security aid has
specifically in the Pacific been overwhelm-
Islands and for security ingly directed in the
cooperation activity in CENTCOM area of
CHINA* Southeast Asia. 3 responsibility.
0.1–0.15
2018

RUSSIA* 0.3–1.1
2018
2

* Figures for Chinese and Russian military aid are estimates based on the best available open source
information. The Russian figures include a category of the Russian budget (Implementation of International
Agreements in the Sphere of Military-Technical Cooperation) that includes military assistance but also 1
base construction and other security tasks. Russia also provides aid through donated equipment, and
for these amounts we assessed the total set of Russian publicly available aid deliveries with a calculation
of average cost for relevant equipment. Based on these and other sources, we believe that a total of
0
$300 million–$1 billion per year in total Russian military assistance represents a reasonable order of
I N D O PA C O M SOUTHCOM EUCOM AFRICOM C E N T C O M **
magnitude estimate. In the Chinese case, we used best official Chinese statements of aid as well as
open source reporting on specific cases of military aid relationships. ** Excludes Afghanistan and Israel.

NOTES: AFRICOM = Africa Command, CENTCOM = Central Command, EUCOM = European Command, INDOPACOM = Indo-Pacific Command, SOUTHCOM = Southern Command.
SOURCES: Australian Department of Foreign Affairs and Trade, “2019-20 Australian Aid Budget: Pacific at a Glance”; Security Assistance Monitor.
 | 33

M I L I TA R Y A I D : C O N V E N T I O N A L A R M S T R A N S F E R S
Russia is a leading arms merchant, accounting for 21 percent of global arms transfers from 2014 to 2018 (second behind the United States) and L E S S O N S O F T H E D ATA :
is an established provider to former Soviet countries.
The basic lesson of measures of military
T O TA L R U S S I A N A R M S T R A N S F E R S A N D T O P 1 0 R E C I P I E N T S | 2013–2018 # Confirmed arm transfers # Probable arms transfers engagement is that the United States
remains far and away the world’s lead-

$1.21B total In millions USD ing security cooperation and military

S E R B I A 2 4 6 . 0 engagement provider—followed closely

S Y R I A
18 7. 8 by its European allies. Several other allied

K A Z A K H S TA N 18 7. 5 democracies, including Japan and Australia,

M O N G O L I A 174 .1 conduct or participate in important military

B E L A R U S
16 7. 4 150.0M engagement activities as well. Russia and

E G Y P T
6 7. 5 China tend to work primarily with either
204.1M TA J I K I S TA N 4 8 .1 traditional security partners or else devel-

P H I L I P P I N E S
36.0 oping nations interested in help with their
K Y R G Y Z S TA N
2 7. 6 security sectors; both are taking opportunities
H U N G A R Y
20.5 20.5M as they arise to bolster security ties. But
1,014.6M neither has a global profile of security
engagement that yet remotely approach-
es that of either the United States or the
SHARE OF GLOBAL ARMS TRANSFERS | 2014–2018 CHANGE IN SHARE OF GLOBAL ARMS SALES | 2014–2018
countries of the EU.

36% U.S. | 5.2% C H I N A | 21% R U S S I A +29% U.S. | +2.7% C H I N A | −17% R U S S I A

M I L I TA R Y E X E R C I S E S
Comparing military exercise activity is difficult for several reasons. A wide range of activities fall under that general category, from tiny visits involving a handful of troops to massive exercises involv-
ing tens of thousands of personnel. Overall numbers do not measure the rigor of exercises; U.S. and European-led exercises are generally of greater sophistication and higher quality than Russian or
Chinese activities and involve other partners of higher capability levels.

T O P 1 O B I L AT E R A L E X E R C I S E PA R T N E R S F O R R U S S I A A N D C H I N A | 2013–2019

B E L A R U S 19 P A K I S T A N 19
C H I N A 16 R U S S I A 16
I N D I A 15 A U S T R A L I A 15
S E R B I A 11 T H A I L A N D 13
RUSSIA EGY P T 8 CHINA U N I T E D S TAT E S 12
MONGOLIA 8 FR A NCE 9
N O R W AY 7 INDIA 9
TA J I K I S TA N 6 INDONE SIA 7
P A K I S TA N 4 SING A PORE 7
IR A N 3 LEBA NON 6

SOURCES: Stockholm International Peace Research Institute data on Russian conventional arms; RAND analysis; DoD, Assessment on Defense Implications of China’s Expanding Global Access, December 2018.
34
|

M A P P I N G the
BILATERAL COMPETITION
National Interests, Converging Areas of Competition, and U.S. Goals
The historical and theoretical foundation of our research offered insights about the way that strategic competitions and rivalries work
in general terms. We also sought to understand the nature of the two leading specific competitions. To do so, we outlined (1) the core
PRIORITY AREAS OF COMPETITION WITH
national interests of the United States, China, and Russia, (2) the resulting national objectives for each, and (3) areas where they clash
CHINA
(or opportunities for coordination).
MOST IMPORTANT AREAS:
• We began by working with RAND Russia and China subject-matter experts (SMEs) to identify key Russian and
Chinese areas of national interest. In the process, we examined the ways in which each of the three states interpret their Independence of U.S. media and political
interests—the subjective and sometimes idiosyncratic ways in which they conceptualize issues like domestic security, institutions

prosperity, and regional influence. Maintaining a lead in defense-related technologies

• We then located and mapped specific areas of competition that emerged from these interests. After an initial effort to do so,
Sustaining a positive orientation of strategic partners
we workshopped the results with Russia and China SMEs to gain additional reliability in the assessments, and then
Economic influence in Asia
conducted a frequency analysis to determine which kinds of competition recurred most across the various categories.
Leadership in global and regional financial and
• Finally, we defined U.S. policy goals for each area of conflict.
technical institutions

IDENTIFYING AREAS OF THE COMPETITION Leadership in international organizations

The table at right identifies the most important and most common areas of competition with China and Russia, and we draw more
general lessons from this exercise in the graphic at far right. Russia’s invasion of Ukraine shows how collections of interest clashes— MOST COMMON AREAS:

such as over the balance of the European security order—can suddenly escalate into much more intense crises. But it does not alter
International norms and rules
our fundamental assessment of the map of the U.S.-Russia competition.
Economic and political influence in key countries

For readers interested in the full detail of the mapping exercise, we have laid out the basic findings across the following two sets of Influencing the alignment of key countries
pages. They characterize places where interests, as they are conceptualized by the three actors, conflict. At points of conflict between
Influence or predominance in international
interests, we identify the specific issue areas in which the United States and each of these rivals are likely to compete, as well as institutions
likely U.S. objectives in each area. The method provides a way of identifying areas of conflict that are most common as well as U.S.
capabilities that may be most crucial across a range of conflicting interests
 | 35

R E S U LT S O F M A P P I N G T H E B I L AT E R A L C O M P E T I T I O N : 4 M A J O R L E S S O N S
This exercise offers several major lessons.

1 C O N T E S T F O R L E A D E R S H I P O F T H E I N T E R N AT I O N A L S Y S T E M
The core of the competition is reflected in a contest to dominate overarching sources of power and influence in the international
system—its institutions, trade and financial flows and the organizations and processes that govern them, monetary power, rules
and norms, and softer issues of values, ideas, and narratives. The competition is in many ways a contest for leadership of the
international system and for predominant reputation and legitimacy within that system.

PRIORITY AREAS OF COMPETITION WITH CONTEST FOR ALIGNMENT OF MAJOR GEOPOLITICAL ACTORS
2
R USSIA The competition is in part a contest for the value orientation and practical interest-based alignment of major geopolitical
actors. Influencing their alignment—and investing in the tools necessary to do so, such as economic assistance, security
MOST IMPORTANT AREAS:
assistance, partnering and engagement activities, the diplomatic instruments of power, and information tools to shape

Preserving a secure nuclear balance narratives and opinions—constitutes a critical priority for the United States.

Influence over European security order

Maintaining a favorable or stable balance of

cyber power

Control over international financial system

3 COMPETITION FOR EMERGING TECHNOLOGY DOMINANCE
These competition maps reemphasize the importance, especially with regard to China, of the struggle for leadership in key
MOST COMMON AREAS: emerging technology areas.

M A P P I N G T H E B I L AT E R A L C O M P E T I T I O N
International norms and rules

Influencing the alignment of key countries

Economic and political influence in key countries

Regional military balance in Europe 4 THE GROWING RISK OF SUDDEN, UNEXPECTED CRISES
Our analysis suggests that the United States has relatively few vital and irreconcilable interests in its competitions with China and
Economic policies and norms
Russia. Yet as Russia’s invasion of Ukraine and rising tensions with China over Taiwan make clear, the clash of even more-limited
Influence or predominance in international
interests is posing an increasing risk of sudden crises.
institutions
 36
| MAPPING THE BILATERAL COMPETITION
SECURITY OF THE
HOMELAND
SECURITY OF DOMESTIC
POLITICAL INSTITUTIONS
N AT I O N A L P R O S P E R I T Y
NATIONAL INTERESTS
PREVENT COMPETITORS
FROM BECOMING REGIONAL
HEGEMONS
SECURITY OF ALLIES AND
PA R T N E R S
PRESERVE ABILITY TO LEAD
I N T E R N AT I O N A L O R D E R
PROMOTION OF LIBERAL
NORMS
C H I N A – U.S. R U S S I A – U.S. N AT I O N A L I N T E R E S T S , C O N V E R G I N G A R E A S O F C O M P E T I T I O N , A N D U . S . G O A L S
SECURITY OF THE HOMELAND D O M E S T I C S TA B I L I T Y / R E G I M E S E C U R I T Y N AT I O N A L P R O S P E R I T Y
1. 2. 3.
D EVELOPMENT OF SPACE CAPABILITIES CHINESE ACCESS TO ADVANCED MILITARY-APPLICABLE TECHNOLOGIES
i. U.S. advantage in space fighting capability upheld i. Chinese access to key military-applicable tech controlled
ii. Strategic stability in space capability strengthened
iii. Exposure of space assets in potential conflict limited
A.
LE AD IN DEFENSE-REL ATED TECHNOLOGIES
i. U.S. strengthens leadership in advanced defense-related technologies
(SEE 1:E) NUCLEAR BALANCE
B.
CONTROL OF INFO./MEDIA SPACE IN CHINA LEAD IN KEY TECHNOLOGIES WITH BROAD APPLICABILITY
i.  Opportunities for U.S. info-tech firms in Chinese market i. U.S. global leadership in advanced tech strengthened
expanded ii. Chinese theft of U.S. advanced tech controlled
ii. Autonomy of U.S. media firms in China respected iii. Chinese efforts to compel U.S. tech transfers halted
RELATIVE OPENNESS OF CHINA'S ECONOMY
i. Expand access to Chinese market for U.S. companies
ii. Encourage Chinese adoption of international standards
C. 2 INTERNATIONAL BEHAVIOR OF CHINESE FIRMS
i. Limit SOE access to sensitive markets and prevent SOE trade with sanctioned countries
ii. Ensure that Chinese SOEs operate according to estab. market standards
CONTROL OF KEY MARKETS AND RESOURCES
i. Maintain market-based access for U.S. firms
ii. Limit Chinese state influence over market access
(SEE 3:F) LEADERSHIP IN GLOBAL/REGIONAL FINANCIAL AND TECH INSTITUTIONS
(SEE 3:F) ECONOMIC INFLUENCE IN ASIA
(SEE 3:F) ECONOMIC INFLUENCE OUTSIDE ASIA
2 MILITARY CAPABILITIES OF U.S. ALLIES (SEE 3:F) LEADERSHIP IN GLOBAL/REGIONAL FINANCIAL AND TECH
i. Deterrent capacity of allies, partners strengthened INSTITUTIONS
D. ii. Restrain offensive capabilities of allies, partners
(SEE 1:E) NUCLEAR BALANCE
3 NUCLEAR BALANCE
i. U.S. advantage in nuclear capabilities upheld
ii. U.S.-China strategic stability in nuclear domain strengthened
E. iii. U.S. exposure in potential nuclear conflict limited
(SEE 1:D) MILITARY CAPABILITIES OF U.S. ALLIES
5 STRENGTH OF INTERNATIONAL NORMS AND 3 LEADERSHIP IN GLOBAL/REGIONAL FINANCIAL AND TECH INSTITUTIONS
STANDARDS—HUMAN RIGHTS, DEMOCRACY i.  International economic + financial rules, norms, standards favorable to U.S. companies
i.  International human rights norms strengthened ii. U.S. companies expand share of global trade
ii. Promote democratic governance and reforms iii. U.S. dollar remains dominant world currency
3 STRENGTH OF INTERNATIONAL NORMS AND 5 ECONOMIC INFLUENCE IN ASIA
STANDARDS—MILITARY INTERVENTION, CYBERSPACE i.  Asia's economic + financial order favors U.S. companies
F.
i. U
 .S. and its allies retain freedom of action in military ii.  U.S. companies expand share of regional trade, investment
intervention policy
iii.  U.S. currency remains widely in use in Asia
ii.  Norms regarding cyber, space domains favor U.S. interests
4 ECONOMIC INFLUENCE OUTSIDE ASIA
i.  Preserve traditional U.S. economic and political arrangements
ii.  Limit Chinese economic cooperation with potential U.S. adversaries
INT'L STATUS OF TIBETAN + UIGHUR GROUPS (SEE 3:C) INTERNATIONAL BEHAVIOR OF CHINESE FIRMS
i. Human and political rights of Uighur, Tibetan populations respected
G.
(SEE 2:F) STRENGTH OF INTERNATIONAL NORMS AND
STANDARDS—HUMAN RIGHTS, DEMOCRACY

TERRITORIAL/MARITIME CLAIMS
4.
FREEDOM OF MOVEMENT IN SOUTH CHINA SEA
i. International freedom of movement through South China
Sea upheld ii. Encourage Indian support for U.S.-led order
ii. Sovereignty, territorial disputes peacefully resolved
iii. Support allied and partner capabilities to defend claims
STATUS OF TAIWAN
i. Taiwan's status peacefully resolved
ii. Taiwan maintains credible deterrence against threat of Chinese invasion
CHINESE TERRITORIAL CLAIMS AGAINST JAPAN
i. Senkaku status peacefully resolved
ii. Japan maintains credible deterrence against potential
Chinese aggression and restrained from provoking China
2 INFLUENCE IN DETERMINING INTERNATIONAL LAWS,
RULES REGARDING TERRITORIAL AND MARITIME RIGHTS
i. Promote U.S. interpretation of UN Convention on the Law of
the Sea
ii. Maintain influence of international organizations in resolving
Chinese disputes
INFLUENCE OVER THE PERIPHERY
5.
(SEE 3:F) ECONOMIC INFLUENCE IN ASIA
3 ORIENTATION OF POTENTIAL STRATEGIC PARTNERS
i. Limit Chinese-Russian cooperation
iii. Encourage other Asian states' support for U.S.-led order upheld
(SEE 3:F) ECONOMIC INFLUENCE IN ASIA
(SEE 3:F) SECURITY ARRANGEMENTS IN E. AND SE. ASIA
REGIONAL RISK TOLERANCE FOR DPRK DENUCLEARIZATION
i. Retain freedom of action in pursuing denuclearization of DPRK
ii. Retain freedom of action in deterring DPRK aggression
(SEE 5:F) SECURITY ARRANGEMENTS IN E. AND SE. ASIA
3 SECURITY ARRANGEMENTS IN EAST AND SOUTHEAST ASIA
i. Maintain preeminence of U.S. regional security arrangements
ii. Limit growth of alternative arrangements that marginalize U.S.
iii. M aintain U.S. predominant influence in Pacific Island states
(SEE 3:F) ECONOMIC INFLUENCE IN ASIA
(SEE 2:F) STRENGTH OF INTERNATIONAL NORMS AND
STANDARDS—HUMAN RIGHTS, DEMOCRACY
(SEE 2:F) STRENGTH OF INTERNATIONAL NORMS AND
STANDARDS—MILITARY INTERVENTION, CYBERSPACE
SECURITY FOR OVERSEAS INTERESTS
6.
(SEE 3:F) ECONOMIC INFLUENCE OUTSIDE ASIA
(SEE 5:D) ORIENTATION OF POTENTIAL
STRATEGIC PARTNERS
CHINESE MILITARY SUPPORT FOR POTENTIAL
U.S. ADVERSARIES
i. Limit Chinese military support to Iran
(SEE 3:F) ECONOMIC INFLUENCE OUTSIDE ASIA
(SEE 2:F) STRENGTH OF INTERNATIONAL NORMS
AND STANDARD—HUMAN RIGHTS, DEMOCRACY
| 37
S H A P I N G I N T E R N AT I O N A L O R D E R
7.
INDEPENDENCE OF U.S. MEDIA /POLITICAL INSTITUTION
i. Chinese influence in U.S. politics, media, businesses controlled
(SEE 3:F) LEADERSHIP IN GLOBAL/REGIONAL
FINANCIAL AND TECH INSTITUTIONS
LEGEND
AREA OF COMPETITION (single instance)
i. U.S. goal linked to area of competition
ii. U.S. goal linked to area of competition
4 AREA OF COMPETITION (recurring area)
2 3 4 5 Frequency of occurrence
(SEE COLUMN:ROW) RECURRENCE OF AREA
LEADERSHIP IN INTERNATIONAL ORGANIZATIONS
i.  U.S. maintains leadership role in existing international
organizations
ii. Constrain influence of Chinese alternative institutions
iii.  Limit Chinese influence in existing international
organizations
(SEE 5:D) ORIENTATION OF POTENTIAL STRATEGIC
PARTNERS
(SEE 4:F) INFLUENCE IN DETERMINING
INTERNATIONAL LAWS, RULES REGARDING
TERRITORIAL AND MARITIME RIGHTS
(SEE 2:F) STRENGTH OF INTERNATIONAL NORMS AND
STANDARDS—HUMAN RIGHTS, DEMOCRACY
(SEE 2:F) STRENGTH OF INTERNATIONAL NORMS AND
STANDARDS—MILITARY INTERVENTION, CYBERSPACE
 38
| MAPPING THE BILATERAL COMPETITION
SECURITY OF THE
HOMELAND
SECURITY OF DOMESTIC
POLITICAL INSTITUTIONS
N AT I O N A L P R O S P E R I T Y
NATIONAL INTERESTS
PREVENT COMPETITORS
FROM BECOMING REGIONAL
HEGEMONS
SECURITY OF ALLIES AND
PA R T N E R S
PRESERVE ABILITY TO LEAD
I N T E R N AT I O N A L O R D E R
PROMOTION OF LIBERAL
NORMS
C H I N A – U.S. R U S S I A – U.S.
SECURITY OF THE HOMELAND
1.
3 NUCLEAR BALANCE
i. Reinforcing strategic stability
ii. Countering perceived nuclear imbalance
BALANCE OF SPACE CAPABILITIES
i. U.S. advantage in space fighting capability upheld
A. ii. Strategic stability in space capability strengthened
iii. E xposure of space assets in potential conflict limited
BALANCE OF CYBER POWER
i. Security of critical infrastructure assured
ii. Security of key government and private networks assured
iii. Effectiveness of U.S. offensive cyber capabilities maintained
B.
(SEE 1:A) NUCLEAR BALANCE
C.
6 GEOPOLITICAL ORIENTATION OF FORMER SOVIET STATES
i.  Strengthen U.S./NATO security relations with former Soviet states
ii. Support EU integration of regional states
iii. M aintain credible prospect of eventual EU/NATO membership
D.
iv. Maintain aspirant country interest in EU/NATO membership
v. Support Georgia’s territorial integrity
vi. Support democracy in the region and maximize U.S. regional influence
CONVENTIONAL MILITARY BALANCE IN EUROPE
i. Deter Russian aggressions against U.S. allies
ii. Prevent Russian escalation dominance
E. iii. R educe risk of inadvertent conventional conflict
iv. L
 imit militarization of Arctic that could threaten U.S. allies
DEVELOPMENT OF BALLISTIC MISSILE DEFENSE IN EUROPE
i. Implement European Phased Adaptive Approach (EPAA)
POTENTIAL FURTHER ENLARGEMENT OF
EURO-ATLANTIC INSTITUTIONS
i. Maintain credible prospect of eventual membership
ii. Maintain aspirant country interest in membership
STATUS OF CRIMEA
F. i.  Prevent states from recognizing the annexation of Crimea
ii. Prevent Russia from profiting from the annexation
U.S. SECURITY ROLE IN ASIA
i.  Maintain preeminence of U.S. regional security arrangements
ii. L imit growth of alternative arrangements that marginalize the U.S.
G.
N AT I O N A L I N T E R E S T S , C O N V E R G I N G A R E A S O F C O M P E T I T I O N , A N D U . S . G O A L S
R E G I M E S E C U R I T Y O F P U T I N - L E D S TAT U S Q U O
2.
(SEE 1:D) GEOPOLITICAL ORIENTATION OF FORMER SOVIET
STATES
2 STRENGTH OF INTERNATIONAL NORMS AND STANDARDS—
HUMAN RIGHTS, DEMOCRACY
i. International human rights norms strengthened
ii. Promote democratic governance and reforms
STRENGTH OF NORMS GOVERNING GLOBAL COMMONS,
INTERVENTIONS
i. Norms regarding global commons (e.g., cyber, space, maritime)
domains favor U.S. interests
STRENGTH OF DEMOCRATIC NORMS, INCLUDING FREEDOM
OF EXPRESSION, RELIGION, AND PRESS
i. Prevent further erosion of democratic norms in Russia
ii.  Resist disinformation and media manipulation in U.S. and allies
2 STRENGTH OF LIBERAL ECONOMIC NORMS
i. Maintain rules-based global trading system
ii. M aintain U.S. standards of corporate governance internationally
N AT I O N A L P R O S P E R I T Y
3.
(SEE 1:A) NUCLEAR BALANCE
POTENTIAL ENERGY MARKET COMPETITION
i. Facilitate U.S. energy exports
ii. Prevent OPEC-Russia price collusion
POTENTIAL FOR EXCLUSIVE TRADING ZONES THAT EXCLUDE RUSSIA
i. Support implementation of EU Association Agreements
ii. Further EU enlargement and create TTIP-like agreement with EU
POTENTIAL ARMS MARKET COMPETITION
i. Minimize third-country purchases of major Russian weapon systems
ii. Cultivate “swing state” partners for purchases of U.S. arms
iii. Avoid losing current major U.S. arms purchasers
2 ECONOMIC ORIENTATION OF FORMER SOVIET STATES
i. Support implementation of EU Association Agreements
ii. Further EU enlargement
iii. Minimize relevance of Eurasian institutions
iv. Assist regional states’ trade and investment diversification
SOURCES OF EUROPEAN ENERGY SUPPLIES
i. Minimize EU reliance on Russian gas
ii. Minimize Gazprom's leverage over its European customers
LEADERSHIP IN GLOBAL AND REGIONAL FINANCIAL AND TRADING
INSTITUTIONS
i. Ensure continued U.S. influence over World Bank/IMF/World Trade
Organization
ii. Minimize relevance of Eurasian institutions
UTILITY OF SANCTIONS AND CONTROL OVER INTERNATIONAL
FINANCIAL SYSTEM
i. Maintain centrality of dollar in global trade and finance
ii. Ensure compliance with U.S. sanctions
INTERNATIONAL BEHAVIOR OF SOES
i. Limit Russian SOE access to sensitive markets
ii. Prevent Russian SOE trade with sanctioned countries
iii. Ensure that Russian SOEs operate internationally according to established
market standards

INFLUENCE OVER THE PERIPHERY
4.
(SEE 1:D) GEOPOLITICAL ORIENTATION OF FORMER SOVIET STATES
(SEE 3:D) ECONOMIC ORIENTATION OF FORMER SOVIET STATES
COOPERATION BETWEEN U.S. AND ITS ASIAN ALLIES 2
i. Maintain preeminence of U.S. regional security arrangements
2 INFLUENCE OVER THE ASIA-PACIFIC REGIONAL ORDER
(SEE 1:D) GEOPOLITICAL ORIENTATION OF FORMER SOVIET STATES
| 39
S H A P I N G I N T E R N AT I O N A L O R D E R
LEGEND
5. AREA OF COMPETITION (single instance)
i. U.S. goal linked to area of competition
ii. U.S. goal linked to area of competition
4 AREA OF COMPETITION (recurring area)
2 3 4 5 6 Frequency of occurrence
(SEE COLUMN:ROW) RECURRENCE OF AREA
NOTES: OPEC = Organization of the Petroleum Exporting
Countries, TTIP = Transatlantic Trade and Investment
Partnership.
(SEE 1:D) GEOPOLITICAL ORIENTATION OF FORMER SOVIET STATES
INFLUENCE OVER EUROPEAN SECURITY ORDER
i. Ensure continued U.S. leadership in European security
ii. Minimize Russian influence on European security
i. Minimize anti-U.S. Russia-China collaboration
ii. Maintain preeminence of U.S. regional security arrangements
iii. Limit growth of alternative arrangements that marginalize U.S.
LEADERSHIP IN INTERNATIONAL ORGANIZATIONS
i. Ensure continued U.S. ability to set the agenda of international organizations
ii. Keep third-country support for U.S. leadership
WILLINGNESS OF U.S. TO ENGAGE IN JOINT DECISIONMAKING ON GLOBAL ISSUES
i. Avoid constraints that could prevent U.S. freedom of action on vital issues
(SEE 5:E) INFLUENCE OVER EUROPEAN SECURITY ORDER
(SEE 5:E) INFLUENCE OVER THE ASIA-PACIFIC REGIONAL ORDER
INFLUENCE OVER MIDDLE EAST REGIONAL ORDER
i. Maintain preeminence of U.S. security arrangements
ii. Minimize Russian regional influence
(SEE 2:F) STRENGTH OF INTERNATIONAL NORMS AND STANDARDS—HUMAN RIGHTS, DEMOCRACY
STRENGTH OF INTERNATIONAL NORMS AND STANDARDS—MILITARY INTERVENTION, CYBERSPACE
i. Increase support for U.S. interpretation of Responsibility to Protect
ii. Norms regarding global commons domains are liberal
(SEE 1:D) GEOPOLITICAL ORIENTATION OF FORMER SOVIET STATES
GLOBAL CONSENSUS REGARDING LEGITIMATE FORMS OF GOVERNMENT
i. Ensue that democracy continues to be seen as most legitimate form of governance
(SEE 2:G) STRENGTH OF LIBERAL ECONOMIC NORMS
40
|

CONCLUSION
S E V E R A L M A J O R L E S S O N S A N D T H E M E S E M E R G E D F R O M O U R A N A LY S I S :

1 First, the baseline for success in strategic competition is the same as it has always been for great powers—
foundational national dynamism, economic strength and a competitive position in leading industries and frontier
technologies. Those qualities are the basis for all other competitive priorities. Dealing with leading domestic chal-
lenges, from corrupted information environments to societal polarization to rising inequality, is a precondition for the
long-term success of U.S. global leadership and competitive advantage.

2 Second, the competition is, in many ways, over the essential character of the international system—its institutions,
rules, norms, narratives, and values—and the United States must prioritize competitive capabilities in these areas.
Dominance in the prevailing paradigm has offered tremendous competitive advantages to the United States, creating
a larger context in which broadly accepted norms and values push world politics in directions favorable to U.S.

3 Third, the trajectory of the U.S.-China balance of power is not a “power transition” as classically defined. China is rising
to become a leading actor in world politics, alongside but not surpassing the United States. Over time, India, the
European Union, and a more forceful Japan will also be among the world’s leading powers. Meanwhile many nations
in Asia are determined to push back against Chinese coercion. The prospect of outright regional, let alone global,
Chinese primacy is slim.

4 Fourth, multilateralism can be a tremendous U.S. competitive advantage and a force multiplier, especially when deal-
ing with China. Ensuring positive, sustainable, and mutually beneficial relationships between the United States
and its existing and key potential future allies will therefore remain an essential element of success in the broader
competition.

5 Fifth, in operational military terms the greatest risks in the competition are that a competitor will develop niche technol-
ogies in support of a revolutionary operational concept that threatens existing U.S. ways of waging war, or that critical
dependencies will hamstring U.S. efforts in any extended conflict. The United States must prioritize both efforts to
mitigate such concepts and new concepts of its own to sidestep rivals’ intent.

6 Sixth, information security is increasingly an equally essential basis for competitive success. China and Russia have
each identified the information environment as a leading area of competition. Vulnerability in this competition will be
social as much as it is military.

7 Seventh and finally, the major areas of competition demand an increasingly collaborative effort across the U.S.
government, including steps to enhance non-military tools of statecraft.
 | |114 1

PRIORITY INVESTMENTS AND POLICIES FOR COMPETITIVE SUCCESS

Our general conclusions highlight two broad sets of priorities for U.S. emphasis and investment in a strategic competition.
First, reflected in the list below, are the broad national and general international investments suggested by our work:

N AT I O N A L A N D I N T E R N AT I O N A L I N V E S T M E N T S

SSustain effective productive capacity of the nation

Maintain financial strength and stability

Maintain lead or share of lead in emerging industries and technologies

Protect information environment of homeland, allies, and partners

Lead strong formal alliances

Enjoy predominant position in international economic order

Assemble and maintain predominant friendly alignment of leading powers in world politics (beyond formal allies)

Develop tools, techniques to engage in ongoing geopolitical and geo-economic competition below the threshold of war

Preserve leading influence in global institutions and rules

Generate dominant global value system, narrative(s)

The analysis has also pointed to priorities for defense policy and investment. These broadly flow from the central insights that,
while major warfighting preparedness remains essential, major U.S. competitors do not largely seek to achieve their objectives
through these means. Moreover, history does not suggest many examples of rivalries that have been decided by imbalances in
a single military capability or technology.

DEFENSE PRIORITIES

C AT E G O RY EXAMPLES
Avoid significant lag in military applications of frontier Investments in areas such as AI, quantum computing, directed energy,
technologies hypersonics, biotechnology, and other identified areas of competitor focus

Avoid vulnerability to packages of technologies and Investments in intelligence, technologies, and operational concept
operational concepts used to generate decisive development in areas of information/cyber and electronic warfare,
military effect autonomous and swarming systems, and space warfare

Information competition functions; Coast Guard and other non-military

Investments in military and paramilitary capabilities
maritime capabilities; force design and application for engagement
to compete below the threshold of major war
activities; intelligence, surveillance, and reconnaissance systems

Senior leader engagements; military assistance; security cooperation activi-

Investments and policies to sustain and deepen alliances ties, specifically exercises and funding for International Military Education and
Training/professional military education; English language training programs

Concepts and joint force capabilities to achieve assigned General Service and DoD priorities for potential regional contingencies,
objectives in regional contingencies/long-range power specifically long-range fires, additional stockpiles of precision weapons,
projection missions in the near and long terms continued force modernization, and development of new operational concepts
42
| CONCLUSION

A D D R E S S I N G A R E A S O F N E E D I N U . S . S T R AT E G I E S F O R C O M P E T I T I O N

The basic conclusions and recommended areas of priority focus in this analysis will look familiar to U.S. Defense officials
and national security analysts. The good news is that U.S. national security policy is already aware of and acting on many
of them: Strengthening ties with allies, investing in infrastructure and key technologies areas, working to enhance informa-
tion resilience, and efforts to address critical dependencies for the United States and its allies in areas such as rare earth
materials, energy, and semiconductors. The United States has rallied European and global efforts to respond to Russian
aggression in Ukraine, which has accelerated some efforts to address these issues. We would highlight the following areas
as those which need further emphasis and attention—competitive efforts that are relatively under-appreciated or gaining
insufficient resources.

I N S T I T U T I O N A L R E F O R M S T O S E C U R E T H E G R E AT E S T E F F E C T F R O M E V E R Y D O L L A R S P E N T. In areas such as
procurement and acquisition, talent management, and Joint doctrine, the regulatory, bureaucratic, and
conceptual constraints on U.S. efforts are as big a barrier to success as lack of resources. To tune the U.S.
competitive engine for long-term rivalries, such reforms are essential.


W I L L I N G N E S S T O T A K E R I S K T O D E E P E N A L L I A N C E E F F E C T I V E N E S S . In areas such as arms and technology
transfer and information sharing, many barriers to stronger collaboration remain. These also deter some
emerging nations from working more closely with the United States in the security realm, in part because
they cannot count on timely equipment deliveries. Efforts to streamline the ability to work closely with
others is a critical priority in a more multilateral context.

C A PA B I L I T I E S , S T R AT E G I E S , A N D O R G A N I Z AT I O N S T O P R E V A I L I N T H E C O M P E T I T I O N S H O R T O F W A R . The
United States continues to lag in developing and adequately funding strong institutions and programs for
informational, economic, and diplomatic statecraft. This priority includes building competition-related
capabilities in each of the military services and providing the resources, staff, and policies to sustain influ-
ence in international organizations and processes.

I N N O V A T I V E D E F E N S E S T R A T E G I E S A N D C O N C E P T S . Emerging approaches to warfare emphasize the

operational effect of aligning efforts across parts of the Joint force and multiple domains of activity. Con-
cepts for integrating military effects—concepts which remain largely theoretical today—are likely to be just
as important as the type or number of any single weapon system or capability.

S T R A T E G I E S A N D P O L I C I E S F O R W O R K I N G E F F E C T I V E L Y W I T H H E D G I N G P O W E R S . Many countries refuse to

take sides in the U.S. strategic competitions with China and Russia. Some of this hesitancy reflects states that
are concerned about China or Russia but also have illiberal political systems and clash with certain norms for
which the United States rightly stands. Yet U.S. strategy must develop more detailed, long-term, and flexible
strategies for working with leading hedging powers to avoid an unfavorable shift in geopolitical alignments.

As these examples suggest, the requirements for effective long-term competition are as much about institutional and policy
reform and effective strategy as they are about bigger budgets. The United States has the inherent systemic capacity to
compete effectively and has begun to make investments in needed areas of competitive advantage. The remaining steps
are especially challenging insofar as they demand that the United States confront entrenched institutional habits, take
calculated risks, and accept limits to some of its goals.
 | 43

BIBLIOGRAPHIC NOTE

The findings in this report are derived from research into hundreds of historical and theoretical treatments of competition as well as
extensive datasets on current and historical issues and the recent literature on Russian and Chinese approaches to competition. The
report’s findings reflect the subject matter expertise and professional judgment of the RAND project team in integrating this information;
this note specifies sources that support individual findings.

Page 6: H I S T O R Y A N D T H E O R Y O F C O M P E T I T I O N S
Our analysis was informed by the literature surveys and other research completed for a previous RAND study: Michael J. Mazarr, Jonathan
Blake, Abigail Casey, Tim McDonald, Stephanie Pezard, and Michael Spirtas, Understanding the Emerging Era of International Competition: Theoreti-
cal and Historical Perspectives, Santa Monica, Calif.: RAND Corporation, RR-2726-AF, 2018, which is available online at www.rand.org/t/RR2726.

We also drew on in-depth recent RAND case studies of strategic rivalries conducted for a forthcoming RAND study on the stability of stra-
tegic balances (Michael J. Mazarr, Samuel Charap, Abigail Casey, Irina A. Chindea, Christian Curriden, Alyssa Demus, Bryan Frederick, Arthur Chan,
John P. Godges, Eugeniu Han, et al., Stabilizing Great-Power Rivalries, Santa Monica, Calif.: RAND Corporation, RR-A456-1, 2021, available online
at www.rand.org/t/RRA456-1). Specifically, we reviewed and conducted new research on the following rivalries as examples of competition
(with selected references used for each):

• Great Britain–Germany
• Great Britain–France
• France-Germany
• China-Japan
• United States–Soviet Union
• United States–Great Britain

Additional and renewed research for this study surveyed the literature on international rivalry, great-power competition, power transition,
and competition. Leading sources included the following:

Colaresi, Michael P., Karen Rasler, and William R. Thompson, Strategic Rivalries in World Politics: Position, Space and Conflict Escalation, Cam-
bridge, UK: Cambridge University Press, 2008.

Diehl, Paul F., and Gary Goertz, War and Peace in International Rivalry, Ann Arbor, Mich.: University of Michigan Press, 2000.

Friedberg, Aaron L., The Weary Titan: Britain and the Experience of Relative Decline, 1895–1905, Princeton, N.J.: Princeton University Press, 2010.

Gaddis, John Lewis, “The Long Peace: Elements of Stability in the Postwar International System,” International Security, Vol. 10, No. 4, Spring 1986,
pp. 99–142.

________, Strategies of Containment: A Critical Appraisal of American National Security Policy During the Cold War, New York: Oxford University
Press, 2005.

Gilpin, Robert, War and Change in World Politics, Cambridge, UK: Cambridge University Press, 1981.

Jervis, Robert, “From Balance to Concert: A Study of International Security Cooperation,” World Politics, Vol. 38, No. 1, October 1985, pp. 58–79.

Kennedy, Paul, The Rise and Fall of the Great Powers, New York: Vintage Books, 1987.

Kupchan, Charles A., How Enemies Become Friends: The Sources of Stable Peace, Princeton, N.J.: Princeton University Press, 2010.

Lacey, James, ed., Great Strategic Rivalries: From the Classical World to the Cold War, New York: Oxford University Press, 2016.
44
| BIBLIOGRAPHIC NOTE

Lemke, Douglas, and William Reed, “War and Rivalry Among Great Powers,” American Journal of Political Science, Vol. 45, No. 2, April 2001, pp. 457–469.

Maoz, Zeev, and Ben D. Mor, Bound by Struggle: The Strategic Evolution of Enduring International Rivalries, Ann Arbor, Mich.: University of Michigan
Press, 2002.

Rasler, Karen, William R. Thompson, and Sumit Ganguly, How Rivalries End, Philadelphia, Pa.: University of Pennsylvania Press, 2013.

Shifrinson, Joshua R. Itzkowitz, Rising Titans, Falling Giants: How Great Powers Exploit Power Shifts, Ithaca, N.Y.: Cornell University Press, 2018.

Thompson, William R., “Identifying Rivals and Rivalries in World Politics,” International Studies Quarterly, Vol. 45, No. 4, December 2001, pp. 557–586.

Page 7 : W H A T T H E C O M P E T I T I O N I S A B O U T

Our assessment of the competitors’ interests and objectives in the present competition was derived from extensive RAND work on this
issue in the past several years, including the following:

Charap, Samuel, Alyssa Demus, and Jeremy Shapiro, eds., Getting Out from “In-Between”: Perspectives on the Regional Order in Post-Soviet Europe
and Eurasia, Santa Monica, Calif.: RAND Corporation, CF-382-CC/SFDFA, 2018. As of June 28, 2021:
https://www.rand.org/pubs/conf_proceedings/CF382.html

Charap, Samuel, Jeremy Shapiro, and Alyssa Demus, Rethinking the Regional Order for Post-Soviet Europe and Eurasia, Santa Monica, Calif.: RAND
Corporation, PE-297-CC/SFDFA, 2018. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE297.html

Charap, Samuel, Jeremy Shapiro, John Drennan, Oleksandr Chalyi, Reinhard Krumm, Yulia Nikitina, and Gwendolyn Sasse, eds., A Consensus Proposal
for a Revised Regional Order in Post-Soviet Europe and Eurasia, Santa Monica, Calif.: RAND Corporation, CF-410-CC, 2019. As of June 28, 2021:
https://www.rand.org/pubs/conf_proceedings/CF410.html

Chivvis, Christopher S., Andrew Radin, Dara Massicot, and Clint Reach, Strengthening Strategic Stability with Russia, Santa Monica, Calif.: RAND
Corporation, PE-234-OSD, 2017. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE234.html

Dobbins, James, David C. Gompert, David A. Shlapak, and Andrew Scobell, What’s the Potential for Conflict with China, and How Can It Be Avoided?
Santa Monica, Calif.: RAND Corporation, RB-9657-A, 2012. As of June 28, 2021:
https://www.rand.org/pubs/research_briefs/RB9657.html

Dobbins, James, Andrew Scobell, Edmund J. Burke, David C. Gompert, Derek Grossman, Eric Heginbotham, and Howard J. Shatz, Conflict with China
Revisited: Prospects, Consequences, and Strategies for Deterrence, Santa Monica, Calif.: RAND Corporation, PE-248-A, 2017. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE248.html

Dobbins, James, Howard J. Shatz, and Ali Wyne, Russia Is a Rogue, Not a Peer; China Is a Peer, Not a Rogue: Different Challenges, Different
Responses, Santa Monica, Calif.: RAND Corporation, PE-310-A, 2019. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE310.html

Frederick, Bryan, Matthew Povlock, Stephen Watts, Miranda Priebe, and Edward Geist, Assessing Russian Reactions to U.S. and NATO Posture
Enhancements, Santa Monica, Calif.: RAND Corporation, RR-1879-AF, 2017. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1879.html

Gompert, David C., and Hans Binnendijk, The Power to Coerce: Countering Adversaries Without Going to War, Santa Monica, Calif.: RAND Corporation,
RR-1000-A, 2016. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1000.html

Gompert, David C., Hans Binnendijk, and Bonny Lin, Blinders, Blunders, and Wars: What America and China Can Learn, Santa Monica, Calif.:
RAND Corporation, RR-768-RC, 2014. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR768.html
 | 45

Gompert, David C., Astrid Stuth Cevallos, and Cristina L. Garafola, War with China: Thinking Through the Unthinkable, Santa Monica, Calif.:
RAND Corporation, RR-1140-A, 2016. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1140.html

Larrabee, F. Stephen, Stephanie Pezard, Andrew Radin, Nathan Chandler, Keith Crane, and Thomas S. Szayna, Russia and the West After the
Ukrainian Crisis: European Vulnerabilities to Russian Pressures, Santa Monica, Calif.: RAND Corporation, RR-1305-A, 2017. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1305.html

Mazarr, Michael J., Timothy R. Heath, and Astrid Stuth Cevallos, China and the International Order, Santa Monica, Calif.: RAND Corporation,
RR-2423-OSD, 2018. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2423.html

Oliker, Olga, Christopher S. Chivvis, Keith Crane, Olesya Tkacheva, and Scott Boston, Russian Foreign Policy in Historical and Current Context:
A Reassessment, Santa Monica, Calif.: RAND Corporation, PE-144-A, 2015. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE144.html

Pettyjohn, Stacie L., and Becca Wasser, Competing in the Gray Zone: Russian Tactics and Western Responses, Santa Monica, Calif.:
RAND Corporation, RR-2791-A, 2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2791.html

Pezard, Stephanie, Andrew Radin, Thomas S. Szayna, and F. Stephen Larrabee, European Relations with Russia: Threat Perceptions, Responses, and
Strategies in the Wake of the Ukrainian Crisis, Santa Monica, Calif.: RAND Corporation, RR-1579-A, 2017. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1579.html

Pezard, Stephanie, and Ashley L. Rhoades, What Provokes Putin’s Russia? Deterring Without Unintended Escalation, Santa Monica, Calif.:
RAND Corporation, PE-338-A, 2020. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE338.html

Radin, Andrew, and Clint Reach, Russian Views of the International Order, Santa Monica, Calif.: RAND Corporation, RR-1826-OSD, 2017. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1826.html

Shlapak, David A., The Russian Challenge, Santa Monica, Calif.: RAND Corporation, PE-250-A, 2018. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE250.html

Pages 10–13: U N D E R S T A N D I N G T H E C O N T E X T F O R C O M P E T I T I O N

In addition to other work cited in this note, our conclusions were shaped by numerous RAND studies specifically outlining trends in the
national security context, including the following:

Cohen, Raphael S., Nathan Chandler, Shira Efron, Bryan Frederick, Eugeniu Han, Kurt Klein, Forrest E. Morgan, Ashley L. Rhoades, Howard J. Shatz,
and Yuliya Shokh, The Future of Warfare in 2030: Project Overview and Conclusions, Santa Monica, Calif.: RAND Corporation, RR-2849-/1-AF, 2020.
As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2849z1.html

Cohen, Raphael S., Eugeniu Han, and Ashley L. Rhoades, Geopolitical Trends and the Future of Warfare: The Changing Global Environment and Its
Implications for the U.S. Air Force, Santa Monica, Calif.: RAND Corporation, RR-2849/2-AF, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2849z2.html

Cohen, Raphael S., and Andrew Radin, Russia’s Hostile Measures in Europe: Understanding the Threat, Santa Monica, Calif.: RAND Corporation,
RR-1793-A, 2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1793.html
46
| BIBLIOGRAPHIC NOTE

Connable, Ben, Jason H. Campbell, and Dan Madden, Stretching and Exploiting Thresholds for High-Order War: How Russia, China, and Iran Are
Eroding American Influence Using Time-Tested Measures Short of War, Santa Monica, Calif.: RAND Corporation, RR-1003-A, 2016. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1003.html

Connable, Ben, Stephanie Young, Stephanie Pezard, Andrew Radin, Raphael S. Cohen, Katya Migacheva, and James Sladden, Russia’s Hostile Mea-
sures: Combating Russian Gray Zone Aggression Against NATO in the Contact, Blunt, and Surge Layers of Competition, Santa Monica, Calif.: RAND
Corporation, RR-2539-A, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2539.html

Harold, Scott W., Derek Grossman, Brian Harding, Jeffrey W. Hornung, Gregory Poling, Jeffrey Smith, and Meagan L. Smith, The Thickening Web of
Asian Security Cooperation: Deepening Defense Ties Among U.S. Allies and Partners in the Indo-Pacific, Santa Monica, Calif.: RAND Corporation,
RR-3125-MCF, 2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR3125.html

Long, Duncan, Terence Kelly, David C. Gompert, eds., Smarter Power, Stronger Partners, Volume II: Trends in Force Projection Against Potential
Adversaries, Santa Monica, Calif.: RAND Corporation, RR-1359/1-A, 2017. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1359z1.html

Morris, Lyle J., Michael J. Mazarr, Jeffrey W. Hornung, Stephanie Pezard, Anika Binnendijk, and Marta Kepe, Gaining Competitive Advantage in the
Gray Zone: Response Options for Coercive Aggression Below the Threshold of Major War, Santa Monica, Calif.: RAND Corporation, RR-2942-OSD,
2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2942.html

Robinson, Linda, Todd C. Helmus, Raphael S. Cohen, Alireza Nader, Andrew Radin, Madeline Magnuson, and Katya Migacheva, Modern Political
Warfare: Current Practices and Possible Responses, Santa Monica, Calif.: RAND Corporation, RR-1772-A, 2018. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1772.html

Watts, Stephen, Nathan Beauchamp-Mustafaga, Benjamin N. Harris, and Clint Reach, Alternative Worldviews: Understanding Potential Trajectories of
Great-Power Ideological Competition, Santa Monica, Calif.: RAND Corporation, RR-2982-NIC, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2982.html

We also reviewed several external trend analyses. For the calculation of projected GDP of guiding coalition members on page 13, we relied
on various sources.

For consistency, both the 2020 numbers and 2035 projection are drawn from the Centre for Economics and Business Research, World Economic
League Table 2021, London, December 2020. To contextualize those projections and gain added insight into future GDPs, we relied on PwC, The
World in 2050, London, 2017; Organisation for Economic Co-operation and Development, The Long View: Scenarios for the World Economy to 2060,
Paris, 2018; Richard N. Cooper, “Prospects for the World Economy in 2035,” working paper, Department of Economics, Harvard University, October
2014; and Uri Dadush and Bennett Stancil, The World Order in 2050, Washington, D.C.: Carnegie Endowment for International Peace, April 2010.

Any such projections necessarily rely on many assumptions. Different projections use different calculations of GDP, not only between market
exchange and purchasing power parity measures but also in terms of current versus constant dollars and other measurement choices that can
dramatically affect total numbers over the long term. This figure is meant only to suggest large-scale economic power relations among China, Russia,
and the guiding coalition, not to represent a precise economic analysis or forecast. In this projection, we represent China’s 2035 total as a range, for
example, because of significant gaps in assumptions made by a number of existing projections (including the official targets of the Chinese govern-
ment’s economic plan) and because of the poor quality of much data on the Chinese economy.
 | 47

Pages 14–15: M E A S U R E S O F N A T I O N A L P O W E R A N D C O M P E T I T I V E N E S S

To identify these measures we reviewed an extensive literature on national power and the ways of assessing it, including the following:

Cline, Ray S., World Power Assessment: A Calculus of Strategic Drift, Boulder, Colo.: Westview Press, 1975.
Correlates of War Project, National Material Capabilities, ver. 5.0, dataset. As of June 28, 2021:
http://www.correlatesofwar.org/data-sets/national-material-capabilities

German, F. Clifford, “A Tentative Evaluation of World Power,” Journal of Conflict Resolution, Vol. 4, No. 1, 1960, pp. 138–144.

Heim, Jacob L., and Benjamin M. Miller, Measuring Power, Power Cycles, and the Risk of Great-Power War in the 21st Century, Santa Monica, Calif.:
RAND Corporation, RR-2989-RC, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2989.html

Kadera, Kelly, and Gerald Sorokin, “Measuring National Power,” International Interactions, Vol. 30, No. 3, 2004, pp. 211–230.

Kim, Hyung Min, “Comparing Measures of National Power,” International Political Science Review, Vol. 31, No. 4, 2010, pp. 405–427.

Kim, Woosang, “Power Transitions and Great Power War from Westphalia to Waterloo,” World Politics, Vol. 45, No. 1, October 1992, pp. 153–172.

Kroenig, Matthew, “Dominant Democracies: The Domestic Sources of International Power,” Georgetown University, 2019.

Lemke, Douglas, Regions of War and Peace, Cambridge, UK: Cambridge University Press, 2002.

Lowy Institute, Asia Power Index, dataset, 2019. As of June 28, 2021:
https://power.lowyinstitute.org

Merritt, R. L., and Dina A. Zinnes, “Alternative Indexes of National Power,” in Richard J. Stoll and Michael D. Ward, eds., Power in World Politics,
Boulder, Colo.: Lynne Rienner, 1989.

Merritt, Richard L., and Dina A. Zinnes, Validity of Power Indices. International Interactions, Vol. 14, No. 2, 1988.

Moyer, Jonathan D., Tim Sweijs, Mathew J. Burrows, and Hugo Van Manen, Power and Influence in a Globalized World, Washington, D.C.:
Atlantic Council, 2018.

Singer, J. David, Stuart Bremer, and John Stuckey, “Capability Distribution, Uncertainty, and Major Power War, 1820–1965,” in Bruce M. Russett, ed.,
Peace, War, and Numbers, Beverly Hills, Calif.: Sage, 1972, pp. 19–48.

Tellis, Ashley J., Janice Bially, Christopher Layne, and Melissa McPherson, Measuring National Power in the Postindustrial Age, Santa Monica, Calif.:
RAND Corporation, MG-1100-A, 2000. As of June 28, 2021:
https://www.rand.org/pubs/monograph_reports/MR1110.html

Treverton, Gregory F., and Seth G. Jones, Measuring National Power, Santa Monica, Calif.: RAND Corporation, CF-215, 2005. As of June 28, 2021:
https://www.rand.org/pubs/conf_proceedings/CF215.html

Page 16: O V E R A L L P R O D U C T I V E C A P A C I T Y

Sources for these data are given in the relevant figures and include the following:

Organisation for Economic Co-operation and Development, OECD Economic Outlook: Statistics and Projections, Long-Term Baseline Projections,
No. 103, dataset, 2019.

PwC, The World in 2050, London, 2017.

World Bank, World Development Indicators, dataset.

48
| BIBLIOGRAPHIC NOTE

Page 17: N O T A S I M P L I S T I C S T O R Y O F P O W E R T R A N S I T I O N

Background sources on power transition include the following:

Efird, Brian, Jacek Kugler, and Gaspare Genna, “From War to Integration: Generalizing Power Transition Theory,” International Interactions, Vol. 29,
No. 4, 2003, pp. 293–313.

Goldstein, Avery, “Power Transitions, Institutions, and China’s Rise in East Asia: Theoretical Expectations and Evidence,” Journal of Strategic Studies,
Vol. 30, Nos. 4–5, 2007, pp. 639–682.

Houweling, Henk, and Jan G. Siccama, “Power Transitions as a Cause of War,” Journal of Conflict Resolution, Vol. 32, No. 1, 1988, pp. 87–102.

Kim, Woosang, “Power Transitions and Great Power War from Westphalia to Waterloo,” World Politics, Vol. 45, No. 1, October 1992, pp. 153–172.

Kim, Woosang, and James D. Morrow, “When Do Power Shifts Lead to War?” American Journal of Political Science, Vol. 36, No. 4, November 1992,
pp. 896–922.

Kugler, Jacek, and. A. F. K. Organski, “The Power Transition: A Retrospective and Prospective Evaluation,” in Manus I. Midlarsky, ed., The Handbook
of War Studies, Boston, Mass.: Unwin Hyman, 1989, pp. 171–194.

Lebow, Richard Ned, and Benjamin Valentino, “Lost in Transition: A Critical Analysis of Power Transition Theory,” International Relations, Vol. 23, No. 3,
2009, pp. 389–410.

Rapkin, David, and William Thompson, “Power Transition, Challenge and the (Re)Emergence of China,” International Interactions, Vol. 29, No. 4,
2003, pp. 315–342.

Schake, Kori, Safe Passage: The Transition from British to American Hegemony, Cambridge, Mass.: Harvard University Press, 2017.

Sobek, David, and Jeremy Wells, “Dangerous Liaisons: Dyadic Power Transitions and the Risk of Militarized Disputes and Wars,” Canadian Journal of
Political Science, Vol. 46, No. 1, March 2013, pp. 69–92.

Tammen, Ronald L., Jacek Kugler, Douglas Lemke, Allan C. Stam III, Mark Abdollahian, Carole Alsharabati, Brian Efird, and A. F. K. Organski, Power
Transitions: Strategies for the 21st Century, Washington, D.C.: CQ Press, 2000.

Data for the graphics comes from sources specified in the figures, including the following:

Credit Suisse Research Institute, “Wealth Trends 2000–18,” Global Wealth Databook, Zurich, Switzerland, October 2018, pp. 18–109.

International Monetary Fund, World Economic Outlook, dataset, October 2018.

Scissors, Derek, China’s Global Business Footprint Shrinks, Washington, D.C.: American Enterprise Institute, July 2019.

United Nations, World Population Prospects, dataset, 2019.

World Bank, World Development Indicators, dataset.

Page 19: C H I N A ’ S T E C H N O L O G Y S T A N D I N G

Some of the direct sources for the numbers cited in the graphs are listed on that page. More general recent treatments of the strengths and
weaknesses of China’s technology advances include the following:

Banerjee, Ishan, and Matt Sheehan, “America’s Got AI Talent: US’ Big Lead in AI Research Is Built on Importing Researchers,” MacroPolo, July 9, 2020.

Castro, Daniel, Michael McLaughlin, and Eline Chivot, Who Is Winning the AI Race: China, the EU or the United States? Washington, D.C.: Center for
Data Innovation, August 19, 2019.

Frey, Carl Benedikt, and Michael Osborne, “China Won’t Win the Race for AI Dominance,” Foreign Affairs, June 19, 2020.

Gerwitz, Julian Baird, “China’s Long March to Technological Supremacy,” Foreign Affairs, August 27, 2019.

Kennedy, Scott, ed., China’s Uneven High-Tech Drive: Implications for the United States, Washington, D.C.: Center for Strategic and International
Studies, February 2020.
 | 49

Silberglitt, Richard, James T. Bartis, Brian G. Chow, David L. An, and Kyle Brady, Critical Materials: Present Danger to U.S. Manufacturing, Santa
Monica, Calif.: RAND Corporation, RR-133-NIC, 2013. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR133.html

Tortoise Consulting, The Global AI Index, dataset, 2020.

Page 21: R U S S I A A N D C H I N A S O C I A L A N D E C O N O M I C C H A L L E N G E S

Crane, Keith, Shanthi Nataraj, Patrick B. Johnston, and Gursel Rafig oglu Aliyev, Russia’s Medium-Term Economic Prospects, Santa Monica, Calif.:
RAND Corporation, RR-1468-RC, 2016. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1468.html

Crane, Keith, Olga Oliker, and Brian Nichiporuk, Trends in Russia’s Armed Forces: An Overview of Budgets and Capabilities, Santa Monica, Calif.:
RAND Corporation, RR-2573-A, 2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2573.html

Curran, Edna, “China’s Debt Bomb,” Bloomberg, September 17, 2018.

Di Bella, Gabriel, Oksana Dynnikova, and Slavi Slavov, The Russian State’s Size and its Footprint: Have They Increased? Washington, D.C.:
International Monetary Fund, WP/19/53, March 2, 2019.

Petterson, Trude, “Russia Loses $600 Billion on Sanctions and Low Oil Prices,” Barents Observer, February 5, 2016.

Rothschild, Viola, “China’s Pension System Is Not Aging Well,” The Diplomat, March 9, 2016.

United Nations, World Population Prospects, dataset, 2019.

Welt, Cory, Kristin Archick, Rebecca M. Nelson, and Dianne E. Rennack, U.S. Sanctions on Russia, Washington, D.C.: Congressional Research
Service, January 17, 2020.

World Bank Group, Weaker Global Outlook Sharpens Focus on Domestic Reforms, Washington, D.C., Russia Economic Report No. 42, December 2019.

Page 22: N A T I O N A L I N S T I T U T I O N S

Sources for the data on national institutional quality are cited in the graphics on the page and rely largely on several World Bank indexes of
governance quality. Broader sources that we relied upon in our assessment of the role of institutions in competition include the following:

Carment, David, “Assessing State Failure: Implications for Theory and Policy,” Third World Quarterly, Vol. 24, No. 3, 2003.

Collier, Paul, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, New York: Oxford University Press, 2007.

Easterly, William, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics, Cambridge, Mass.: MIT Press, 2001.

Glaeser, Edward L., Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer, “Do Institutions Cause Growth?” Journal of Economic Growth,
Vol. 9, No. 3, September 2004, pp. 271–303.

Mokyr, Joel, A Culture of Growth: The Origins of the Modern Economy, Princeton, N.J.: Princeton University Press, 2017.

North, Douglass C., Institutions, Institutional Change and Economic Performance, Cambridge, UK: Cambridge University Press, 1990.

Olson, Mancur, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities, New Haven, Conn.: Yale University Press, 1982.

Pages 24–25: S O U R C E S O F M I L I T A R Y A D V A N T A G E

Sources that contributed to our thinking on these emerging components of military competition include the following:

Arquilla, John, and David Ronfeldt, Swarming and the Future of Conflict, Santa Monica, Calif.: RAND Corporation, DB-311-OSD, 2000. As of June 28, 2021:
https://www.rand.org/pubs/documented_briefings/DB311.html
50
| BIBLIOGRAPHIC NOTE

Biddle, Stephen, Military Power: Explaining Victory and Defeat in Modern Battle, Princeton, N.J.: Princeton University Press, 2006.

Bidwell, Christopher A., and Bruce W. MacDonald, Emerging Disruptive Technologies and Their Potential Threat to Strategic Stability and National
Security, Washington, D.C.: Federation of American Scientists, September 2018.

Boston, Scott, and Dara Massicot, The Russian Way of Warfare: A Primer, Santa Monica, Calif.: RAND Corporation, PE-231-A, 2017. As of June 28, 2021:
https://www.rand.org/pubs/perspectives/PE231.html

Brose, Christian, The Kill Chain: Defending America in the Future of High-Tech Warfare, New York: Hachette Books, 2020.

Engstrom, Jeffrey, Systems Confrontation and System Destruction Warfare: How the Chinese People’s Liberation Army Seeks to Wage Modern
Warfare, Santa Monica, Calif.: RAND Corporation, RR-1708-OSD, 2018. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1708.html

Heath, Timothy R., Kristen Gunness, and Cortez A. Cooper III, The PLA and China’s Rejuvenation: National Security and Military Strategies,
Deter­rence Concepts, and Combat Capabilities, Santa Monica, Calif.: RAND Corporation, RR-1402-OSD, 2016. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1402.html

Heginbotham, Eric, Michael Nixon, Forrest E. Morgan, Jacob L. Heim, Jeff Hagan, Sheng Li, Jeffrey Engstrom, Martin C. Libicki, Paul DeLuca, David A.
Shlapak, David R. Frelinger, Burgess Laird, Kyle Brady, and Lyle J. Morris, The U.S.-China Military Scorecard: Forces, Geography, and the Evolving
Balance of Power, 1996–2017, Santa Monica, Calif.: RAND Corporation, RR-392-AF, 2015. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR392.html

Horowitz, Michael C., “When Speed Kills: Lethal Autonomous Weapon Systems, Deterrence and Stability,” Journal of Strategic Studies, Vol. 42,
No. 6, 2019, pp. 764–788.

Lieber, Keir A., War and the Engineers: The Primacy of Politics over Technology, Ithaca, N.Y.: Cornell University Press, 2008.

Mazarr, Michael J., Ryan Michael Bauer, Abigail Casey, Sarah Anita Heintz, and Luke J. Matthews, The Emerging Risk of Virtual Societal Warfare:
Social Manipulation in a Changing Information Environment, Santa Monica, Calif.: RAND Corporation, RR-2714-OSD, 2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2714.html

McFate, Sean, The New Rules of War: Victory in the Age of Durable Disorder, New York: Morrow, 2018.

Radin, Andrew, Lynn. E. Davis, Edward Geist, Eugeniu Han, Dara Massicot, Matthew Povlock, Clint Reach, Scott Boston, Samuel Charap, William
Mackenzie, Katya Migacheva, Trevor Johnston, and Austin Long, The Future of the Russian Military: Russia’s Ground Combat Capabilities and
Implications for U.S.-Russia Competition, Santa Monica, Calif.: RAND Corporation, RR-3099-A, 2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR3099.html

Scharre, Paul, Army of None: Autonomous Weapons and the Future of War, New York: W. W. Norton, 2019.

Schwab, Klaus, The Fourth Industrial Revolution, New York: Crown Business, 2017.

Sechser, Todd S., Neil Narang, and Caitlin Talmadge, “Emerging Technologies and Strategic Stability in Peacetime, Crisis, and War,” Journal of
Strategic Studies, Vol. 42, No. 6, 2019, pp. 727–735.

U.S. Department of Defense, Defense Innovation Unit, Annual Report 2018, Washington, D.C., 2018.

Page 28: E C O N O M I C P O S T U R E A N D E N G A G E M E N T

China Power Team, “Is China the World’s Top Trader?” China Power Project, Center for Strategic and International Studies, August 25, 2020.

________, “How Dominant Are Chinese Companies Globally?” China Power Project, Center for Strategic and International Studies, May 5, 2021.

United Nations, Comtrade Database.

World Bank, World Integrated Trade Solution, Country Exports by Country and Region 2017, dataset, 2017.
 | 51

Page 29: C H I N A ’ S E C O N O M I C S T A T E C R A F T A N D I N F L U E N C E

The basic data here comes from World Bank, World Development Indicators. Other sources consulted to inform our findings include the following:

Allen, Kenneth, Phillip C. Saunders, and John Chen, Chinese Military Diplomacy, 2003–2016: Trends and Implications, Washington, D.C.: National
Defense University Press, China Strategic Perspectives 11, 2017.

Jones, Lee, and Shahar Hameiri, Debunking the Myth of ‘Debt-Trap Diplomacy’: How Recipient Countries Shape China’s Belt and Road Initiative,
London: Chatham House, 2020.

Lu, Hui, Charlene Rohr, Marco Hafner, and Anna Knack, China Belt and Road Initiative: Measuring the Impact of Improving Transportation Connectivi-
ty on Trade in the Region, Santa Monica, Calif.: RAND Corporation, RR-2625-RC, 2018. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2625.html

Scobell, Andrew, Bonny Lin, Howard J. Shatz, Michael Johnson, Larry Hanauer, Michael S. Chase, Astrid Stuth Cevallos, Ivan W. Rasmussen, Arthur
Chan, Aaron Strong, Eric Warner, and Logan Ma, At the Dawn of Belt and Road: China in the Developing World, Santa Monica, Calif.: RAND Corpo-
ration, RR-2273-A, 2018. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2273.html

Scobell, Andrew, and Alireza Nader, China in the Middle East: The Wary Dragon, Santa Monica, Calif.: RAND Corporation, RR-1229-A, 2016. As of
June 28, 2021:
https://www.rand.org/pubs/research_reports/RR1229.html

Scobell, Andrew, Ely Ratner, and Michael Beckley, China’s Strategy Toward South and Central Asia: An Empty Fortress, Santa Monica, Calif.: RAND
Corporation, RR-525-AF, 2014. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR525.html

Pages 30–31: A L I G N M E N T O F K E Y P A R T N E R S

Our analysis of this issue was informed by a slate of recent RAND studies on the perspectives and approaches to competition of key states.
This work has involved extensive secondary work, as well as in-person and virtual field work interviewing officials, scholars, and experts in
key countries. Some of this work remains ongoing, but several published examples include the following:

Chase, Michael S., and Jennifer D. P. Moroney, Regional Responses to U.S.-China Competition in the Indo-Pacific: Australia and New Zealand, Santa
Monica, Calif.: RAND Corporation, RR-4412/1-AF, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR4412z1.html

Cooper, Cortez A. III, and Michael S. Chase, Regional Responses to U.S.-China Competition in the Indo-Pacific: Singapore, Santa Monica, Calif.:
RAND Corporation, RR-4412/5-AF, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR4412z5.html

Grossman, Derek, Regional Responses to U.S.-China Competition in the Indo-Pacific: Vietnam, Santa Monica, Calif.: RAND Corporation,
RR-4412/6-AF, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR4412z6.html

Harold, Scott W., Regional Responses to U.S.-China Competition in the Indo-Pacific: Japan, Santa Monica, Calif.: RAND Corporation, RR-4412/4-AF,
2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR4412z4.html

Harold, Scott W., Derek Grossman, Brian Harding, Jeffrey W. Hornung, Gregory Poling, Jeffrey Smith, and Meagan L. Smith, The Thickening Web of
Asian Security Cooperation: Deepening Defense Ties Among U.S. Allies and Partners in the Indo-Pacific, Santa Monica, Calif.: RAND Corporation,
RR-3125-MCF, 2019. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR3125.html
52
| BIBLIOGRAPHIC NOTE

Hornung, Jeffrey W., Allies Growing Closer: Japan-Europe Security Ties in the Age of Strategic Competition, Santa Monica, Calif.: RAND Corporation,
RR-A186-1, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RRA186-1.html

Lin, Bonny, Michael S. Chase, Jonah Blank, Cortez A. Cooper III, Derek Grossman, Scott W. Harold, Jennifer D. P. Moroney, Lyle J. Morris, Logan Ma,
Paul Orner, Alice Shih, and Soo Kim, Regional Responses to U.S.-China Competition in the Indo-Pacific: Study Overview and Conclusions,
Santa Monica, Calif.: RAND Corporation, RR-4412-AF, 2020. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR4412.html

Morris, Lyle J., and Giacomo Persi Paoli, A Preliminary Assessment of Indonesia’s Maritime Security Threats and Capabilities, Santa Monica, Calif.:
RAND Corporation, RR-2469-RC, 2018. As of June 28, 2021:
https://www.rand.org/pubs/research_reports/RR2469.html

Pages 32–33: I D E O L O G I C A L A N D P A R A D I G M A T I C I N F L U E N C E

These findings rely on extensive research conducted for a component of this project dealing with the U.S.-China competition for influence.
It involved collecting data in the categories described on these pages (and others), and review of a range of sources on the character of
influence. These included the following:

Allan, Bentley B., Srdjan Vucetic, and Ted Hopf, “The Distribution of Identity and the Future of International Order: China’s Hegemonic Prospects,”
International Organization, Vol. 72, No. 4, Fall 2018, pp. 839–869.

Allen, Kenneth, Phillip C. Saunders, and John Chen, Chinese Military Diplomacy, 2003–2016: Trends and Implications, Washington, D.C.:
National Defense University Press, China Strategic Perspectives 11, 2017.

Bachrach, Peter, and Morton S. Baratz, “Two Faces of Power,” American Political Science Review, Vol. 56, No. 4, December 1962, pp. 947–952.

Brady, Anne-Marie, “Magic Weapons: China’s Political Influence Activities Under Xi Jinping,” paper presented at the Corrosion of Democracy under
China’s Global Influence conference, Arlington, Va., September 16–17, 2017.

Diamond, Larry, and Orville Schell, eds., Chinese Influence and American Interests: Promoting Constructive Vigilance, Stanford, Calif.: Hoover Institution
Press, 2019.

Grewal, David Singh, Network Power: The Social Dynamics of Globalization, New Haven, Conn.: Yale University Press, 2008.

Harrell, Peter, Elizabeth Rosenberg, and Edoardo Saravalle, China’s Use of Coercive Economic Measures, Washington, D.C.: Center for a New American
Security, June 2018.

Kennedy, Scott, “The Myth of the Beijing Consensus,” Journal of Contemporary China, Vol. 19, No. 65, 2010, pp. 461–477.

Koleski, Katherine, and Alec Blivas, China’s Engagement with Latin America and the Caribbean, Washington, D.C.: U.S.-China Economic and Security
Review Commission, October 17, 2018.

Le Corre, Philippe, China’s Rise as a Geoeconomic Influencer: Four European Case Studies, Washington, D.C.: Carnegie Endowment for International
Peace, October 2018.

Lukes, Steven, Power: A Radical View, 2nd ed., New York: Palgrave Macmillan, 2005.

Mattis, Peter, and Alex Joske, “The Third Magic Weapon: Reforming China’s United Front,” War on the Rocks, June 24, 2019.

Meick, Ethan, Michelle Ker, and Han May Chan, China’s Engagement in the Pacific Islands: Implications for the United States, Washington, D.C.:
U.S.-China Economic and Security Review Commission, June 14, 2018.

Moyer, Jonathan D., Tim Sweijs, Mathew J. Burrows, and Hugo Van Manan, Power and Influence in a Globalized World, Washington, D.C.:
Atlantic Council, January 2018.

Nye, Joseph S., Jr., Soft Power: The Means to Success in World Politics, New York: Public Affairs, 2004.

IMAGE CREDITS
Front and Back Cover: Flickr Creative Commons/Uwe Brodrecht,
RAND illustration, p. 6 Funkidslive.com, Edinburgh Geographical
Institute/John Bartholomew, pp. 10–11 Historical painting/public
domain, pp. 14–15 Getty Images/Nikada, p. 25 Defense Advanced
Research Projects Agency, WII photo/public domain, pp. 26–27
The World/ Peter Macdiarmid, pp. 36–37 Gettyimages/Phipell,
p. 42 Flickr/XoMEoX, BAE Systems, p. 43 DoD/Dominique A. Pineiro,
UN/Jean-Marc Ferré, p. 44 Flickr/Christopher Michel CC, United
States Mission Geneva/Flickr, p. 45 Getty Images/Nikada
| 53
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ABOUT THIS REPORT

The U.S. strategic focus has increasingly turned to major-power competition, but there is currently no framework
for understanding U.S. competition with near-peer rivals China and Russia. U.S. competitive success requires a
broad-based understanding of the economic, geopolitical, and military dimensions of these rivalries coupled with
strategic policy action and investment.

The research reported here was completed in June 2021 and underwent security review with the sponsor and the
Defense Office of Prepublication and Security Review before public release.

This research was sponsored by the Office of the Deputy Assistant Secretary of Defense for Force Development
and Strategy in the Office of the Secretary of Defense. It was conducted within the International Security and
Defense Policy Center of the RAND National Security Research Division (NSRD), which operates the National
Defense Research Institute (NDRI), a federally funded research and development center sponsored by the Office
of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the
defense agencies, and the defense intelligence enterprise.

For more information on the RAND International Security and Defense Policy Center, see www.rand.org/nsrd/
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