CAMBRIDGE – Two society hostesses are rivals. Both guard their social standing jealously – and may even punish a guest who attends the other’s party by withholding future invitations.
China and the United States seem to regard Asia-Pacific relations similarly: as a zero-sum game. Are countries signing up for China’s Asian Infrastructure Investment Bank (AIIB), or for America’s Trans-Pacific Partnership (TPP)? Will China be welcomed, or humiliatingly rebuffed, in its effort to persuade the International Monetary Fund to include the renminbi in its unit of account, Special Drawing Rights (SDR)? Is the US still the world’s largest economy, or did China surpass it in 2014?
However tempting it may be to focus on such questions, they are the wrong way to think about the global economy. There is no reason why some countries should not join both China’s AIIB and America’s TPP, or why overlapping memberships should not expand over time – or, indeed, why the hostesses should not eventually attend each other’s parties.
Unfortunately, that is not how current issues of global economic governance are being framed. When the United Kingdom, Germany, South Korea, Australia, and others unexpectedly decided in March to join the AIIB, it was widely reported (partly because of missteps by US policymakers) as a mass defection of US allies to a rival’s party.