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Good US-China Strategic Competition

If the US and China fight a zero-sum battle for long-term technological dominance, they will both fail, impeding technological progress and economic growth everywhere. They are far better off striving to reach or remain at the frontier of innovation, without preventing others from challenging them.

MILAN – It is now widely accepted that the economic and technological relationship between the United States and China will be characterized by some combination of strategic cooperation and strategic competition. Strategic cooperation is largely welcomed, because addressing shared challenges, from climate change and pandemics to the regulation of cutting-edge technologies, demands the engagement of the world’s two largest economies. But strategic competition tends to be viewed as a worrisome, even threatening, prospect. It need not be.

Anxiety about Sino-American competition, particularly in the technological domain, reflects a belief on both sides that a national-security-based, largely zero-sum approach is inevitable. This assumption steers decision-making in an unconstructive, confrontational direction and increases the likelihood of policy mistakes.

In reality, there are good and bad forms of strategic competition. To understand the benefits of good competition – and how to reap them – one need only consider how competition fuels innovation within economies.

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