ABSTRACT

The rise of China and relative decline of the US during the 2000s and 2010s took the US decline debate down a familiar turn. Understanding the US grand strategic response to decline and the rise of China requires an appreciation of domestic economic challenges and foreign military commitments. Central to this has been the extent to which the rise of China has contributed to the relative decline of the US, and the latter’s responses. However, the role of security externalities of US trade imbalances with China and the rest of the world in light of the US decline debate remained largely unexplored. This chapter adopts a neoclassical realist framework to understand how a combination of security and economic factors affected American grand strategic adjustments towards China over the past quarter-century. This chapter demonstrates how the US responded to its relative decline by offsetting security losses via expanding trade with other East Asian states. It is argued that, for security reasons, domestic economic interests, which pressured the White House to seek more economic integration in East Asia, resulted in an agenda of American-led East Asian economic integration at the discrimination and perhaps even exclusion of China. The analysis in this chapter has implications for understanding how the US responds to its relative decline and perceives that the rise of China is of central importance to future debate, and for extending our understanding of the role that trade imbalances play in American grand strategy.