The Derisking Race

The United States and China are engaged in what can best be described as a derisking race. Having encouraged their economies to become deeply intertwined, each nation is now attempting to achieve significant separation from the other. Neither side currently seeks to decouple completely. Instead, each is trying to alter the terms of their economic relationship, reducing its own vulnerability to leverage, coercion or attacks that could damage its prosperity and security, while working to maintain or acquire advantages over its counterparty.

In this Adelphi book, Aaron Friedberg argues that the derisking race is thus a struggle for power, waged in the realms of trade, investment and technology development; it is the economic dimension of the all-encompassing political, military and ideological ‘systemic rivalry’ now under way. How the race plays out will be crucial to determining the outcome of the larger geopolitical contest of which it is part. As it intensifies, it will also reshape the world economy, halting the trend towards ever-tighter integration and fracturing the global system, most likely into a cluster of partially closed blocs. While its pace and outcome have yet to be determined, this process of fragmentation has already begun.