Growing Chinese economic power and the exacerbating effects of U.S. economic interdependence

A project funded by the Department of Defense Minerva Research Initiative, administered by the Air Force Office of Scientific Research

The foundation of U.S. power is its economy and that economy is critically dependent on a stable international order. Yet, globalization of trade and technological advancement over the past two decades have created an international economic system that poses several significant and interrelated threats to U.S. national security.

First, the interdependent nature of this system is a source, not only of strength, but also of vulnerability. The global nature of today’s economic systems means a disruption in one place can swiftly cascade across the world, disrupting global supply chains and national economies. Second, global economic interdependence has virtually replaced linear chains of cause and effect with a complex network of causal impacts. U.S. national policies such as tariffs, which once had largely predictable outcomes, now often lead to unanticipated and undesirable consequences for the U.S. economy. Third, the current structure of global economic systems exposes the U.S. to potential acts of coercion and extortion by other countries, including key trading partners. China, in particular, is increasingly adept at using such economic weapons.

However, in the peer-reviewed academic literature there exist two competing views of how interdependence affects the vulnerability and resilience of social systems. While one school highlights the benefits of interdependence, and even promotes economic interdependence as a path to global peace, a second school focuses on the dangers of deep interdependence. This lack of consensus has persisted for years with little progress towards generalizable theories. If knowledge in this area is to progress these divergent viewpoints must be reconciled.

This project addresses this intellectual discord and associated security needs by examining how economic interdependence induces vulnerability and creates threats to national security. We will construct (1) quantified metrics, models, and indices of global economic system and industrial sectoral vulnerability, and (2) a multilayer network analysis of U.S. interdependence with China and how those networks combine to exacerbate system vulnerabilities.

Output will include published research papers, public events, new decision support tools, and a suite of metrics useful for assessing and managing the resilience and vulnerability of networked social systems. We expect this output to impact two key communities. First, we expect to make significant contributions to basic social science by elucidating and quantifying the negative impacts of interdependence on social and economic systems. Benefitting disciplines include political science/international relations, social network science, economics, and complex systems science. Second, we expect to impact the national defense and security communities by (1) enabling policy makers to anticipate the security impacts of proposed economic policies and by (2) creating a methodology to identify industries and countries that create trade-related vulnerabilities for the U.S. economy.

Partners

(Lead)

Project members

Erwann Guettouche

Miles Mcanulty

Kayleigh Steele

Gabriel White

Project output

Peer-reviewed publications

SO Altiparmak, CG Thies, ST Shutters, K Waters (2023) Inducing New Bilateral Oil Interdependencies: The unintended impact of 2014 US-led sanctions on Russia. Journal of Indo-Pacific Affairs 6(3):154-165 link
M Rogov, C Rozenblat, M Bida, ST Shutters (2022) Evaluating multi-level resilience of Russian urban economies 2010-2019. Ecology and Society 27(4):37, doi:10.5751/ES-13691-270437
ST Shutters, K Waters, R Muneepeerakul (2022) Triad analysis of global energy trade networks and implications for energy trade stability. Energies 15(10):3673, doi:10.3390/en15103673
K Waters, ST Shutters (2022) Impacts of Skills Centrality on Regional Economic Productivity and Occupational Income. Complexity 2022:5820050, doi:10.1155/2022/5820050

Manuscripts in review/revision

K Waters, ST Shutters (2023) Global Coal Trade Distributions from 1988 to 2021.
SO Altiparmak, K Waters, CG Thies, ST Shutters (2023) Cornering the Market with Foreign Direct Investments: China’s Cobalt Politics.
SO Altiparmak, CG Thies, K Waters, ST Shutters (2023) The geoeconomics of renewable energy: China’s involvement in the European Union market.
SO Altiparmak, CG Thies (2023) Sanctioning as a Goal unto Itself: Retribution and Emotions Behind the Iranian Sanctions.
Z Neal, A Berger, B Butterfield, D Garlaschelli, N Gotelli, F Saracco, T Squartini, ST Shutters, W Ulrich, G Wang, G Strona (2023) Pattern Detection in Bipartite Networks: A Review of Terminology, Applications and Methods.

Conference sessions organized

K Waters (chair), session on Global Networks – Trade and Investment. American Association of Geographers Annual Meeting. Denver, Colorado. Mar. 25, 2023

**Conference papers, posters, and presentations (* undergraduate fellow)**

SO Altiparmak (2023) The geoeconomics of new energy security: foreign direct investment in cobalt production. European Political Science Association annual conference. Glasgow, Scotland. June 23, 2023
M McAnulty* (2023) Is it time for a new supranational government? An IGO for space. Lunar Surface Innovation Consortium Spring Meeting, Johns Hopkins University, Baltimore, Maryland. Apr. 24, 2023
K Waters, ST Shutters, R Muneepeerakul (2023) Diversity in International Energy Trade Markets. American Association of Geographers Annual Meeting. Denver, Colorado. Mar. 25, 2023
K Waters, ST Shutters (2022) Global Palm-Oil Trade: A Network Analysis Approach. Southeastern Division, American Association of Geographers, 77th Annual Meeting. Atlanta, Georgia. Nov. 21, 2022
E. Guettouche* (2022) Forecast of Clean Energy Consumption in China Using an Optimized Grey Dynamic Model. College of Global Futures Student Showcase 2022, Tempe, Arizona. Apr. 21, 2022.
M McAnulty* (2022) Energy Alignments for Space-Based Solar Power. College of Global Futures Student Showcase 2022, Tempe, Arizona. Apr. 21, 2022.
G White* (2022) A Brief Overview of World Trade 2008-2020. College of Global Futures Student Showcase 2022, Tempe, Arizona. Apr. 21, 2022. (Figure 1b)
K Waters, ST Shutters (2022) Co-agglomeration Networks. American Association of Geographers 2022 Conference. New York, New York. Feb. 25, 2022
K Waters, ST Shutters, T Clower (2022) Coal Trade Networks and Trading Communities: The case of Australia. Western Regional Science Association, 61st Annual Meeting. Scottsdale, Arizona. Feb. 19, 2022

Invited talks/panels

ST Shutters (2021) Decarbonize with Big Data: Why should I give you my data, and what do I get? The Sustainability and Security Forum (Panelist). Washington, DC. Oct. 21, 2021