Navigating the Nexus: US-China Relations as a Catalyst for Global Prosperity and Stability
Abstract: This academic paper analyzes the implications of Singaporean President Tharman Shanmugaratnam’s address at the 2025 Per Jacobsson Foundation Lecture, focusing on his proposition that well-managed US-China relations are crucial for global prosperity and stability. The paper explores his arguments against decoupling, his call for renewed multilateralism, and his proposed “pathfinder multilateralism” for trade and Artificial Intelligence (AI) governance. It examines the underlying geopolitical and economic shifts prompting these suggestions, including the US retreat from global leadership, the escalating US-China trade war, the global jobs crisis, and the emergent risks of AI. The paper argues that President Tharman’s ecological metaphor of “hybrid flourishing” offers a productive framework for understanding potential US-China cooperation, while acknowledging the significant challenges in achieving it.
Keywords: US-China relations, global prosperity, multilateralism, decoupling, artificial intelligence, trade war, Per Jacobsson Foundation, Singapore, geopolitics, economic security.
- Introduction
The global landscape is increasingly defined by the complex and often fractious relationship between the United States and China. As the two dominant economic and geopolitical powers, their interactions reverberate across international trade, security, and technological development. In this context, Singaporean President Tharman Shanmugaratnam’s address at the 2025 Per Jacobsson Foundation Lecture at the International Monetary Fund (IMF) headquarters on October 15, 2025, offers a significant perspective on managing this critical bilateral relationship for the benefit of the global community. President Tharman’s central thesis posits that the competition between the US and China should be framed not as an existential threat, but as an opportunity for managed interaction that can drive global prosperity and innovation. This paper will delve into the core arguments presented in his lecture, analyze their relevance in the current geopolitical climate, and explore the implications of his proposed solutions for global governance.
- The Imperative of Managed Competition: Beyond Decoupling
President Tharman’s most striking assertion is his rejection of a complete decoupling between the US and China. He eloquently warns that “If we fail, and progressively decouple the two systems, we face growing danger, and no winners.” This stark warning underscores the interconnectedness of the global economy and the significant risks associated with bifurcating major economic powerhouses. The US, with its market-driven system, and China, with its state-guided economy, represent distinct yet deeply intertwined economic models. A forced separation, he argues, would not only be economically detrimental but would also exacerbate geopolitical tensions, transforming a multipolar world into a “more polarized and dangerous world.”
This perspective challenges the prevailing hawkish discourse that often advocates for a comprehensive decoupling to contain China’s rise and protect national security interests. President Tharman’s “ecological metaphor” of hybrids flourishing where different ecosystems meet is particularly insightful. It suggests that the interface between the US and China, despite their inherent differences and competitive pressures, can be a fertile ground for innovation and mutual benefit, akin to the emergence of new life forms from the dynamic interaction of distinct biological environments. This framing encourages a pragmatic approach, acknowledging that competition is inevitable but that its management can yield positive outcomes.
The lecture comes at a time of escalating trade tensions and technological competition between the two nations. The observation that “the fault line between the countries is widening, with a growing intersection between national security and economics” accurately captures the current strategic environment. However, President Tharman’s intervention offers a counter-narrative, emphasizing the potential for productive engagement even amidst this heightened rivalry. He acknowledges that while the US may attempt to slow China’s technological advancement, preventing it entirely is unlikely. The critical question, therefore, becomes whether China’s progress occurs within a framework of interdependence or through an aggressive pursuit of self-reliance. Both scenarios carry risks, but managed interdependence, he suggests, offers a more hopeful path than the profound dangers of isolation.
- Renewed Multilateralism in an Era of Shifting Global Leadership
President Tharman’s call for “renewed multilateralism” is a direct response to a perceived shift in global power dynamics, particularly the “steady retreat” of the United States from its traditional role as a defender of open markets and a champion of international cooperation. He notes that this retreat is evident in areas such as climate change and global health, leaving a vacuum that requires collective action. The assertion that “Without international cooperation and collective action, it will be impossible for any country, large or small, to secure its own interests and ensure the economic security that its people desire” highlights the fundamental interdependence of nations in addressing shared challenges.
This call for multilateralism is particularly poignant given the contemporary challenges facing international institutions like the World Trade Organization (WTO). President Tharman’s criticism of the WTO’s “consensus decision-making process” as a “recipe for paralysis” is a widely held sentiment. He advocates for serious consideration of proposals, including those from Singapore and China, to reform the WTO’s decision-making mechanisms. Furthermore, his suggestions for an updated framework on export restrictions, reforms to prevent a global subsidy race, and objective criteria for developing countries’ access to special and differential treatment demonstrate a pragmatic understanding of the need for institutional adaptation to contemporary economic realities.
The notion of “pathfinder multilateralism” is introduced as a novel approach to navigating complex global issues such as trade and AI governance. This concept suggests the formation of smaller, more agile coalitions of like-minded countries, potentially including key players like the US and China, to forge consensus and establish guardrails in specific areas. By focusing on “scientific coalitions” for AI, President Tharman proposes a collaborative approach to developing responsible AI frameworks, acknowledging that states acting alone will be insufficient to manage the risks associated with this transformative technology. This approach offers a pragmatic pathway to progress in areas where broad, inclusive multilateralism has faltered.
- Addressing the Global Jobs Crisis and the Impact of AI
A significant portion of President Tharman’s address is dedicated to the pressing issue of the global jobs crisis, particularly its impact on young people. He highlights the “unprecedented job crisis affecting millions of young people across the world,” emphasizing that “job creation cannot be left to the market and instead requires social policy on an industrial scale.” The projection that “1.2 billion young people are entering working age over the next decade, and on current projections, we will fall short of providing jobs for 800 million of them” in the developing world paints a stark picture of a looming socio-economic challenge.
The confluence of this youth unemployment crisis with the transformative potential of Artificial Intelligence (AI) presents a dual threat. President Tharman warns of the risk of a generation already “scarred by Covid-19 during their schooling years now being doubly scarred by missed opportunities as they enter the job market” if AI accelerates the erosion of entry-level jobs. This underscores the urgent need for proactive policy interventions. His call for “bolder investments in technical and vocational education” and a “more proactive and muscular approach to helping those displaced by technology and competition” are crucial recommendations for equipping individuals with the skills needed for the future of work and mitigating the social consequences of technological displacement.
The implications of AI extend beyond the labor market to global governance. President Tharman’s emphasis on the need for “guardrails to contain the worst risks associated with the technology, such as AI-powered scams, runaway misinformation and AI-designed bioweapons” reflects a growing global concern. His proposition for state-led, yet collaborative, approaches to AI safety, potentially through “scientific coalitions,” signals an understanding that the development and deployment of AI require international cooperation to mitigate its inherent risks.
- Conclusion: A Call for Pragmatism and Collaborative Action
President Tharman Shanmugaratnam’s lecture at the Per Jacobsson Foundation offers a compelling and pragmatic vision for navigating the complexities of the 21st century. His central argument for managing, rather than eliminating, US-China competition as an “opportunity” for global prosperity resonates with the need for a more nuanced approach to geopolitical rivalry. His call for renewed multilateralism, coupled with the innovative concept of “pathfinder multilateralism,” provides a framework for addressing pressing global challenges in an era of shifting power dynamics and institutional inertia.
The paper has highlighted the interconnectedness of President Tharman’s arguments: the management of US-China relations is intrinsically linked to fostering global economic stability, which in turn is essential for addressing the global jobs crisis and mitigating the risks associated with AI. His ecological metaphor serves as a potent reminder that dynamic interaction, even amidst competition, can lead to beneficial outcomes.
Ultimately, President Tharman’s message is one of urgent pragmatism: “This is no time for timidity.” The challenges of economic inequality, technological disruption, and geopolitical fragmentation demand bold leadership and a renewed commitment to international cooperation. By framing the management of US-China ties as a central pillar of global well-being, and by advocating for innovative approaches to multilateral governance, President Tharman offers a hopeful, albeit challenging, roadmap for a more prosperous and stable future. The success of this vision hinges on the willingness of global leaders, particularly those in Washington and Beijing, to embrace managed competition and collaborative problem-solving over a descent into escalating rivalry and isolation.
References:
(Note: As the provided text is a news report from October 16, 2025, specific academic references to this lecture would not yet exist. However, a full academic paper would include citations to relevant literature on US-China relations, international political economy, multilateralism, and AI governance.)
Examples of potential reference areas:
Literature on US-China strategic competition and interdependence.
Academic works on the future of multilateral institutions and global governance reform.
Research on the economic and social impacts of Artificial Intelligence.
Analyses of global employment trends and youth unemployment.
Works discussing Singapore’s foreign policy and its role in regional and global affairs.