Economist Warns US-China Rivalry Risks Global Leadership Vacuum

The intensifying rivalry between the United States and China is often viewed through the lens of potential military conflict, particularly the so-called “Thucydides Trap,” which warns of war between a rising and an established power.

The greatest risk posed by US-China rivalry may not be war itself, but the weakening of global governance mechanisms needed to maintain stability in an increasingly interconnected world.

However, economist Tan Kong Yam argues that a more dangerous threat may come from systemic neglect rather than direct confrontation.

Writing in an opinion piece for The Business Times of Singapore, Tan highlighted the “Kindleberger Trap,” a theory suggesting that global instability arises when an existing global power becomes unwilling or unable to provide international public goods, while the rising power is either unwilling or unable to assume that role.

The concept, rooted in the work of economic historian Charles Kindleberger and later popularized by political scientist Joseph Nye, draws lessons from the 1930s Great Depression.

Kindleberger argued that the collapse of the global economy was worsened by Britain’s declining leadership and the United States’ reluctance to take responsibility for stabilizing the international system.

Tan, an emeritus professor at Nanyang Technological University and chairman (China) of APS Asset Management, warned that a similar vacuum in global leadership today could undermine financial stability, trade openness, crisis coordination, and global security.

He said the greatest risk posed by US-China rivalry may not be war itself, but the weakening of global governance mechanisms needed to maintain stability in an increasingly interconnected world.