Threat Monitor Addendum: The details of the US-China soft power monitor

In Parts 1, 2, and 3, we discuss the utility of a threat monitor to tracking issues that are of low probability but high impact. We used the example of China overtaking the United States in soft power. In this section we’ll get into why each factor was chosen to illustrate some of the decisions that can go into the construction of one such monitor.

In this example monitor, we chose five factors that would lead to a more pro-China tilt in soft power and five that would lean against it. There is nothing sacred about these numbers. You could have more pro- than against, or vice versa. Your monitor could also have many more factors, depending on the complexity you want.

Ultimately, these monitors are built on subjective decisions. Get in touch if you want advice on how to build your own.

Pro-China drivers

Several factors could strengthen China’s global standing over the next twelve months. First is developing the world’s first effective coronavirus vaccine. While President Xi promised the vaccine would be a “global public good” at a WHO summit in May, China could still prioritize the vaccination of its own citizens to jump-start the economy. China would lead the vaccine distribution process and countries would be beholden to China, offering a significant opportunity to increase soft power while touting Chinese scientific ingenuity. 

A second determinant will be China’s handling of a second wave of infections. While China’s draconian measures controlled the spread of coronavirus much more effectively than the US could, signs of a second wave are already emerging in Beijing. If China’s strict surveillance state succeeds, China could experience a relatively small second wave and swift economic rebound while the US struggles with a second wave and deepening recession. China could then claim its system of government is obviously superior to the Western model in managing public health crises. 

Third, China’s influence in the international community will largely depend on whether they can overcome their blunders from the early days of the pandemic. China has tried to recast itself in a positive light by offering PPE and medical assistance as the virus spread in Europe and Africa. As the US withdraws from WHO and focuses on domestic issues, China could seize the opportunity to fill the void in leadership by making amends and strategic allies in the process. 

Fourth, China could directly take control of Hong Kong and forcefully impose its will in the region while the international community is too distracted by coronavirus to intervene. The US will lose a key foothold in the region while China sets a precedent of asserting its dominance without international backlash. 

Finally, a chaotic US Presidential race could provide an opening for China to take a leadership position on the world stage while the US deals with a contentious election compounded by recession and racial tensions. China could highlight the chaos of the US election as a sign of incompetence. 

Anti-China factors

On the other hand, several factors could severely weaken China’s standing in the world order following the pandemic. If the US develops a vaccine first, China would be beholden to the US and the superior American spirit of innovation. The US could use the vaccine to reclaim its position as a global leader. 

Second, multinational corporations are realizing that their supply chains are too dependent on China. As they diversify, China will face an embarrassing economic hit and lose political clout as nations are less reliant on China as a manufacturing powerhouse. 

Third, an international investigation could reveal negligence and misconduct on the part of China in covering up the pandemic and missing out on key opportunities to contain it. In this scenario, China would face severe international condemnation, potentially leading to multilateral sanctions and lingering mistrust. 

Fourth, aggression on China’s part in the region, particularly Hong Kong, could be met by heavy international backlash. President Trump may want to show he’s “tough on China”. Instead of asserting their dominance while the world is distracted, China may be forced to back down if the international community makes a stand for democracy. 

Finally, nations could balance against China by forming a strong anti-China coalition to prevent China from gaining too much power and influence on the global stage. China’s strength as a super power would be significantly diminished in the event of a counter-alliance.  

Scoring the drivers

Each metric is scored 0-10, 1 meaning that the scenario is not occurring at all and China’s relative power will not change, and 10 meaning that the scenario is occurring as described and China’s international standing will be significantly advantaged or disadvantaged. 

The metrics are weighted to reflect that some are more important and consequential than others. China developing a vaccine, containing a second wave, and gaining soft power by controlling the narrative surrounding their role in the pandemic carry more weight than the political factors of asserting dominance in Hong Kong and taking advantage of a chaotic US presidential race. Similarly, the magnitude of the effects on China’s global power is greatest with US vaccine development and international condemnation following an investigation that reveals gross misconduct. MNCs relocating and international push back on China’s aggression in the region would not deal as significant a blow to China’s standing. Nations balancing against China would fall in the middle. By adding up each weighted metric and subtracting the total of the disadvantageous metrics from the advantageous metrics, we get a score that reflects whether China is currently on the rise or on the decline. 

As of publishing the score is 9 indicating that the Covid crisis has in fact offered some key opportunities for China to increase its relative power on the global stage. While China’s position has recently strengthened as its vaccine candidate is the first to enter phase three trials and its plan to expand control over Hong Kong is unveiled in new National Security Law details, its status is dynamic and likely to change in the coming months. 

These key metrics must be monitored and updated over time in order to properly gauge the role China is likely to play in the evolving global order.

As always, if you want help building your own threat monitors, let us know.