In Pursuit of Mutual Benefit: Applying the Extended Diamond Model to the US-China Trade Dispute

Abstract

This article recalls for cooperation between the United States (US) and China amid their escalating competition. It emphasizes the necessity and possibility of collaboration, advocating for win-win outcomes rather than antagonistic win-lose or lose-lose scenarios. The analysis utilizes the extended diamond model to assess comprehensive national competitiveness, identifying both countries’ comparative advantages across various sub-factors. China’s strengths lie in basic sub-factors: unskilled labor supply, market quantity, infrastructure availability, and competitive stability. On the other hand, the US excels in advanced sub-factors: skilled labor supply, market quality, synergy creation, and competitive dynamics. The contrasting but complementary strengths and weaknesses highlight the multifaceted nature of their competitive strengths. Recognizing and leveraging these respective advantages can lead to collaborative synergies, fostering mutual benefits. Such an approach enables both nations to enhance their national competitiveness and achieve mutual prosperity. This study specifically underscores the potential for the US and China to contribute synergistically to each other’s growth by capitalizing on their unique strengths. The findings also provide implications for multinational corporations (MNCs) in choosing the locations for their overseas operations, particularly in the US and China.