by Bill O’Grady | PDF

The Thucydides Trap is an idea that comes from the ancient Greek historian of the same name who described a situation where the incumbent superpower of the time, Sparta, was faced with an insurgent power, Athens.  The two powers ended up in a ruinous war.  Thucydides postulated that when an established superpower is being threatened by a rising one, the likelihood of war increases.

Graham Allison did a study of the trap[1] in 2017, examining earlier examples but focusing on the situation between China and the United States, which appears to have at least some of the same characteristics that Thucydides outlined in his History of the Peloponnesian War that led to the conflict between Athens and Sparta.  Allison, as noted above, was primarily concerned about the potential for war between China and the U.S., but he also analyzed 16 other historical rivalries and concluded that 12 resulted in war while four did not.  Obviously, this ratio is not comforting.  Allison did conduct an examination of the trap conditions that didn’t result in war and tried to draw conclusions, but the concept of the Thucydides Trap has become a model for examining the U.S./China situation.

However, Hal Brands and Michael Beckley are proposing something of a twist to the trap.  They don’t dispute that the odds of conflict rise when there are rising powers that threaten the existing power arrangement.  But their position is that it isn’t exactly true that a rising nation is the problem.  Instead, what leads to war is if the rising power perceives that its rise is slowing.  They call it the “peaking power trap.” They argue that the real problem arises when an insurgent power begins to fear that its acceleration is slowing and thus the perception that a window of opportunity is closing is what produces war.

In this report, we will examine the idea that China may be reaching such a deceleration and therefore perceives that time is no longer on its side.  If that is the case, there may be no better time than the present to move quickly to secure its geopolitical goals while it has the power to achieve them.  The analysis starts with a review of the concept of the “high growth/low cost” (HG/LC) producer and the risks that emerge when that phase comes to a close.  We will also include a discussion of population issues.  From there, we will examine China’s geopolitical constraints and its capacity to overcome them.  Finally, in the section on market ramifications, we will look at how these two issues combine to potentially raise the problem that Brands and Beckley have introduced.

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[1] Allison, G. (2017). Destined for War: Can America and China Escape Thucydides’s Trap? New York, NY: Houghton Mifflin Harcourt Publishing Company.