How bad is the relationship between China and the U.S.? There is no need to mince words: China and the U.S. are caught in a competitive downward spiral that if not reversed could drastically damage the two countries and the rest of the world. Even if Beijing and Washington can “put a floor” under their competition (as the Biden administration likes to put it) so that it doesn’t go military, the hostile interactions between these two superpowers—which constitute 40% of the world’s economy—will take a toll on innovation and growth. Even before the onset of the Covid pandemic, global growth in 2019 was the lowest in a decade.

---