3.3 Absolute gains

A second issue relates to whether states only focus on how, or if, they themselves benefit from a particular situation or whether they worry about how other states are faring. To address this question, scholars of international relations distinguish between absolute gains and relative gains. If states pursue absolute gains, then they measure their own gains or losses independently of the gains or losses of another state. For example, in assessing a proposed trade deal with China, the United States would simply ask, ‘Will we be better off than we would be without it?’ By contrast, if states pursue relative gains, then they judge their own gains in relation to how much other states gain or lose. On such a trade deal here the United States will ask, ‘Are we gaining more or less than China from this deal?’

Let’s take an example to illustrate the distinction. Much debate about China–United States relations focuses on the comparative growth rates of the two economies. Table 2 shows annual increases in gross domestic product (GDP) for China and the United States between 1990 and 2010. Although many factors determine these growth rates, growth in each country is important to the other: China’s growth helps stimulate growth in the United States, while the United States is a vital market for China.

If you read through the two columns of data you will notice two things: both countries have experienced economic growth in each year; and China has grown much faster than the United States.

• Q: If each country were pursuing absolute gains would they judge this record to be a satisfactory one or not? If each were pursuing relative gains, would they judge this record to be a satisfactory one or not?

A focus on absolute gains by the United States would only need to focus on the United States column and would see this record as a positive one: the economy has grown in each year and is wealthier at the end than at the beginning of this period. They may wish that growth rates were nearer the levels achieved by China, but it is still a positive record. A focus on relative gains, however, would require a comparison of the two growth rates and lead to a more pessimistic conclusion: China is doing better than the United States and therefore its economy is growing faster and reducing the United States’ economic leadership. As Figure 5 predicts, this means that at some point China would overtake the United States in terms of the size of its economy. If China focused on relative gains it would view the record of growth positively, for the same reason. Whereas a focus on absolute gains might lead to an assessment that there are substantial shared interests between the two, a focus on relative gains would lead to an assessment on the part of the United States that the interests of the two are opposed.

These areas of discussion – what states are seeking to achieve, how they order their preferences, and whether they pursue relative or absolute gains – are linked. You will come back to this a little later because they are crucial for judging some key aspects of China–United States relations.