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Published online by Cambridge University Press: 07 May 2025
This paper examines US, Japanese and European political economy approaches to China and their effect on US-Japan and US-European Union (EU) relationships. Great powers with a greater security concern in dealing with another major country care more about power while those with less concern are preoccupied with calculations of wealth. China's rise and its actions have posed a far greater security challenge to the United States and Japan than to the EU and are driving the two countries closer together. The political economy game involving China reveals a dominant welfare motive among the advanced market economies. The ambition to transform China politically has diminished. China's integration into the global market makes a relative gains approach difficult to implement. Globalization simply limits the ability of a state to follow a politics-in-command approach in the absence of actual military conflict, which explains why the political economy approaches of the United States, Europe and Japan are not that different. China's own grand strategy to reach out to the world and outflank the US-Japan alliance has also contributed to a divergent European policy toward China, although there are severe limitations to Beijing's ability to drive a wedge between the United States and Europe.