Set Aside Disputes, Pursue Joint Development
The secret key to peace in the Asia-Pacific, and the third of a three-part series on the South China Sea. The first two memos build the ground this one stands on: The AsiaPac Predicament sets out the dispute in full, and The AsiaPac Solution offers a concrete way to resolve it. This memo asks the larger question behind them both — does the world truly want a war between the United States and China, and if not, what must we build instead? The title is not ours but Deng Xiaoping’s: his counsel to set aside disputes and pursue joint development is the whole idea in six words. The answer is a union, and the secret it turns on is that each nation need give only a little to gain a great deal.
1. The question no one wants to answer
Set aside, for a moment, every claim and counter-claim, every reef and every ruling, and ask the plainest question in the region: does the world want a war between the United States and China? Not who would win it — whether anyone truly wants it at all. Ask it of a farmer in Shandong, a shopkeeper in Ohio, a fisherman off Palawan, a family in Newcastle, and the answer comes back the same: no. Almost no one, in any nation, wants this war.
And yet the region drifts toward it — ships crowding the same water, budgets swelling, alliances hardening, each side rehearsing a fight it insists it does not want. When nobody wants a war and everybody prepares for one, that is not fate. It is a failure of imagination — and a failure we are free to correct. This memo is about how.
2. Almost everyone wants peace
Begin with the ninety-five per cent. Strip away the strategists and the hardliners, and the people of every nation in this contest want the same unremarkable things: to raise their children, earn a living, and grow old in a country at peace — and, given the chance, to travel, to see the world, and to meet other peoples and know their cultures rather than fear them. War delivers almost none of it. It is a project of the few, paid for by the many.
This is not naivety; it is arithmetic. The overwhelming majority on every side is already on the side of peace — they have simply never been offered a plan equal to their wish. The task, then, is not to persuade people to want peace. It is to give the peace they already want a shape it can take.
The author will own a wish of his own, no grander than anyone else’s: to ride a maglev from one nation to the next, clear across continents, among peoples at peace with one another. It is an ordinary hope, and almost everyone alive holds some version of it. That is precisely the point.
3. Why we need not listen to the warmongers
If almost everyone wants peace, the drift toward war is driven by a minority who present it as inevitable or necessary. That case does not survive examination, on six counts.
It does not weigh the cost. A war between nuclear-armed powers carries no achievable objective proportionate to its price: as the chapters that follow set out, both sides end poorer and less secure than they began. To advocate it is not realism but a refusal to follow the outcome to its conclusion.
It is contradicted by the record. The forecast of a short, controllable, winnable great-power war has been made repeatedly — in 1914 and many times since — and has repeatedly proved wrong. Such wars have tended to run longer, wider and more destructively than their advocates predicted.
It does not speak for those who bear it. The populations that supply the casualties and absorb the economic damage are consistently more cautious about war than the officials who advocate it. The demand for confrontation originates disproportionately with those least exposed to its consequences.
In a democracy, officials answer to the public. Elected governments and their appointees hold authority delegated by the electorate. Where a clear majority favours a peaceful settlement, a policy of confrontation lacks that mandate, and the public is within its rights to withhold it.
Its stated rationale often differs from its drivers. Arguments framed as security or duty frequently rest on weaker foundations: limited knowledge of the opposing side, an institutional or commercial interest in continued confrontation, and the retention of power. None is an adequate basis for a decision of this magnitude.
And it imagines a world that no longer exists. The case for confrontation assumes nations that can be beaten and then walked away from. In a globalised economy of interlinked supply chains, shared markets and mutual energy dependence, the major powers are bound too tightly together for that: to cripple a rival is to cripple oneself, and there is no victory to be had over the nation your own prosperity relies on. War as a way to settle accounts between great powers belongs to an age of separable economies — and that age has passed. The Prize: A Unified Asia-Pacific breaks this interdependence down in full.
This does not establish that every advocate is wrong in every instance. It establishes that the case for confrontation must be tested against evidence and cost rather than accepted on assertion — and that, so tested, it is usually the weaker one.
4. What the confrontation costs: the economy
The costs of this confrontation are not confined to a war that has not yet happened. The posturing alone — the tariffs, the bans, the export controls, the arms build-up — is already imposing a measurable price, and it is rising.
Tariffs. Since 2025 the United States and China have raised tariffs on each other in successive rounds, at one point reaching rates above 100%. A one-year truce agreed late in 2025 and extended at the May 2026 summit has paused, but not removed, the measures — and both sides expect to revisit them. When the confrontation last escalated, roughly US$1.5 trillion in market value was erased in two days.
Technology bans. The United States has progressively restricted the export of advanced semiconductors, chip-design software and manufacturing tools to China, extended those controls to foreign affiliates, and moved to block outbound investment in Chinese chip, AI and quantum sectors. China has answered with antitrust probes into US chipmakers, fees on US-linked shipping, and its own controls on US firms. One industry estimate puts the initial cost to US chipmakers of a full decoupling at around US$77 billion in lost sales, with tens of billions more falling on firms in South Korea, the European Union, Taiwan and Japan.
Rare earths and critical minerals. China processes an estimated 85–90% of the world’s rare earth elements — the inputs for batteries, electronics, wind turbines and precision weapons. Since 2025 it has placed successive export controls on these minerals, on the equipment to refine them, and on the US companies trying to build alternative supplies. The controls have driven price rises of several-fold and cut some Western buyers below a quarter of their previous access; the disruption has proved structural rather than temporary.
People and universities. The separation now reaches into classrooms and laboratories. The United States has moved to revoke and tighten visas for Chinese students and researchers, and a number of American universities — among them Michigan and Georgia Tech — have ended long-standing partnerships with Chinese institutions on security grounds. This severs one of the most productive exchanges of the past forty years: roughly 370,000 Chinese students study in the United States, part of an international cohort that contributes on the order of US$44 billion a year to the US economy and supports hundreds of thousands of jobs. Beyond the money, it closes the channel through which two peoples have come to understand each other — the very understanding on which any future peace depends.
Division, and the money spent on it. Beneath the specific measures runs a broader and more expensive fact: two economies built over decades to work together are being pulled apart, forfeiting the efficiency that made them prosperous. And the resources poured into the standoff — the rising military budgets on every side, the duplicated supply chains, the subsidies to reshore what was once simply bought — are resources not spent on health, housing, education or energy. This is the price of the confrontation before a single shot is fired, and it is already being charged to ordinary people in every nation involved.
And that is only the cost of the posturing; an actual war would be of another order entirely. The two largest economies on earth are not rivals who can simply part ways; they are each other’s essential suppliers, customers and creditors, their fortunes stitched together through every supply chain and every market. A real war tears that fabric in half.
For the United States, it means shelves emptying of goods no longer made at home, prices leaping, retirement savings falling with the markets, factories idled for want of components, and a question mark over the debt that others help to finance. For China, it means export markets vanishing overnight, technology cut off at the source, growth stalling, and the hard-won prosperity of a generation put at risk. For everyone else — Australia among them — it means a global recession, trade routes severed, and the roughly US$3.36 trillion of commerce that crosses the South China Sea each year frozen where it floats. There is no version of this in which either giant emerges richer. Both come out poorer; everyone downstream comes out poorer still.
5. What a confrontation costs: the military
The military ledger is worse. A war between nuclear-armed peers is nothing like the campaigns of the last century. It would be attritional, catastrophic, and prone to escalation at every step. For the United States it means carriers and bases sitting within reach of thousands of precision missiles, casualties on a scale not seen in generations, and a war fought an ocean from home that even victory would leave it exhausted to have won. For China it means its coastline, its cities and its trade lifelines all exposed, and the survival of the state staked on a single throw.
For the region it means allies pulled in, home cities turned into targets, and above it all the ladder that leads, rung by rung, toward the use of nuclear weapons. The lesson is the one the companion assessment already draws: in a war like this, even the winner loses. There is no outcome whose price a clear-eyed nation would choose.
6. Asia’s experience of war
None of this is hypothetical for Asia. The region holds some of the most direct experience of modern war anywhere on earth, and it is recent enough to remain in living memory.
In the Second World War, the fighting across Asia and the Pacific killed on the order of twenty to thirty million people. The war with Japan from 1937 cost China alone an estimated fifteen million lives or more, and included atrocities such as the Nanjing Massacre of 1937. It ended with the only use of nuclear weapons against cities in history, at Hiroshima and Nagasaki — the weapons whose far larger successors now sit at the centre of any conflict between the United States and China.
The wars did not stop in 1945. The Korean War, from 1950 to 1953, killed several million and left the peninsula divided along a militarised line that has never been resolved — a frozen conflict now in its eighth decade. The wars in Indochina over the following two decades killed millions more across Vietnam, Cambodia and Laos, and were followed in Cambodia by the Khmer Rouge genocide under Pol Pot, which killed perhaps one and a half to two million people — a fifth or more of the population — between 1975 and 1979. Other mass killings added further to the toll, among them the deaths of many hundreds of thousands in Indonesia in 1965–66.
By any accounting, the peoples of Asia have paid the price of war more heavily, and more recently, than almost any others. Much of it settled little that could not have been settled otherwise. The question this memo puts is therefore a plain one: knowing all of this at first hand, and within living memory, does the region wish to do it again?
It is worth adding what the record also suggests. Many of these catastrophes grew from the very conditions a union is built to remove — nations isolated into rival blocs, power left unchecked, and no shared institution to which a grievance could be taken instead of a gun. A region bound together in one framework, with a council to hear disputes and a common stake in each other’s stability, is far harder ground for such events to take root in. A union would not have guaranteed against every one of them. But in more cases than not, it might have offered the off-ramp that history did not.
7. Therefore, we must try
Put the two ledgers together and the conclusion is inescapable: the confrontation is lose–lose in the counting-house and lose–lose on the battlefield. Which is precisely why peace is not the soft option here — it is the only rational one. And it places an obligation on everyone who can see it. To drift toward a war almost no one wants, to prepare for it, budget for it and rehearse it, and never once seriously try for the alternative, is the single unforgivable failure.
It was an American president, at the height of a colder and more dangerous standoff, who put the point plainly. Standing before the United Nations — the institution he saw as humanity’s best alternative to war — John F. Kennedy warned that “mankind must put an end to war — or war will put an end to mankind.” (UN General Assembly, 25 September 1961.) That is the whole of it. We need not resolve every quarrel to keep the peace. We need only build a world in which our differences no longer have to be settled by war.
8. The key: each gives a little, to gain a great deal
If war is the wrong road, what is the right one? Not surrender — and not the endless armed truce of deterrence, which only freezes a confrontation until the day it thaws. The answer is union, and it turns on a secret hidden in plain sight: the same one that resolved the sea in the companion proposal. Every nation gives a little — a little of its boundary, a little of its claim, a measured and equal share of what it might otherwise hold alone. And in return every nation gains a great deal: security it cannot buy with weapons, prosperity it cannot seize by force, and a peace no fleet can guarantee. Small, equal sacrifice; vast, shared reward. That is the trade at the heart of every union that has ever lasted.
It is also the counsel of the region’s own architects. Facing these very disputes, Deng Xiaoping urged the nations involved to “set aside disputes and pursue joint development” — to leave the unanswerable question of ownership aside, and share the wealth now. The key was never a better weapon. It was a little given, for a great deal gained.
9. The region’s own leaders have already called for this
This is worth dwelling on, because it changes what the proposal is. It is not a foreign idea pressed on Asia from outside. It is the idea Asia’s own leaders have already voiced — and all this memo does is take them at their word. Deng opened the door: set the quarrel aside, develop together. And the present leadership has drawn the picture whole. All nations, Xi Jinping has said, are aboard one great ship on which their shared destiny depends, rather than “riding separately in some 190 small boats”; and, addressing the leaders of the Asia-Pacific, he framed the choice in a single line — “cooperation or confrontation?”
Set these beside Kennedy’s call from the other side of the world, and the same conviction sounds in three voices, across seventy years and every ideological divide: that the powerful keep the peace not by dividing the world between them, but by binding it together. This memo simply asks all of them — Washington, Beijing, and every capital in between — to build the ship they have already described.
10. A union that belongs to no one
A fair objection arises at once: whose union would this be? A community led by the strongest is not a community — it is a sphere of influence with better manners, and no one at the table would trust it. The answer is to give the union no owner. Let it be chaired and housed by parties with no claim in the disputes and no ambition over the sea — and Australia and New Zealand are the natural candidates: trusted across the region, threatening to none, woven into Asia’s economy but absent from its territorial quarrels.
A neutral host holds the secretariat, chairs the council and keeps the books, precisely because it wants nothing from the water. That single choice answers the fear that has poisoned every previous attempt — that to join is to submit to a rival. No one submits to a union that belongs to no one. Every power can enter it as an equal, because none of them owns it.
11. Off-ramps for the giants
A peace that asks the strong to lose cannot hold; it must let everyone win, visibly, or no one will sign. So the union is built with an off-ramp for each of the giants. For China it offers security without encirclement, status without conquest, and the joint development its own leaders have long called for — a way to be first among equals in a prosperous region rather than the feared centre of a resentful one.
For the United States it offers the thing it most wants and can least afford to keep buying: a stable Asia-Pacific it no longer has to police alone, held steady by the region’s own hand rather than by an ever-larger fleet an ocean from home. And here the American role is deliberately modest. The United States is not asked to lead this union, nor to concede to it. It is asked only to support it — to let the region build its own peace, and to welcome the burden lifted from American shoulders. Peace that lets everyone win is not weakness. It is the only kind that lasts.
12. Start with the knot: the South China Sea
Grand designs fail when they try to solve everything at once. This one begins in a single place — the hardest place. The South China Sea is the region’s rawest nerve and its likeliest trigger: the water where the ships already crowd, where the incidents already happen, where a war would most plausibly begin. Solve that, and the rest becomes possible.
The companion proposal shows how — share the sea rather than divide it: a national band along every coast, a jointly developed Union Zone beyond it, shares set by a plain and equal rule, all under a treaty grounded in the Law of the Sea. Prove the method in the one place everyone called impossible, and two things follow. The disputed sea stops being a fuse. And the trust earned in defusing it — the habit of sitting at one table and leaving richer — becomes the capital that funds the next step, and the step after that. One knot, patiently untied, loosens the whole rope.
13. From a sea to a union — and the call to try
From the sea, the union widens outward, and every widening is another strand that makes war unthinkable. Shared energy grids and interconnectors; ports, rail, and the undersea cables that carry the region’s data; joint infrastructure, open trade, and the freer movement of people and ideas. The ambition is not new — China has already shown it with the Belt and Road — but the union takes the next step: to unite the region’s technical leaders, China and Japan foremost among them, in building one shared multimodal infrastructure through the nations of the Asia-Pacific. Not one power’s network of influence, but the region’s own — built together, held in common, and open to all who join. Each is worth having for its own sake. But together they do something greater: they weave the nations of the Asia-Pacific so tightly into one another’s prosperity that to strike a neighbour becomes to wound oneself — a shared prosperity whose scale is set out in The Prize: A Unified Asia-Pacific. That is how peace is truly kept — not by the balance of fear, but by the density of shared interest.
None of this is certain, and none of it is easy. But the alternative is a war that beggars the winner and buries the loser, in a region that carries a third of the world’s trade and much of its future. Almost everyone alive in these nations already wants the peace this memo describes; they are waiting only to be asked to build it. So let this be the asking. We may not succeed. But when the cost of failure is everything, and the thing desired is wanted by nearly all, there is only one unforgivable course — and that is not to try.