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China’s President Talks About Zero-Sum Games (And Negotiation)

May 8, 2018

Recently, China President Xi Jinping gave a speech about China’s place in the world.

 

He talked about Zero-Sum Games and (implicitly) Positive-Sum Games.

 

CNBC reported:

 

"In his speech, the Chinese president sold a vision of China as a benevolent leader of the global economy, emphasizing that open systems are the best course of action for the world.

'We must refrain from seeking dominance and reject the zero-sum game, we must refrain from 'beggar thy neighbor' and reject power politics or hegemony while the strong bully the weak,' Xi said.

Instead, he said, countries should 'stay committed to openness, connectivity and mutual benefits, build an open global economy, and reinforce cooperation within the G-20, APEC and other multilateral frameworks. We should promote trade and investment liberalization and facilitation, support the multilateral trading system.'"

 

Xi says China is committed to Positive-Sum Games. China wants "openness, connectivity and mutual benefits,” the attributes of Positive-Sum Games.

 

Xi creates a contrast between Zero-Sum Games and Positive-Sum Games. He wants Positive-Sum Games to be played rather than Zero-Sum Games. He wants cooperation instead of conflict. Instead of war, trade.

 

Which is great.

 

Everyone agrees: Trade is better than war.

 

But war isn’t the only Zero-Sum Game.

 

Inside every Positive-Sum Game is another kind of Zero-Sum Game. It’s a game over who makes important decisions.

 

In A Spy’s Guide To Strategy, it’s called a “Boss Game.” It’s a game over who is in charge of the Positive-Sum Game. It’s a game over what happens when people inside the Positive-Sum Game disagree. It’s a game over who is boss.

 

The Boss Game is a kind of Zero-Sum Game within every Positive-Sum Game. Because if one person is the boss, that means someone else isn’t. It’s a win-lose game. A Zero-Sum Game.

 

But it’s a different kind of Zero-Sum Game. When you’re playing a Boss Game, you don’t play it like a Zero-Sum Game against an enemy. You hold back.

 

You want to win, but you don’t want the loser to walk away. You want the loser to stay in the Positive-Sum Game. To accept a subordinate role. To accept the decisions made by the boss. You want the loser to stick around. A Boss Game is a Zero-Sum Game inside a Positive-Sum Game. They’re played with the same people. Conflict and cooperation together.

 

It’s easy to create a contrast between Zero-Sum Games and Positive-Sum Games. It’s easy to say you want cooperation instead of conflict. To say you only want to play Positive-Sum Games.

 

But in reality, you can’t play only one type of game.

 

In reality, you play both Zero-Sum Games and Positive-Sum Games all the time. You can’t avoid them.

 

You want the Zero-Sum Game to not be a war, if you can avoid it. You want the Zero-Sum Game to be embedded in a Positive-Sum Game. But either way, you’re playing a Zero-Sum Game.

 

There’s another word for playing a Zero-Sum Game within a Positive-Sum Game: Negotiation.

 

When China’s Xi says he wants to avoid Zero-Sum Games, you can interpret that as wanting to avoid a war. Or you can interpret that as wanting to avoid a negotiation.

 

If someone is engaged in a Positive-Sum Game (like trade) with you and they want to avoid negotiating with you, there’s only one reason why: They like the current situation. They think negotiating the agreement will make it worse.

 

They like what they’re getting. They like the current rules.

 

In the case of China, Xi mentions that the current rules of the Positive-Sum Game of trade have been set by the G-20, APEC and other treaty-based organizations.

 

China likes how the Boss Game within the Positive-Sum Game of global trade worked out. When people like how the Boss Game worked out, chances are it's because they’re the boss.

 

Which is great. It's good for them.

 

But is it good for you? Could it be better?

 

If so, it’s time to negotiate.

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This is not to say that Boss Games can’t become wars. Boss Games can spiral out of control and break up the Positive-Sum Game that kept everyone in check. For more on that, see the section on the Arab Spring in A Spy’s Guide To Strategy.

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