US-China trade war threatens world economy
The US and China are considered the world’s two top economies, and thus they shoulder special responsibility in establishing global prosperity, stability and peace. America’s relations with China have witnessed ups and downs throughout its history. Since Richard Nixon’s historic China trip in 1972, the two states’ relationship has oscillated between engagement and containment. However, there has been a deep economic interdependence between them.
Recent trade friction between these two countries has overshadowed their relations, which could be seriously detrimental to the world economy, and some analysts consider the current trade-war escalation as the signal of a new “cold war.” However, current Sino-US relations are completely different from US-Soviet relations during the Cold War. China will not repeat the mistakes of the Soviet Union, which is why it has included “open to the world” policies and inclusiveness in its foreign policy.
Today the US and China have lots of interwoven interests in the fields of economy and politics. Pursuing aggressive policies would be futile and prevent both sides from acting in the spirit of openness, and establishing amicable diplomatic ties.
According to the recent White Paper released by China regarding trade and economic frictions with the US, bilateral trade between the two states reached US$583.7 billion in 2017. China is also considered the “fastest-growing export market in the US; it is also the largest source of imports.” Between 2007 and 2017, the total trade volume between China and the US increased significantly, from $24.94 billion to $75.05 billion. Further, China held $1.18 trillion in US Treasury bonds as of May this year. Therefore, the two countries are heavily reliant on each other.
Chinese authorities oppose the trade war waged by US President Donald Trump, since they are cognizant of the fact that there will be no winner, and it could make a dent in the global economy.
On September 19, Premier Li Keqiang at the World Economic Forum in Tianjin highlighted China’s support for globalization and international norms and precepts, and condemned unilateralism. He emphasized China’s compliance with “basic principles of multilateralism and free trade.”
China aspires to have a role in the development of the world and the growth of the global economy. Typical examples can be found in President Xi Jinping’s Belt and Road Initiative and the Asian Infrastructure Investment Bank (AIIB), which underline China’s policies of connectivity and global development.
Mutual respect, cooperation, shared destiny, inclusiveness and multilateralism have reverberated through the speeches of Chinese leaders in international forums.
However, Trump is reluctant to reciprocate China’s goodwill, and repeatedly accuses China of meddling in US domestic affairs and the economy, taking it a step further to disdain international organizations and treaties. His persistence in poisoning the atmosphere of negotiation with China could jeopardize the normalization of Sino-US relations and even lead to the collapse of their cooperation.
The US and China could defuse their trade conflicts by resorting to international organizations such as the World Trade Organization and seeking the opinion of their allies with respect to their concerns. A true friendship cannot be achieved unless both sides seek to manage their differences and identify the potential areas of cooperation.
A trade war cannot help the entrenchment of trust and constructive cooperation in US-China relations. The trajectory of their relationship will very much depend on the stability of the global economy, so it is crucial for both countries to mitigate strategic rivalry and expand mutual respect.
Gone are the days of unilateralism, and those states pursuing such tendencies are doomed to be isolated in a globalized economy.