Expert Perspective

　　

Confucius said in "The Analects", "If the name is not right, then the words will not go well; if the words are not good, things will not be done".

    The US-China trade dispute is a good example. If we want to understand what might happen in the future, we must correct two inappropriate words. First of all, this is not a trade war. The trade conflict is nothing but a small battle in a larger technological war. This technological war itself is part of a long-term struggle between the United States and China. The former, as a global hegemon, seeks to maintain its dominant position. This is a rising challenger who believes that he is morally entitled to restore his status as a major power.

    It is interesting to say that the outbreak of the trade war was caused by tensions between the United States and China. I think this description is incorrect. In the broader conflict or war of hegemony that began between the United States and China, the trade conflict is just a frontline or battle.

    We can indeed think of various fronts or battles, including trade, cyber, national defense/security (South China Sea), artificial intelligence/technology (5G). But this is a war between a declining global superpower (the United States, over-expanding in the Middle East) and a rising power (China).

    In a trade conflict, the market hopes that the two parties can reach a tariff or market access agreement to find a solution so that the market can continue to move forward. One can imagine the victory of the United States, that is, after the 90-day cooling-off period agreed by the Group of 20 (G20), the two sides reached some kind of deal, China made concessions on trade access issues, or made other efforts to rebalance trade with the United States relationship.

    But I think it is completely wrong to treat any such agreement as a final solution or bring peace. In fact, this may (and is likely) the first of many future trade conflicts. I am almost certain that this is only a frontier in the US-China war for hegemony, and we will see sporadic conflicts in various fields in the coming months and years, namely 5G, artificial intelligence, Taiwan, South China Sea, and the Belt and Road Initiative. Initiatives and competition between China and the International Monetary Fund (IMF) in lending.

    The key is that we must realize that the fundamental foundation of Sino-US relations has changed. Prior to Donald Trump's presidency, this relationship was inclusive and even symbiotic, at least from the perspective of the United States. The idea was to integrate China into the global economic and financial architecture. To help China develop, this will bring a win-win situation, and a stronger and richer China is good for everyone.

    The idea is that China can become "one of us" like the West.

    I think that after Trump (or during Trump's administration), the West will have a realization and even gradually reach a consensus that the inclusive approach of the previous administrations to China has actually failed. This approach may promote faster global growth through globalization, but it is very clear that China is the big winner.

    This relationship is not symbiotic, but parasitic or resistant: China is killing the United States’ global hegemony. So this practice must be stopped — or at least this is a growing consensus in the United States, and I think the same is true throughout the West.

    The conclusion is that although the two sides may reach a short-term agreement on trade, China and the United States will face long-term competition and even conflict in all of the above areas (and more). This could cause great damage to the global market.

    Going back to the G20, you must ask, what are the benefits of reaching a final agreement on trade between the United States and China? Of course, this will only return the US-China relationship to the inclusive/symbiotic relationship of the past, which is a failure from the US strategic point of view.

    It seems more likely that this time the Trump administration will fully accept China’s proposal-but any transaction is temporary. The US strategy may be to make China uncertain and make the relationship between the two countries in trade and other aspects. In a tense situation.

    By making China and the market uncertain about the state of their relationship, the Trump administration is likely to create a crisis of confidence in China-for both local and foreign investors in China. This will be the best defense against China's one-way growth trend over the past few decades. Perhaps we have seen this in the unofficial information from China.

    It is interesting to recall the more than 40-year Cold War between the two superpowers, the United States and the Soviet Union. For most of this period, the two sides knew each other’s red lines, but only after testing, such as the Berlin Airlift, the Cuban Missile Crisis, the Soviet intervention in Hungary in 1956, and the Prague Spring in 1968.

    These were high tension events at the time, but through these events, the two sides learned about each other's red lines. So a certain balance was reached in the 1980s, which provided a certain degree of stability. It wasn't until Margaret Thatcher and Reagan started the arms race that this situation was broken. The arms race encouraged Moscow to intervene in Afghanistan, causing the Soviet Union to over-expand its military, exposing its economic weakness, and the rest (Gorbachev, Yeltsin, etc.) became history. The United States was able to declare victory over the Soviet Union.

    This shows that in the new cold war between the United States and China, as the two sides test each other's red lines, we will experience various micro crises. We may also see proxy wars between the two camps, which may provide more tipping points. In the end, the winner is unknown.